How do these numbers add up to savings?

I recently came across this story that says that hospitals have agreed to give up $155 billion in future Medicare and Medicaid payments to help defray the costs of President Obamas healthcare plan. This piece of news was seen as the bright spot in the White House effort to reform healthcare. Digging deeper into the story I’m amazed how this can be seen as positive news for people interested in reducing healthcare costs.

About $50 billion of this projected $155 billion “savings” is expected to come from a reduction in payments made to hospitals that provide care to uninsured and low income patients. The effected hospitals say this will put a strain on these local communities. These reductions come from payments currently made by Medicare and Medicaid (Government).

The story goes on to detail that in exchange for giving up $155 billion in future payments, the hospitals have negotiated a deal should the Finance Committees’ (Government) legislation include a public health insurance plan. Under this agreement, the hospitals would receive reimbursement amounts in excess of what Medicare and Medicaid currently pay.

So hospitals have agreed  give up a lesser amount from Medicare and Medicaid (Government) in exchange for higher reimbursements under potential Finance Committee’s legislation(Government). How does this end up saving any money on healthcare expenses. Where does the average citizen realize any savings in this plan?

US Open Golf and medical bills?

The second major tournament in golf in this week, the United States Open. I don’t play as much golf as I used to thanks to the responsiblities of parenthood, but I always look forward to this tournament and its last day which takes place on Father’s Day.

The responsibilities of providing for my children and how I go about it prompted the following comparison between golf and patient advocacy. The object in most weekend players game and the US Open is to break par on the course. Similarly, as a Patient Advocate, I try to help my customers break ‘par’ by reducing the amount they must pay compared to billed charges on their medical bills.

In the game of golf, one of the best ways to succeed is to have the proper tools, whether it be properly fitted clubs or a high distance golf ball. On a professional level, a caddy you can trust and a dedicated swing coach are essential. Patient Advocate’s help individual through the maze of health care statements from medical providers and insurance companies. INSNET has the experience through over 20 years of negotiating medical bills to know a fair price to pay on a medical bill.

The golf courses at most US Open sites have penalizing rough with high grass just outside of the fairways. Have you tried to contact a medical provider and speak to someone about reducing your medical bill?  If so, then you know it is possible to spend the better part of an hour doing so if you do not know the right department to ask for or the correct words to say to speak to the person who actually has authority to reduce your bill. At INSNET our service is not rough at all, as a matter of fact it is easy and painless; if we don’t save you money on your medical bill you pay us nothing!

I hope all father’s have an enjoyable day this Sunday, and reflect on how they provide for their families. I also hope every father gets a chance to step onto a golf course with if not your own father, then your children.

Health Savings Accounts and Health Reform

A recent study by OptumHealth concludes that 78% of HSA accountholders believe that HSA’s should be a part of any health care reform that may take place. The study states that 30% would have no health insurance if it were not for their health savings account.

This study may take some of the political sting out of the debate about HSA’s. Democrats contend that HSA’s are just a way for the rich to store and keep more of their money from Washington. The study shows that 70% of the respondents earn less than $75,000 per year.

America’s Health Insurance Plan recently reported that 8 million Americans are now insured through a health savings account. This figure is up from 6.1 million in 2008. The AHIP study reports that almost half of the accountholders have a median income of $50,000 per year.

A typical American household of four enrolled in a ppo plan spends $2,820 per year in out of pocket medical expenses according to the Milliman Medical Index. Many studies show the premiums for a high deductible health plan which must accompany a health savings account have much lower premium costs than ppo plans. With a HSA you can choose the deductible you want, or the premium you can afford.

Many are  concerned that with a high deductible plan you will pay more in out of pocket expenses. That’s where professional medical bill negotiators like INSNET help individuals. They provide risk free medical bill review and negotiation. They charge a percentage of the amount saved on your medical bill, with no fee if there is no savings.

There are certainly many facets involved in healthcare reform, but empowering individuals to attempt to control their own costs certainly makes sense to me.

Back in the saddle again

It sure has been a hectic past couple of weeks. Preparing taxes, kids on school vacation and securing additional negotiators has left precious little time for this blog. It then struck me that if I’m struggling with squeezing more items in my day than so must others.

Which got me thinking obviously about our negotiating service. I believe that anyone can negotiate their medical bills, just like anyone can negotiate what they pay for hotel rooms, airfare and new automobiles. The major stumbling block is most individuals do not know what a fair price is to offer their provider or what is fair to accept as a discount.

The founders of INSNET have been negotiating medical bills for over 20 years. We have the experience to not only know what a fair price to pay for services is, but also what dollar amount your provider has accepted from insurance in the past. With this information we base a settlement proposal and ensure you pay a fair price for your medical care.

I was recently reminded of an article our president Jack Gillis wrote for the Self Insurer years ago. The article references a Case Management Nurse who was looking for pricing information for a lymphadema pump. The homecare medical dealer was billing the insurance company $5,200.00. The Case Management Nurse  negotiated the price down to $2,300.00. Now most would say that the savings was fantastic. However, before she contacted the provider we informed her that the manufacturer had a suggested list price (not dealer cost) of $1,600.00 . In this case, the fanatastic negotiated settlement was a least a $700 overpayment. If a medical provider is able to negotiate a deal that great for themselves with a trained medical professional, just what kind of chance does the average citizen have?

How much time do you have to contact your medical provider with questions on your medical bill. The time you spend on hold can be an eternity. In fact I finally used my time well and wrote this post during my 14 minutes and 34 seconds I was on hold with a provider.

I feel your pain

I recently had an encounter with my daughters pediatrician office which showed a brief glimpse into the frustration many feel about our system of healthcare

About a year and a half ago my twelve year old daughter had her annual physical examination. My daughter’s pediatrician is a male and the office has a Physicians Assistant who is female. For several years my daughters have seen the PA for the exams, which is fine with my wife and I because the girls are more comfortable having a female examine them. During the physical the PA noticed something unusual about the curvature of my daughters spine. Her examination noted that the curve was a bit more pronounced then they would like to see at a child this age, she was concerned, but not overly so and figured it was something my daughter may grow out of. To be safe, she ordered x-rays at another facility and asked us to come back every 6 months for checkups.

In January I took my daughter to this checkup. The PA came into the room and we small talked for a minute or so and then she asked my daughter to stand up and bend forward at the waist so she could exam her. The PA used an instrument about the size of a ruler that had the middle hollowed out and ran it up and down my daughters spine. She did this twice and then showed me as well. This instrument is kind of like a level and apparently my daughters spine is now within the acceptable range of curvature, for which I am thankful. We were in the exam room less than 5 minutes, including the time small talking.

We left the office and a few weeks later I received a bill from the pediatrician. I have a high deductible plan, so I knew going in that I would be responsible for all costs involved in this exam. What shocked me was the statement from the pediatrician said that the exam was done by the attending pediatrician, not the PA. Common sense told me that a pediatrician should receive a higher reimbursement than a PA.  The statement also included CPT code 99212 and I was charged $77.00. Thankfully I know what the code means and it was the appropriate code, and the price for my geographic area was at about the 70th percentile, another words a fair price. My problem was with who gave the examination.

I contacted the billing company about this. The first person could not answer my question and offered to check with their supervisor and call me back. A few days later they called back and said they bill according to how my insurance company requires, which is to bill in the name of the attending pediatrician, even if he does not perform the exam. Furthermore, the biller stated that the code does not differentiate between the exam being done by a pediatrician or a PA. I was not satisified with this answer and asked to speak to the supervisor. Later that day they called and still did not give me an answer that satisfied me.

The pediatrician’s office is in network, which means the pediatrician agrees to write off a portion of the bill in exchange for increased volume from others who participate in this network. The statement I got from the pediatrician stated the billed charge was $77.00, which is fair, and the write off was $40.00, leaving me a balance of $37.00. I consider this a fair rate of reimbursement and have no problem paying this.

Our healthcare system is far from perfect and everyone needs to be alert about their bills. If you need assistance with a bill review or negotiation, contact INSNET.

We need to reform our attitudes before we can reform healthcare

Deloitte recently published a 2009 Survey of Health Care Consumers. Some of the findings are not surprising; 40% would grade the current healthcare system with a D or a F, a significant number of consumers have skipped care because they could not afford it, were not covered or thought the costs were too high and 53% believe employers should be required to provide health insurance for their employees.

The study also states that 7 in 10 say the would participate in a wellness program if they were given financial incentives such as reduced insurance premiums or monetary rewards. What is wrong with the 30% who would decline this offer? Everyone agrees the cost of health insurance is skyrocketing and needs to be controlled. The best way to lower the insurance premiums is to lower the bills the insurance must pay. Isn’t it easy to see if you are healthy, you will have less medical bills?  Participation in a wellness program will promote a healthy lifestyle and reduce healthcare costs. It just amazes me that 3 of 10 people surveyed have no interest in bettering their health, even if it puts money in their pocket. In this economy couldn’t we all use a little more in our wallet?

Common errors in medical bills

No matter how technologically advanced medicine becomes, billing remains mostly a data entry job done by human beings, who as we all know are prone to make mistakes.  Most of the errors found in medical bills are a variety of a data entry mistake.   All medical bills are generated based on a complex system of codes. Each medical provider has in their computer system a billable amount per each code. Below are some examples of medical bill errors.

A routine visit to your physician, a visit which includes about 10 minutes of face time with your doctor is usually given a 99212. For this code your doctor may have a charge of $95.00. Code 99215 includes around 40 minute visit and the charge could be around $300.00. The only difference in the code is the last digit, with the 5 being just above the 2 on a keypad. A small error by a billing clerk could result in an overcharge of over $200.00.

If a patient is receiving medication, the drug is dispersed in number of units. A billing clerk could accidentally key in 20 units instead of the 2 units the patient actually received. The use of surgical and  recovery rooms in hospitals are billed out on a flat rate for a given amount of time, usually 30 minutes. If you exceed this amount of time in the room there is a separate code for additional minutes. In a previous post I referenced the extreme time a hospital was billing for the use of a recovery room, which was later found to be a clerical error.

Another common error is for supplies or services which a patient never used. We once reviewed  a bill for a patient which had 2 pacemakers. The patient thankfully only received one pacemaker, but the hospital must keep a second one in the operating room in case of malfunction. A hospital employee failed to inform the billing clerk that the unused pacemaker was put back into inventory, and the clerk subsequently added it to the patient’s bill.

Some years back we reviewed a pharmacy supply bill for an insurance company. The pharmacy was billing out $7,412 for supplies. The problem was the supply charge should have been $412.00, not $7,412.00, a simple keystroke error that could have cost the payer dearly had it not been caught.

I just recently heard of this error where a patient was billed for the birth of a baby that wasn’t hers.

Now we get into the area where I tread very lightly, however it is a major problem; fraud. Estimates say that over $60 billion is paid annually in fraudulent healthcare bills. Most of the medical providers I’ve dealt with throughout the years are honest individuals, but obviously there are some out there looking to make a quick dollar.  I like to see the better side of individuals, however in the pharmacy example above, when we questioned the company about the error they stated that the 7 should have been the $ sign. Last time I checked, the $ sign is above the 4 not the 7….

Another issue especially with hospital bills is unbundling.  This should really be its own entry, but in summary it is the practice of billing for items which should be included within a code. For example if a hospital charges for suture removal following a surgery, and the removal of the sutures are included in the global fee for the surgery than the hospital is billing twice.

As stated before, it is very important that you review your bill for accuracy, even if you have insurance. In the example of the doctor visit, your insurance doesn’t know how long your visit was, they only know a contracted amount to pay per code on a bill. If you need professional assistance, contact www.myinsnet.com.

Information is just the begining

The recent episode of the tv show 24 showed Jack Bauer discussing strategy with his one time boss, Bill Buchanan. Jack wanted Bill to interrogate a known terrorist planner. Before Bill would even discuss the matter he wanted to know “how good the intel was”, or how reliable was the information. Even though Jack reassured Bill the information was accurate, Bill decided it was not his personality or in his capabilites to do this task.

Many individuals who now have high deductible health plans are in the same position, they have access to good information, but lack the necessary skills to negotiate better prices for the healthcare.

Resources such as Healthcare Blue Book and Change Healthcare provide individuals with pricing information for medical procedures. Their information comes from what insurance company ppo contracts have reimbursed providers for these procedures. This information is valuable in assisting individuals to determine if they are being billed a fair price for their healthcare. In other words their ‘intel’ is good.

Many individuals become like Bill Buchanan (by the way I love the Bill character on the show) and realize they don’t have the courage to take the next step, which is to contact their medical provider and ask for a discount. Many also do have the courage, but lack the time to wait for an answer or response from the patient accounts department.

Thankfully individuals have medical bill negotiators like INSNET,LLC who  provide risk free bill review and negotiation of medical bills. INSNET was formed by Insurance Negotiating Service which has over 20 years experience negotiating medical claims for insurance companies. INSNET uses the ‘intel’ gathered from previous negotiations to determine a fair price for your medical bills.

There are many Jack Bauer type personalities who can and will negotiate their own medical bills and be very successful. If you are a Bill Buchanan type and wish to have professionals review and negotiate your medical bills, INSNET is here to help.

Would medical providers benefit from thinking outside the box?

I just read where Norman Regional Health Care system is expected to lay off approximately 200 of its employees this week.  Given the current economy any news of lay offs shouldn’t be a surprise.  What I found a bit interesting was some of the facts and figures in the story and believe similar occurences are happening at hospitals across the country.

CEO David Whitaker states that the system realized a decline “of about $15 million” in the “investment income earned on reserved funds”.  Like all businesses and individuals, we’ve all lost a lot of money with the stock marketing tumbling.  This is undoubtedly a tough break, but one for the most part out of the hospitals hands and is the responsibility of the financial planners.

Financial reports show that the Norman Regional Health Care system is currently holding about $16 million in bad debt while the system anticipated about $12 million in bad debt for its budget year.  Now we get to an area where tought innovative decisions can help the hospitals bottom line.  It is a fact, even before this economic crisis, that some people do not have the ability to pay for their healthcare, as evidence by the budgeted $12 million write off.  The tough choices come as a result of the additional $4 million.  CEO Whitaker explains part of the reason for the additional bad debt as follows, “due to the state of the economy, we are seeing longer delays in the turnaround of payments from third party payors and a large increase in the portion of our patient accounts that need to be written off to bad debt as uncollectible”.

It is my belief that due to larger deductibles, individuals are responsible for paying more for their healthcare.  As a patient advocate I’m always amazed when a hospital declines to negotiate a patient balance.  For example I recently reviewed a hospital bill (not from Norman Regional)which was approximately $4,000.  The hospital was in my clients’ health insurance ppo network, which provided a discount of $800 (20% of billed charges), leaving the patient responsible for $3,200, of which he has funds to pay for in his health savings account.  This is the first bill of the calendar year for my client and they have a $5,000 deductible.  Based on my review of the bill, the hospital was billing in excess of the 90 percentile of what other hospitals charge in this geographic area for similar procedures.  I offered the hospital terms in which the patient would pay with their hsa debit card, $2,200 as full payment.  They stated that it is not their policy to negotiate with patients, but were willing to set up a  payment plan where the patient could pay 20% up front and spread payments over a year.  How much will it cost the hospital to have this payment plan set up, including time and resources to mail out statements, collect payments, and balance books?  Would it make more financial sense to accept a lesser amount up front and use those funds now, instead of waiting?  In a small way I cannot help but think decisions like this will help hospitals across the country improve their bottom line.

The Uninsured and Health Savings Accounts

The Congressional Budget Office recently announced that there are currently 45 million Americans without health insurance. They state that without changes to federal policy that the number will be 54 million by 2019. The actual number is up for debate, I know a number of people who elect not to pay the premiums for health insurance, and spend that money elsewhere, even though they have the means to pay.  Whatever the number is, there are a significant amount of people who cannot afford premiums for health insurance.

Many employers now offer high deductible health plans. These plans are unlike many HMO plans where a patient pays small co-pay amounts for doctor visits, hospitalizations and prescription drugs. With high deductible health plans, the patient is responsible for paying medical expenses from dollar 1. The cost savings for the employer and employee for this type of coverage is significant, and could save as much as 30%. If the employer has set up a Health Savings Account they can fund the savings realized from the lower premiums into the accounts for their employees to use.

Here’s an example: A small business with 50 full time employees offers an HMO health plan. The annual premium cost is $325,000, of which the employer pays 75% or $243,750, the employee pays the balance, which is taken out through payroll deductions. Under the HMO plan the patients pay:

$15 doctor office visit co-pay

$250 out patient hospital co-pay

$500 in patient hospital co-pay

$15/$25 prescription drug co-pay

To attempt to lower costs, the employer changes to a high deductible health plan and HSA for its employees. With the patient responsibility starting a dollar 1, the premiums are less expensive. The same 50 full time employees can be insured with a high deductible health plan for $235,000. This savings is in excess of 25%. The employer can use the premium savings and fund $1,500 into each employee’s HSA. Health insurance will pay for any expenses once the deductible has been met. Now that employees are paying for healthcare from funds in their own account, they are more likely to shop for a better price, making them better healthcare consumers.

Smart employers will supply their employees with tools to ensure they make smart decisions for themselves. Access to wellness programs, prescription drug discount programs, discount lab and screening centers and medical  bill negotiators all help patients reduce what they pay on their medical bills.

Finding health insurance for those who really are in need is a challenge. For those who simple choose to put their money elsewhere, high deductible health plans provide an opportunity for those to have some peace of mind that catastrophic medical bills will be paid for.