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Out-of-network Medical Costs Affect Everyone

October 5, 2013 in health care costs, Health Insurance, Hospital Bills, Insurance Bills, Medical Debt, Member Stories

According to a survey this year by America’s Health Insurance Plans, 12% of all medical claims received by insurance carriers were out-of-network in 2011. That translates into huge out-of-pocket costs for American consumers, and sometimes uncapped costs. Out-of-network charges can be nearly 100 times (100 times!!) the rate that Medicare allows (typically you will be no more than 2 or 3 times the Medicare rate with insurance).

Don’t think any of that applies to you because you have good insurance? Think again.

Excessive out-of-network fees are typically not covered by your insurance carrier to the full extent, and are often not applied to your deductible. This means you could not only be on the hook for large fees for some services, but those amounts could be uncapped, the equivalent of being uninsured, even while having a very good insurance plan. New Obamacare plans don’t solve this, as they are not required to cap out-of-network charges. And almost all carriers are shrinking their networks further for new exchange plans. How did this slip through the Affordable Care Act?

Health insurance carriers negotiate rates with a number of physicians and hospitals to get lower rates with its plan holders. These providers and facilities form a health plan’s “network”. When patients go to providers “in-network”, the insurance carrier pays significantly less. It is reasonable then that a plan might want to discourage you from going with a provider not in that network. It is also reasonable for a carrier to remove all but the lowest-cost providers from its network over time. The ACA also wants to keep people away from the highest-priced providers, in an effort to reduce healthcare costs overall.

The trouble is, sometimes going out-of-network is the best or only way to ensure critical healthcare. Specialists and key facilities in various parts of the country may not have a relationship with your carrier. There are also many cases when you end up receiving services from an out-of-network provider because of the nature of integrated care by professionals from a number of different companies. For example, even though you know your physician and hospital are in-network, you may not think to ask if the anesthesiologist is.

The 12% figure will surely rise under the ACA. More individuals will find that their preferred doctor is no longer in their plan’s network. Employers are beginning to cut spouses and children from plans, which will add to the confusion about which doctor you should be going to for which family member.

Some of the largest carriers like UnitedHealthcare and Aetna will only cover out-of-network fees up to what they consider a “fair” amount, and then you have to pay the rest yourself, even if you’ve already met your deductible. Good luck finding out what the cost will be beforehand. Doctors and nurses don’t know, and many facilities are known to not provide that information even if you call their billing department.

For more information on out-of-network services and payment, see FairHealth’s website. You can also see the websites of UnitedHealthcare and Aetna on how they deal with out-of-network costs.

 

Randy Cox
Founder & CEO of Pricing Healthcare

Protect Yourself from Medical Debt Overload with Self-Advocacy

December 27, 2012 in health care costs, Health Insurance, Hospital Bills, Insurance Bills, Medical Debt

You or someone you know may be closing out the year with large amounts of medical debt even after insurance payments or what you thought were relatively minor surgeries or other procedures. In fact, you may feel like you’ve been hit by a blizzard by the sheer number of bills related to that one procedure. And they keep on coming.

One step you can do is confirm or validate the bill, especially if a lot of time has elapsed since the initial service. This simply means you want proof that you had the services rendered and do in fact owe the balance due. Under the Fair Credit Reporting Act, credit agencies are supposed to help consumers to ensure that bills are correct and fair before payment is rendered. But without good knowledge of these laws and taking the time necessary to investigate, you could end up paying much more than you owe. Here are a few other ways to stand up for yourself and your bottom line.

Keep Proof of Charges

The bad apples that pollute our debt collection environment may be operating on an entirely fraudulent basis. There have been many news stories of consumers receiving calls from phone bank operators, posing fraudulently as legitimate debt collectors. A tip off is that in many instances, the caller will fail to fully identify him/herself, their company, and the nature of the call. There are also reports that unprincipled companies are using ‘bread crumbs’ of financial data in order to manufacture phony debts that their workers demand payment for during outbound telephone calls. Collectors have been known to threaten litigation or other legal action without any legal basis as well as fail to provide written proof that a debt is owed when requested by the consumer.

One big part of your arsenal is the paper trail of charges, as well as Explanation of Benefits (or EOBs) that show whether or not the insurance company paid their fair share. Keep all of these documents on hand so that you can prove any overcharges and trigger an analysis by a credit agency.

Get Credit Bureaus In On the Action Read the rest of this entry →

US Healthcare: an oxymoron

October 19, 2012 in Health Insurance, Hospital Bills, Insurance Bills, Medical Care, Medical Debt

It was very exciting to read about Amanda’s grass roots Twitter research.  Amanda, you have started an activist conversation that we, the people, need to have.  Comments from so many people on what Amanda started touched on a deep and growing moral and economic issue for which we must demand answers: loss of a job means loss of insurance, medical debt, loss of shelter and bankruptcy is not a rarity, unaffordable insurance premiums as the norm for the middle class, poor medical care for the disenfranchised, etc.  I will add another observation.  Do you know that if you have a very serious mental illness, have MassHealth, and need to be in hospital, you may wait 2-3 days in an ER for a bed?  Or, if you have poor insurance, be treated in the ER, and when you are medicated and are saner, sent home? There also were a couple of comments from folks who wanted to know why the US did not have systems of care like The UK and Canada.  People want to move to Vermont where there is a progressive move toward single payer healthcare for everybody.  There IS an organization in the US committed to healthcare for all. PNHP was started by public health physicians in 1985!

Does anyone wonder why there is no political will in the US? PNHP started in 1985 with the inception of “managed care”, also viewed by many of us as for-profit healthcare. In this case “healthcare” is an oxymoron, isn’t it? Read the rest of this entry →

Check This! @amandapalmer’s #insurancepoll

October 16, 2012 in health care costs, Health Insurance, Insurance Bills, Medical Debt

As you read this, there’s a fascinating conversation about health insurance in America and abroad taking place on Twitter and on musician Amanda Palmer’s blog. It’s an outpouring of stories about medical bankruptcy, asking a friend to stitch up a deep finger wound, skipping medications and losing loved ones who couldn’t afford needed care.

The conversation started shortly after Palmer read Nick Kristof’s column about a college buddy with stage 4 prostate cancer, cancer he didn’t catch sooner because he didn’t have health insurance.

Palmer decided to poll her 698k Twitter followers about their health insurance, She asked these four questions:

1) COUNTRY?! 2) profession? 3) insured? 4) if not, why not, if so, at what cost per month (or covered by job)?

Palmer has a couple of volunteers now tallying the results, which keep coming in (check the hashtag #insurancepoll).

Many of Palmer’s followers live in Germany, the UK or France and are baffled by the stories on Palmer’s blog about the cracks in the American health care system.

In Massachusetts, Read the rest of this entry →

Will Medicare Changes Result in Better Quality?

September 3, 2012 in health care costs, Health Insurance, Hospital Bills, Insurance Bills, Medical Care, Medical Debt, Medicare

As the price of health care in America keeps rising, you may be among those that are frustrated by the kind of generic approach taken by  health insurance companies and government entitlement programs. The traditional fee-for-service format of health care reimbursement means that the best hospitals and doctor’s offices don’t get rewarded and the lower performing offices don’t have consequences. But, this is all likely to change with new Medicare rules that are slated to pursue more of a ‘meritocracy’ in the way that health care dollars get paid out.

New Medicare Rules

Reports from the Centers for Medicare and Medicaid Services show that Medicare is going to begin making some changes in the way that it reimburses health care providers starting late this year. In what Medicare officials call a ‘value-based purchasing’ program, Medicare will consider various aspects of a provider’s operations in setting the reimbursement rates for that particular office. Key factors will include observation of outcomes, or in other words, whether the procedures and services performed at an office actually help patients to recover from illnesses and improve quality of life.

Responses to the Changes

For you, this represents a major change and a big potential edge in making sure you get what you deserve for the money, especially when you have out of pocket expenses. On the downside, though, some providers are arguing that hospitals and offices in rural areas, or those with other significant disadvantages, may be punished unfairly. Read the rest of this entry →

How Much is Health Insurance Coverage Really Costing You?

August 30, 2012 in health care costs, Health Insurance, Hospital Bills, Insurance Bills, Medical Care, Medical Debt, Medicare

Just when you think you have the health care business figured out, new reports come out showing even more dark details about how American patients are simply charged massive amounts of money for health care services on a pretty arbitrary basis.

The newest wrinkle in this story actually turns the conventional wisdom about payment for health care on its ear: where many assume that most uninsured patients get the highest bills, new reports are showing that, in many cases, the “cash-up-front” deals given to cash-paying patients may be as little as less than half of a contractually agreed price that the hospital would bill the insurance company. Why is this a problem? Because it means that many of those who pay high deductibles, premiums and coinsurance on a health plan may still be paying more for each service, visit or procedure than someone who doesn’t have any insurance at all. It also injects a huge monkey wrench into the now established idea that everyone needs health insurance to make health care affordable. On the flip side, if you have a high deductible but choose to self-pay a medical bill, how will you ever meet your deductible? This is particularly troublesome should you have a catastrophic event. Read the rest of this entry →

Small Debt Medical Bills Can Add Up to Large Debt

August 13, 2012 in Medical Debt

Here’s another tip about a specific debt situation that often affects those who have a false sense of security from owing just a little bit of money to a medical office or other business:

Pay attention to the less significant debt letters and small bill statements you receive. The major problem with ignoring these is that even the smallest debts, debts that may total only a couple of hundred dollars, can balloon into massive amounts of money when you don’t understand the collections process, the accrual of interest, or other factors.

So, how does your small dollar medical bill become a giant drag on your finances? It usually happens when the borrower simply decides not to pay anything and lets the bill lapse into collections. When third party collectors receive this account, they may be able to add certain types of charges. This may include additional fees for filing the debt in a legal office, as well as other fees related to documentation of the existing debt. Any costs that involve trying to shoe-horn the borrower into a local court can also show up on that person’s credit. Then there is the issue of ‘communications costs’ related to overdue bill notices, phone calls and more. While there are federal collection laws, each state also follows its own set of laws.

Avoiding critical communications with the original creditor, the doctor’s office, can get you into a lot of financial trouble. Remember this when small dollar claims for co-pays, deductibles and other expenses come in the mail, and you could be helping yourself out of many hundreds of dollars of additional debt. When it comes to handling various types of debt, and medical bills in particular, staying out of the loop and waiting until the last minute is almost always a poor choice.

(Update yourself on Senate Bill 2149 – Medical Debt Responsibility Act 2012: A bill currently in review to exclude medical debt from consumer reports that has been in collection and has been fully paid or settled.)

Challenging Rejected Health Insurance Claims

August 5, 2012 in health care costs, Health Insurance, Hospital Bills, Insurance Bills, Medical Debt

According to the AHA (American Hospital Association), 87% of hospitals expect bad medical debt to continue to grow.  And it’s no wonder with situations like a very common one experienced by patients across the nation. You are seen by your healthcare provider for a service or procedure that should be covered under your insurance plan per plan benefits. However, when the Explanation of Benefits is received from the insurance carrier, charges have been denied for coverage. What happened?

Reimbursement is based on a few key areas including plan benefits and coverage period, medical necessity, correct patient information, diagnosis code, and procedure/service code (CPT), etc. An incorrect key stroke can cause your claim to be rejected. Or, an erroneous code can result in zero dollars paid. What can you do?

Begin by appealing the rejection to your doctor and the insurance company. As described above, it may have been a simple clerical error that caused charges to be dismissed. In other situations, you want to confirm that the CPT and diagnosis codes are cross referenced. What may have happened is that the CPT code did not support the diagnosis or the reverse. Codes are chosen based on the physician’s notes, documentation, and national coding guidelines. Sometimes, the CPT code may not be specific enough or it may have incorrectly described the level of care. Most insurance companies have their own unique process and timeline for appeal submissions.

If you’ve exhausted your appeal efforts and your claim remains unpaid, you may want to file a complaint with your state’s health insurance commissioner and or enlist a medical bill advocate to navigate the process for you. Whichever route you choose, be persistent, professional, and follow through.

Managing High Health Care Costs on Your Family’s Budget

July 22, 2012 in health care costs, Health Insurance, Hospital Bills, Insurance Bills, Medical Care, Medical Debt

Recent news on the costs of health care, in the U.S. and around the world, is focusing on what experts call “double digit levels” of annual increases. This is bad news for us, and troubling for the country as a whole. What it translates to is annual increases over 10%, where health care costs could conceivably double in a decade. Since this kind of price spike has been going on for a while already, many American families already consider major medical care to be priced above their ability to afford it.

Who Pays the Bill? 

Part of the particular desperation that has surrounded the American medical industry in the past few years has to do with who usually pays the bill.

In the past, employer group plans provided coverage for the majority of Americans. A few decades ago, this model was built on stable, long-term contracts between workers and companies, where those who stayed loyal to a business could expect to keep a job for life. Also, employers paid a major part of all premium costs.

In the present, however, we’ve felt the rise of health care prices. First, employers started to lower the premium amounts they were willing to pay. As jobs went overseas, employers laid off workers. Then, as the economy grew weaker, more lost jobs. An unemployment rate of over 10% means much more than lost wages: it means that many thousands of American families are suddenly left without coverage.

Meanwhile, the group plans that are left often do not pay the majority of premiums and often include high deductibles, which are also extremely expensive for the average family. In fact, some employers hardly pay anything toward premiums at all, while others provide “mini-medical” plans or other virtually useless coverage, or move full-time positions to part-time and thus avoid offering plans.

What Can You Do? Read the rest of this entry →

Maintain Open Communication with Medical Bill Debt

July 14, 2012 in health care costs, Health Insurance, Hospital Bills, Insurance Bills, Medical Care, Medical Debt

The Affordable Care Act is cracking down on some of the most aggressive ways that hospitals categorized as charitable or nonprofit facilities for tax exemption can seek to shake money out of patients. Reports of the new laws also often offer some of the most common advice to protect you and your family from unfair or excessive medical debt.

Always Talk to Your Providers

One of the biggest pieces of advice is to always ask up front about available charity and financial assistance programs. It’s a great idea to ask about health care costs, and detail payment options, before you sign up for any given course of treatment. But beyond this, dialogue with the provider is also a key to keeping medical bills from showing up on credit reports. It’s true that even with the best back channel dialogue, some hospital administrators will still send bills to collections, but having an open communication with the provider will prevent this in the majority of cases where reasonable financial offices simply ask that patients keep in touch about their debt and pay to the best of their ability.

Make Sure You Are Covered

Essentially, the Affordable Care Act can be seen as a double-edged sword – depending on what side of the table you are on. Read the rest of this entry →

Past Due Medical Bills: When Do I Have to Pay?

May 5, 2012 in health care costs, Health Insurance, Hospital Bills, Insurance Bills, Medical Debt, Medicare

Have you received a medical or hospital bill with no clear due date? This can be because of how bills are laid out or because of design issues. Typically, a bill or patient statement will show medical debt as 30, 60, or 90 days past due, providing the kind of urgency that can make you drop a check in the mail. Bills may also be labeled “second notice” or “third notice” to show that the biller has already tried to contact you. But, all of that doesn’t always tell you what you need to know: how long you have to pay before the bill goes to collections. There are several reasons you may choose not to pay your medical debt right away including having a lot of bills or long-term debts to juggle. Prioritizing which ones to pay can take precedent to stay afloat. And, some billing statements require real, actionable steps while medical bills seem to be written in some strange, esoteric language.

Medical Debt Collection: Common Practices

Every medical provider has their own system for handling past due bills. Some are quicker than others to send a past due bill to collections. Many have different billing systems that represent debt in different ways. Some may be explicit about a due date, others will not. In some cases, when patients call, the medical office admits that they don’t even know the exact date when a bill will go to collections. That’s what motivates many experienced consumer advocates and others to recommend “playing it safe” and promptly paying all past due medical bills aged longer than 30 days, which is a common grace period for payments.

Some patients, though, will make active attempts to talk to providers. Those who pick up the phone can often get on payment plans that will make due dates and everything else much clearer, while allowing for deferred payment according to the patient’s finances. Some can even qualify for charity. In many cases, it’s this direct communication which can yield benefits for both parties: you know where you stand and your provider receives data on how and when you are likely to pay a particular bill. It’s a win-win, and that’s why when it comes to vague patient statements, the direct approach is often best. How do you promote open communication with your provider on past due medical bills?

Overused and Unnecessary Medical Procedures

April 28, 2012 in health care costs, Health Insurance, Hospital Bills, Insurance Bills, Medical Care, Medical Debt, Medicare, Member Stories

Nine physician specialty societies are each reporting a top five list of commonly used procedures that are often unnecessary. These societies represent 375,000 physicians across the country.

Some of the procedures cited include:

  • Brain scan after fainting (without other relevant symptoms)
  • Antibiotics for sinusitis (while typically resolving itself in two weeks, 80% of patients are prescribed antibiotics. CT scans are also usually unnecessary.)
  • Admission and pre-operative chest X-rays (routine X-rays are not needed.)
  • Colonoscopies (not recommended but once a decade.)
  • Cardiac stress tests (they do not need to be part of a checkup for a healthy adult.)
  • Lower back pain (unless another ailment is suspected, X-rays are not needed in the first six weeks.)

Unwarranted testing can lead to stress, over treatment, higher medical bills, and even unneeded invasive procedures.

In fact, the natural tendency to screen for heart disease prior to having any symptoms, like getting a stress test as a 50th birthday present, hasn’t “panned out,” according to a preventive cardiologist at Northwestern Memorial Hospital.

Study members suggested that patients and doctors have to thoroughly discuss any tests/procedures even if they are suggested by patients because they are not always needed.

25 Million Americans Underinsured Including Middle and Upper Income Families

April 18, 2012 in health care costs, Health Insurance, Hospital Bills, Insurance Bills, Medical Debt, Medicare

As current government initiatives wrestle with the issue of millions of uninsured Americans facing potential medical bankruptcy, new studies are revealing that it’s not just the uninsured who are at risk. The issue of underinsured American individuals and families is becoming a major part of today’s healthcare conversation and alerting many more Americans to the dangers that they face, even if they have access to affordable health insurance policies.

Current statistics show a startling trend, where being underinsured is becoming a common way to fall into extreme medical debt and eventual bankruptcy or bad credit situations. Research by the Commonwealth Fund that appeared in recent industry journals shows that America’s underinsured community has doubled in the past four years to over 25 million people. While the highest number of underinsured Americans are in the income range below the poverty level, research shows that middle and upper income families are being affected in larger numbers each year. Research also shows that some individuals with what others would consider healthy annual incomes are still very likely to become underinsured in the immediate future.

In general, being underinsured has to do with the cost of one’s medical bills against that person’s annual income. Read the rest of this entry →

Great PBS Documentary on Cheaper AND Better Healthcare

April 14, 2012 in health care costs, Health Insurance, Hospital Bills, Insurance Bills, Medical Debt, Member Stories

Just watched ”U.S. Health Care: The Good News” (Episode: The Good News in American Medicine, with T.R. Reid) on PBS.   I was flipping through the channels and it caught my attention.  I watched ”Sicko” when it came out in movie theaters and before I finished my Coke I was convinced that we needed a major overhaul in medical care in the U.S.  It just doesn’t seem humane that people could die because of insurance loopholes or die because they don’t have enough money to pay for their healthcare.

Obviously nothing in life is free. Everything requires energy- which always equates to money in some way or another. Since energy (and money) are finite resources, the only solution seems to be in overhauling the entire system to make it cheaper to get and stay healthy.  And when I saw the part of the show’s title that said ”The Good News in American Medicine”, I had to watch.  Good news.  What is that?

I was very pleased to see there is good news out there. Many communities are doing a lot to overhaul the system and provide care to everyone, regardless of coverage, while bringing the costs way down. It was refreshing to see that people are trying and finding ways to succeed in this area.

I’d recommend watching this show and passing the link along to friends. The more people know about this, the more we have a chance at getting medical care costs down to manageable levels (and be a more humane society). The full video is here:

http://video.pbs.org/video/2198039605/

When is a Medical Bill Sent to a Collection Agency?

March 5, 2012 in health care costs, Health Insurance, Hospital Bills, Insurance Bills, Medical Care, Medical Debt

A recent article in the Chicago Tribune’s March 4, 2012, issue “Small, Paid-off Medical Debt Can Mar Credit, Upend Financing for Unknowing Americans” highlighted how quickly a pristine credit can plummet when unexpected medical bill balances show up on credit reports including previously paid off medical debt. According to the Commonwealth Fund, 30 million Americans were contacted by collection agencies in 2010, an increase of over 25 percent from 2005. And, the Access Project, a research group funded by health care foundations and advocates of tougher laws on medical debt collectors, estimate that over 3 million Americans who have paid off their debt in full still have their balances appearing on their credit reports. Most of the collection actions are attributed to medical bills with the majority of outstanding balances under $250.00.

Medical bills are sent to collection agencies quicker than you think. In fact, it is common to receive a bill within a few days or so of your procedure or hospital stay and the clock starts ticking. So, what can you do to minimize your account from being turned over to a collection agency?

What if your hotel bill was like a hospital bill?

February 16, 2012 in Hospital Bills, Medical Care, Medical Debt

Patients and their caregivers are uniquely positioned to recognize inefficiency in the healthcare system but are seldom empowered with information they need to reduce harmful spending.

For doctors, “do no harm” is one of the first principles of patient care and as a result, most clinicians are taught a basic framework to consider patient safety. Unfortunately, in an era when many patients are saddled with increasingly expensive medical bills and insurance premiums, no similar framework exists when it comes to considering issues of cost and value.

Funded with a grant from the American Board of Internal Medicine Foundation,  Costs of Care has partnered with medical educators at Harvard Medical School and the University of Chicago to start addressing this problem. We are developing a series of web-based medical education videos that use clinical vignettes to illustrate core principles of cost-consideration, including how to communicate with patients about avoiding unnecessary care and reducing overused or misused tests and procedures.

As part of the project launch, we released a new teaser video today called “What if Your Hotel Bill Was Like a Hospital Bill?”. The video is a tongue-in-cheek depiction of the challenges patients face in deciphering medical expenses, and their additional confusion when they learn doctors are not trained to consider costs.

What do you think?

 

Tips on avoiding medical debt

January 13, 2012 in Medical Debt

man with thought bubble: "Wait a minute, I owe that much for a few medical procedures? How can I afford to pay this bill?"

A few weeks ago you visited your doctor. Maybe you had a few tests run. Maybe you had an out-patient procedure done. Or maybe you even had a short stay in the hospital.

Then comes your bill. And it’s far more expensive than you’d expected. Now what?

Many people are surprised that the price tag on their medical bill isn’t set in stone. Between financial assistance programs and negotiating directly with your provider, there are strategic ways to avoid knocks from the collection agency.

Choices, Choices

First things first: You should deal with your medical bills as soon as possible. You have several options:

Option 1: Not paying

If you’re uninsured or financially struggling, the idea of paying a costly medical bill can be daunting. But not paying isn’t so much an option as it is a danger. Most unpaid medical bills will eventually be sent to a collections agency, and collectors often report medical bills to credit bureaus. If you want to spare your credit score a beating, move onto options 2, 3, or 4.

Option 2: Apply for financial assistance Read the rest of this entry →