Paying too much for pizza and paying too much for healthcare

Over the weekend I picked up 2 pizzas my family ordered from a local pizza shop. We ordered a pepperoni pizza and a cheese pizza. I paid for the pizza’s and brought them home. When I looked at the receipt I noticed that each pizza had a base charge of $9.75 and then there was a 1 item charge of $1.75 for each pizza. I understand the additional 1 item charge for the pepperoni pizza, but I do not understand the charge for the cheese pizza. After all, the pepperoni pizza had cheese as well.  To me, this is unbundling of charges, similar to what can happen with medical bills.

Unbundling is defined as the practice of expanding into individual units a group of diagnostic or procedural test codes. For example, the CPT code for an upper gastrointestinal endoscopy with biopsy of stomach is 43239. Separating the service into two component parts, using CPT code 43235 for upper gastrointestinal endoscopy and CPT code 43600 for biopsy of stomach, is inappropriate. CPT codes (Current Procedural Terminology) are how a medical facility bills a health insurance company. It is a complex system and is difficult to understand, and easy to make an error.

Today more people who have insurance have a high deductible plan, which means you pay more before your insurance ‘kicks in’. It is relatively easy for an insurance company to miss an unbundling issue, especially since they are not paying anything on the claim, what incentive do they have to really investigate? Those without health insurance have nobody to look at a bill for them. It is possible, just like I did for my cheese pizza, to pay more than you really should for your healthcare.

Medical bills and the uninsured

A new report has come out and states that a record number of people have gone without health insurance for at least part of the past year. The report indicates almost 50 million were without insurance, up from 46 million in 2008.

I think there is plenty of room for debate about this actual number, but I don’t think there is much argument that the number has increased in recent years. Over 62% of people with health insurance receive benefits through their employer. If people are losing their job due to the economic times we live in, it just stands to reason there are fewer with health insurance.

Not having health insurance guarantees you of one thing, that you will pay the most when you need health care. Only the uninsured pay ‘sticker price’ on a medical bill. That is because most medical providers have agreements in place with insurance, both private and government sponsored, to make adjustments to the amount they actually collect.  Without the benefit of an agreement, the uninsured is out of luck.

What can the uninsured do when they receive a bill? First, don’t ignore the bill. Talk to the hospital or doctor billing office and ask to set up a payment plan. You should also inquire if they offer a prompt pay discount.

Since most medical bills are generated for the insurance company to pay, they have confusing alpha numeric codes. Without a ‘key’ to unlock what these codes mean, it is difficult to understand what you are being billed for when you receive a bill. Those without insurance have no means to the ‘key’. Patient advocates like INSNET can help. We provide risk free medical bill review and negotiation. A fee is charged based on a percentage of the amount saved on the negotiation. If there is no savings on the negotiation, there is no fee for the review.

Is health care rationing closer than we think?

United Healthcare recently announced that it is joining Wellpoint and Aetna in launching new initiatives to reduce payments made on behalf of cancer patients. While the cost of cancer care is staggering, many see these new measures as rationing of care at the end stages of life.

Under the new plan, United Healthcare will make a one time payment for each patients complete course of treatment of common cancers, such as those affecting lungs, breasts and colon. The purpose of this is to encourage physicians to follow standard treatment regimens instead of trying individualized or unproven tactics, which they say can often involve costly drug combinations.

Under this plan, physicians can choose to administer drugs not included in the treatment regimen they choose, but they will only be reimbursed the actual cost of the medications. This line of thinking leads me to believe that the cost of medications are the major contributor to the cost of cancer care. Rather than have a perceived rationing of care, wouldn’t the insurance companies be better off curbing the amount they allowed on all medications, to an amount closer to actual cost? If insurance companies are contemplating a system close to rationing of care for cancer patients, can a form of rationing for all be far behind?

 

Those enrolled in CDHP’s spend less on medical services

Cigna has released it Fifth annual CIGNA Choice Fund study, which reveals some interesting numbers about their customers enrolled in CDHP’s. The study shows that CDHP customers spend less on medical services and receive equal or better care than those enrolled in a traditional PPO plan. Those enrolled in a CDHP are also more apt to take an active role in their health and are more satisfied with their health care service.

A common misconception of CDHP’s is the reason that costs are lower is because people are not receiving necessary care out of fear of the high cost involved. The CIGNA study points out that this is not accurate. When comparing those enrolled in their CDHP plan versus those enrolled in a traditional PPO plan, 9% enrolled in the CDHP plan had higher use of preventative care services, 87% receive no statistical difference in the level of care and only 4% receive a smaller amount.

When grading their overall satisfaction with their health plan,  83% of respondents were satisfied or very satisfied with their CDHP compared to 82% for all of CIGNA’s other health plans.

Can healthcare learn anything from cable tv?

I subscribe to Time Warner Cable for my television. Time Warner and Walt Disney Co., which owns ESPN and ABC are currently involved in some heated negotiations. Both sides have no issue explaining their side to the consumer.

Time Warner has a “roll over or get tough” campaign. The campaign claims that the networks are demanding enormous increases in fees  to retransmit their product. These fees are mostly passed on to the consumer, but the cable company must realize the difficulty this may pose. Walt Disney Co. also has a campaign where they are informing Time Warner customers of other options to view their product, which include competitors as well as satellite television services.

I came across this article about an uninsured women from Boston arguing about a charge on her medical bill. The woman saw a doctor in an office in a Boston area hospital. Before scheduling the appointment, the woman contacted the hospital and was told a routine consultation with no test or procedures will cost between $200 and $300. When the bill for $233 for the doctor visit came, the woman paid the bill and thought everything was taken care of.

However, she received a second bill for $133 which was the hospital charge for the use of the office space. The article continues by saying that virtually every Boston area hospital charges a separate facility fee, but most patients are not aware of it because their insurance usually takes care of it, without most patients even knowing there is a charge. As this woman has no insurance, she became aware of it quickly.

What would happen if health insurance plans instead of just taking care of these small fees, actually let the patients know that the reason their health insurance premiums escalate each year is because they have to pay fees like this? I’m not sure it would change health care as we know it today, but it would make it more transparent.

Study reveals HSA and FSA users access medical care more often

Opponents of high deductible health plans and HSA’s usually point out that a reason that medical costs decrease is because people do not seek adequate care due to the perceived higher out of pocket costs. This study by the National Center for Health Statistics seems to indicate just the opposite.

The study indicates there is a strong correlation between the type of health plan an individual purchases and their utilization of the plan. Those covered with a HSA and FSA were more likely to get an influenza vaccination(36%) than those without (27%).

The trend continues when it comes to visits to the eye doctor, 52% for those with HSA & FSA compared to 36% with traditional insurance.  The percentage (34%) covered with a HSA and FSA saw a medical specialist, compared to 24% with traditional insurance.

Most will agree that when an individual has a high deductible health plan and a health savings account that they become better consumers of health care, as they are consistently looking for the best way to spend their HSA dollars.

Little League baseball and CDHP’s; it is all about efficiency.

My son plays on our towns 9-10 year old Little League All Star baseball team. They won their district, then they won the State tournament, now they are representing Maine in the first ever Regional tournament for this age group in Rhode Island. As a parent, this is my first experience in All Star tournaments, and I have learned quite a lesson about the need for efficiency, especially for your pitchers.

In order to protect the pitchers young arms from overuse, there is a schedule of the number of pitches thrown and when the pitcher can pitch again. If they throw under 20, they can pitch the next day, 21-35 they need a day’s rest, 36-50, 2 days rest as so on.

A manager has to be especially aware of his pitchers pitch count and how the game is going because at some point they are going to have to make the decision to keep the pitcher in the game and risk not having him available for the next game, or take him out so he can pitch sooner.

With more and more people being insured with high deductible health plans, you need that same efficiency in how to spend your health care dollars. Many now have deductibles of $5,000 or more meaning that they are responsible for paying that amount each year before their insurance pays anything.

The lack of transparency in health care pricing today makes it difficult to be efficient. Also, medical bills can be confusing and difficult to understand. Furthermore, studies show that 8 in 10 medical bills contain errors. Just like the Little League team needs an effective manager, sometimes individuals need a health care expert or advocate who can help them.

I usually save the last paragraph of blog entries for a plug for INSNET services, but i’m going to end this one with a note about my efficient son who pitched his teams last game. He came in as a reliever and ended up finishing the last 4 2/3 innings of the game and threw only 42 pitches, meaning he only needs to rest 2 days before helping his team again. Yes I am a little proud!

Have a hospital bill to pay out of your HSA? We can help you save money.

JP Morgan Health Savings Account released a study of the saving, spending and investing habits of it 500,000 HSA accountholders. The study showed in increase in the number of account that have balances over $1,000 and $2,000.

The study also states that the average spent or distributed per HSA in 2009 was $1,305, or about $109 per month. Purchases made at a drugstore accounted for the highest volume of transactions. Not surprisingly, hospital expenses had the highest average dollar amount per transaction at $212.

INSNET offers risk free medical bill review and negotiation services on any medical bill with a patient balance over $200.  That means if you have a hospital bill and plan on paying it with funds from an HSA, we can save you money and keep more of your money in your HSA.

Average family of four paid $1,303 more healthcare in 2009

The Milliman Medical Index for 2009 was recently published and inside are some scary figures for those who are struggling to make financial ends meet. Medical costs for a family of four enrolled in a PPO healthplan was $18,074 for 2009. According to the study,the average family of four spends over $3,000 in out of pocket health care expenses.

Employer’s who sponsor the PPO plans pay the bulk of this expense, picking up 59%. The remaining 41% is the patient’s responsibility, with 24% coming in the form of payroll deduction for the monthly premiums and 17% from out of pocket expenses at or near the time a medical service is needed. Since 2007 the employee portion has increased while the employer portion has decreased.

This study was based on those enrolled in a PPO healthplan and does not count the 23 million people who enrolled in high deductible health plans in 2009. By definition, these individuals would have higher out of pocket expenses due to higher deductibles.

Medical bills are difficult to understand and almost impossible to decipher for accuracy or fairness. Most bills are filled with alpha numeric codes which are geared for insurance companies to understand. When a patient receives their bill they assume the insurance company did their best to reduce it for them, but what incentive do they have if they are not paying the bill?

Patient Advocates like INSNET help individuals reduce what they pay on their medical bills. Using data collected over 20 years we know what a fair price to pay is on your care and we know the lowest your facility will accept. INSNET was formed by the founders of Insurance Negotiating Service which has helped insurance companies save money on medical bills since 1985. We know the language used on the bills and have the track record to save money.

We all pay for hospital billing errors

I recently saw this CNN video which shows several overcharges and billing errors. The overcharges include $1,000 for a toothbrush and $53 for a pair of disposable gloves. The story also shows a billing error where  a patient received 1 bag of saline and was billed for 41 bags.

The most disturbing part of the story to me was that the bill with the 41 bags of saline was paid by the insurance company. The 41 bags of saline were billed at $4,182, which was a $4,080 billing error. While it is bad enough that the insurance paid this, but who else pays?

If the patient receives their health insurance from their employer, chances are the monthly premiums for all employees of this employer will go up because the expenses go up. The patient may pay more, especially if his deductible had not yet been met.

Most people believe if they have insurance, the insurance company will review the bills for errors. The fact is, due to the massive amount of claims an insurance company must process a day, a trained professional rarely reviews a bill under $50,000. So this bill not doubt was processed according to the contracted rate by a computer program and was paid, except we all pay for the error.

If an error can be missed by the insurance company when they are paying the bill, it can certainly be missed when the majority of the bill is the patient responsibility. Trained Patient Advocates are available to assist individuals with bill review and negotiation services. INSNET, LLC provides this service risk free, they keep a percentage of the amount saved on a bill, with no fee if there is no savings.