A glimpse into what government run healthcare will look like

The town I live in is running a program offering to vaccinate school aged children for the flu as well as H1N1. I’ve lived in this town over 17 years and am not sure why it is being done this year.

A letter came home from all the schools in September announcing this program, with the shots to be administered by a third party agency in the first week of October. The notice mentioned that this will just be the seasonal flu vaccine, and will not protect against H1N1. Shortly afterwards, we got another notice stating that due to a shortage, the schedule vaccinations will take place November 9 – 14.  Another notice came out stating that there will indeed be a H1N1 vaccine, but the seasonal flu vaccine will not be available. Furthermore, the H1N1 vaccine would not be a shot, but instead a nasal spray (much to the delight of my younger children. Finally, the first day of vaccinations and low and behold, the seasonal flu vaccine is available along with the H1N1, in both shot and nasal spray form.  Not only did they get the wrong information out to the families, but they had 3 chances to it correctly and still didn’t get it right. Do we want all of our healthcare run like this?

Due to the size of our town, the vaccines are to be administered based on your last name (A-F the first day, G-M the second etc.) Sound like rationing to anyone?

Additionally, the vaccines are to be administered between 2:00 and 7:00 at the high school. My daughter who attends the high school went to register for the vaccines immediately after school ended at 1:45. She got in line behind others, who were already in a line extending outside of the school. I know people who waited in excess of 2 hours for their children to be  vaccinated yesterday.

Furthermore, there is no fee to be paid at the time the vaccine is administered. It appears to be a free program, which many will indeed believe does not cost them anything. How much are taxes going to go up to run this program this year and into the future?

Our healthcare system is indeed in need of change, but I believe that the government should stay out of it.

Haggling with your Doctor

Forbes Magazine ran an article recently titled Cut your Doctor Bill. The article explains that with the rising cost of healthcare that people need to find out the costs associated with a medical procedure before they have it done. The problem is actually finding the cost beforehand.

If you are seen at a doctor or hospital and don’t know beforehand what the approximate cost will be, you are in for sticker shock once you receive your bill, especially if the medical provider is not part of your insurance network, or if you don’t have any insurance.

INSNET,LLC President Jack Gillis was interviewed for this story and shares some tips for those who feel confident enough to do their own negotiations. First he says you need to determine if the facility is authorized to give you a discount. If they are, your next question should be, who is authorized to give me a bigger discount? Not all medical providers are willing to reduce their fees, but with unpaid debt at record levels, many any re-thinking those policies.

If you would rather have a professional organization who has been negotiating medical bills with providers for over 20 years review and negotiate your medical bill, INSNET is available at www.myinsnet.com or by calling 877-MYINSNET (877-694-6763)

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?

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.

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.

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.

When a claim becomes a medical bill

On Sunday my family celebrated an anniversary that my oldest daughter and son would like to forget.  We were skating on a frozen pond and the kids started a game of hockey.  The kids are not great skaters and they did not have any other equipment other than hockey sticks and a puck. Shortly after the game started my son lifted the puck and hit my oldest daughter right on her helmetless forehead. I fortunately witnessed this accident and immediately went to my daughter’s aid. When I arrived blood was already gushing from her head.  I applied pressured and ice to the wound to stop the bleeding, which slowed but did not stop. We decided we needed to get her to the hospital.

My wife and I drove her to the emergency room where she was seen immediately by a triage nurse.  I was the lucky one left to start the paperwork process. Since I pay for health insurance, I presented my daughter’s health insurance card to the receptionist. My wife and daughter went to another exam room and were met by a doctor. The receptionist finished taking down and copying the insurance company information and showed me to the exam room.

The emergency room doctor’s examination led to a decision to suture the forehead with 4 stitches. The doctor did the stitching, prescribed some pain medication and told us the swelling should go down in a couple of days.  About 3 hours after we arrived at the hospital, we were all back home and my daughter was showing her siblings her wound. Thankfully the swelling did go down and the stitches were removed a few days later.  To this day my daughter has a barely recognizable scar, you would have to know where she got hit to see it.  The doctor and hospital did a wonderful job.  In an ideal world, all are happy and the case is closed.  However, the hospital is a business and needs to be paid for its services, which is why most people purchase health insurance, to offset unexpected medical costs.  Most do not understand the process involved in paying for the services.

Upon being discharged, the hospital sent a claim to my insurance company. About 15 days later, I received a letter from the hospital telling me that this claim had been sent to my insurance company for payment, and that the enclosed “is not a bill”. When my health insurance company receives a claim on behalf of an insured, there are many steps which must take place before payment is released. They must ensure that I or my dependents were covered at the time of the injury/illness, they must determine if there is coverage for my injury/illness under the terms of the policy, they must determine if my claim is from an in network or out of network provider, they must determine if I met my deductible and co-payment amounts. Once all of these steps have been completed, the process of paying the claim begins.

Assuming the deductible and co-payment have been met, the insurance company must pay the full amount. If the provider is in the network, the insurance company pays the claim based on the discounted rate. If the provider is out of network, they pay the amount billed, or attempt to lower the amount via negotiation. If the deductible or co-payment have not been met, the insurance pays only their portion of the claim. Either way, upon processing the claim, an Explanation of Benefits is sent to the insured.

The Explanation of Benefits details how the insurance company determined the amount they paid on the claim. If they did not pay the full amount, the medical provider can and will bill the patient for any patient responsibility (deductible and co-payment not yet met). This is when you get a second letter and billing invoice from the hospital telling you how much you owe. The claim has now become a medical bill.

When you receive this bill, you must compare it to the Explanation of Benefits for accuracy.  Upon receiving the hospital bill most people put the bill with their other bills to be paid, and pay it just like their electricity or cable television bill. These medical bills need to be reviewed closely to make sure there are no errors, and that you were not billed for services not rendered. Today, with deductibles averaging $1,000 and rising healthcare costs, individuals are responsible for paying more for their healthcare than ever before. Professional bill negotiators like INSNET, LLC are available for RISK FREE bill review and negotiation to help lower the amount you pay on medical bills.

What if your dinner check read like a medical bill

I’ve written before about comparing healthcare prices to hotel and automobile prices, imagine this scenario:

You are at a special dinner with your significant other.  The service and meal were terrific and you enjoyed a memorable evening. Once the waiter notices you are done eating, he brings you your check.  What would your reaction be if you read your check and saw this?

Appetizer          $6.00

Salad (2)           $8.00

Entree (2)         $24.00

Wine                 $20.00

Dessert (2)        $10.00

Silverware         $1.00

Busing dishes    $1.00

Total                 $70.00

After you look at the bill, you notice many surprises and errors and call the waiter over for clarification. You inform the waiter that you split one salad, you had a $7.00 glass of wine, you shared a dessert and you have never been charged for silverware or busing services at any other restaurant. You inform the waiter that based on your calculations your bill should be for $46.00, not $70.00.  The waiter excuses himself and goes to talk to the restaurant manager.  After a long, long wait of over 15 minutes the manager comes to your table and makes any of the following statements:

I’ve reviewed your check, it is correct, please pay $70.00 immediately.

I am authorized to discount your bill 25% and would be happy to accept $52.50, provided you pay and leave immediately

My waiter cannot remember you ordering only one salad and one dessert, so to be fair to you, I’ll’ only charge you for one salad, please pay $66.00 immediately

I see that you had wine with your dinner, my waiter keyed in a full bottle of wine in the computer which generates your check, therefore I must keep the charge for the bottle on your check

It is our policy to charge for the use of silverware and busing of dishes, it is written in fine, fine print at the entrance to the restaurant, you should have seen it when you entered

I am not authorized to reduce your bill at all. We are part of a chain which has all bookeeping done in a central location. If you wish to speak to bookeeping, please contact them tomorrow during regular business hours.  You may discuss a rebate with them, but in the meantime I must ask you to pay the full $70.00

If you’ve ever tried to speak to a hospital regarding a billing error, it is likely you’ve gotten a response similar to what this restaurant manager gave. With the codes used on most medical bills, it is very confusing to understand exactly what you are being charged for. Competition prevents restaurants from charging for items like silverware, glassware and table linens; all of which should be included in a restaurant experience. Many hospitals in fact ‘unbundle’ services which should be included in room and board rates. Trained professionals recognize when unbundling charges and errors occur on a medical bill. Visit www.myinsnet.com if you need a patient advocate to help you save money on your medical bills.

If you have a story about how another industry could bill like this please email me at ddobecki@myinsnet.com