…And 10 ways you can control your healthcare costs
Tales from the Mailbox is a blog by Health Cost Matters. We relate stories of billing mistakes and mischief, and what steps you can take to resolve them and prevent overpaying.
Stephan’s daughter rode her bicycle to work last summer and suffered a minor accident which resulted in a gash by her eyebrow. Later that afternoon Stephan took his daughter to a nearby hospital ER for stitches. The on-call plastic surgeon treated her. Thirty minutes later, the gash was repaired, his daughter returned home.
The surgeon billed: Emergency Department visit, moderate severity; debridement of the laceration; and complex repair of a wound (1 inch). For those services, the payer’s maximum reimbursement for a participating surgeon totaled $1,777.
While the hospital that Stephan took his daughter was participating in his plan’s network, Stephan was unaware that the plastic surgeon was not.
The Surgeon Was Paid What??
Soon after, Stephan received the claim from the surgeon: $47,500. Since the surgeon was non-participating, the Healthplan allowed 100% payment of his claim. Stephan's PPO plan required a 10% co-pay of allowed ER charges with a maximum out-of-pocket of $2,500, so Stephan paid ‘only' $2,500. The payer reimbursed the surgeon for the balance, $45,000.
Surely this must be a mistake, he thought, so he called the payer, a large nationwide Healthplan. Nope, the payer confirmed that payment of 100% for the surgeon’s billed charges totaling $47,500 was correct because he was non-participating. Case closed, no further action required.
Who Actually Paid This Claim?
The company where Stephan works is a self-funded group, meaning that his employer actually paid $45,000 for this claim. The Healthplan (the third-party administrator who manages claims reimbursements for this group) paid $0.
In reality, the $45,000 payment for this minor, 30-minute procedure was split among Stephan and all his co-workers, whether or not they participate in the group’s health plan. This is $45,000 that cannot go toward his non-profit company’s mission, and it’s $45,000 less his employer has to increase wages, hire new employees, provide additional benefits. You can imagine how quickly this type of healthcare-related waste and abuse adds up.
Stephan was appalled and called the plastic surgeon’s office to discuss. The surgeon apologized for the “hugely inflated bill,” a mistake he admitted, and then blamed his billing/coding staff. He promised to promptly refund the money paid and reissue a claim at the appropriate level.
Six weeks later (and counting), the doctor has yet to reimburse $47,500 to Stephan and all of his co-workers who have so generously chipped in to pay this astonishing sum for his daughter’s 30-minute eyebrow repair.
When your Healthplan pays too much for a claim that includes exorbitant, over-billed charges or even services that were never actually provided, you pay, we all pay. As a claims auditor for 30 years, I can tell you that a $45,000 overpayment on a single claim is more common than you care to know. What’s even more scandalous is how few overcharges and overpayments are actually identified, let alone recovered.
Everyone who touches the healthcare system in any way is paying for this. According to Film Producer Dave Chase (The Big Heist), unabated, out-of-control, no-end-in-sight overbilling and overpayment of healthcare services has resulted in 20 years of wage stagnation and lowered incomes for the middle class. OPM (“other people’s money”) is paying for hyper-inflated charges and overpaid healthcare, resulting in higher insurance costs and less coverage. Turns out, OPM is your money.
What Can You Do To Protect Your HealthCost Wallet?
There are so many ways that healthcare costs go awry. Hospital charges can be ridiculous, Healthplan reimbursement can be equally ridiculous, medical misadventures and errors, outrageous prescription (even generic) drug charges, unnecessary services, expensive diagnostic or treatment services when lower tech services are just as good. The list goes on.
Be an alert and informed consumer:
1. Review your claims. Keep track of services you and your family members receive, and the dates. If you receive claims for services not provided, or duplicate charges for claims you’ve already paid:
- Report billing inaccuracies and suspected fraud to your health plan.
- Report fraudulent and abusive billing to your employer. Your employer has a vested interest to pay appropriately.
- Report fraudulent and abusive billing to your State’s Department of Insurance. Call or visit their website to inquire the steps to make a formal complaint. DOIs take such complaints very seriously.
- To learn how to avoid and report Medicare fraud and abuse, visit www.ehealthmedicare.com/about-medicare/avoiding-fraud/
2. Understand what you’re paying for and why. If you don’t understand a charge, call the provider or your insurance company to inquire. You will be overpaying if your Healthplan erroneously calculates payment as if the provider is non-participating. You might also be overpaying if the provider balance bills you more than your plan’s maximum allowable fee.
3. Know your health plan benefits. You can find your benefit plan online. Different coverage amounts apply to different services. On one hand, don’t assume a service is covered. On the other hand services are sometimes denied in error.
4. If you are balance billed for emergency/urgent services from non-participating providers, check your benefits. Many insurers cap their member’s out-of-pocket responsibility for emergency care to their in-network benefit. If you’re being balance billed for more, see above.
The following cost-saving suggestions don't relate to the specific incident in this article, they're here as additional ideas to help you reduce unnecessary costs.
5. If you are planning a medical procedure, ask your doctor or health plan in advance for an estimate of what your out-of-pocket costs will be. This is especially important if you have a deductible that hasn’t been satisfied, or if any of the providers are non-participating. Your surgeon will know which assistant surgeon and anesthesiologist will assist him/her. If they are non-participating, request that they either accept the in-plan fee or be replaced with a provider who will.
6. Understand that your physicians probably don’t know the cost of the services they’re prescribing. When they recommend high-tech, high cost medical services:
- Discuss with your physician the value of a diagnostic test or procedure. Are the services truly necessary, and what benefits might the results yield?
- Discuss whether low-tech, low-cost options may be just as good (or even better) than those high-tech, high-cost services?
- Rather than having services performed in the hospital setting, explore whether the same services are available at a lesser cost in a non-hospital based setting.
- Cost compare. Charges can vary dramatically among area providers. Same goes for prescription drug prices.
- Cost does not equal value. The largest hospitals may have better bargaining clout than smaller ones that provide equal or superior quality.
7. If you have a medical condition and plan to travel, call your health plan to determine in advance where you can receive covered medical care if needed while away.
8. Negotiate with your provider’s billing office. If you have received a costly balance bill, or decide to proceed with an expensive service and anticipate high out-of-pocket costs, your provider may negotiate reduced fees. At the very least, negotiate a payment plan (interest-free) that will help you manage the bill without wrecking your credit rating.
9. Prevention! Primary care, flu shots, vaccinations, etc.
10. Monitor how your health plan spends your money. If you see an egregious payment, are billed for a service that you didn't receive or for an amount that seems unreasonable, speak up (see above). Stephan continues to monitor whether his daughter's surgeon keeps his word by refunding $47,500 for a payment that was 37 times hyper-inflated. (We'll let you know when that happens.)
This Takes Patience.
Overwhelmed by healthcare costs and confusing claims? Is it easier just to pay the darn bill than try to decode it and fight the system? You are not alone.
Please send your personal ‘tale from your mailbox’, and ideas how healthcare consumers can control their costs. Watch this space as we learn new approaches to address readers’ concerns and questions.
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