Out-of-Network Rates

June 20, 2011August 23, 2011 J Roberts

By ANNA WILDE MATHEWS

Wall Street Journal

Patients beware: Your out-of-pocket expense for healthcare may increase. Learn about what many large insurers are doing when it comes to paying for doctors and hospitals that are not in a plans network. It could prove to be very costly to the average consumer. All the more need to obtain and advocate who can help negotiate your medical bills

Consumers know they will have to pay out of their pockets if they use medical providers outside their insurers’ networks. But because of a little-noticed change, they may find themselves with even bigger bills than they expect.

Several major insurers are now using rates based on Medicare fees to calculate payments for out-of-network providers. Those amounts are often a lot lower than what doctors and hospitals actually charge.

The upshot: Providers may bill patients for the difference. What’s more, that bill comes on top of whatever patients owe in deductibles or co-payments.

New York entertainment attorney Mark D. Sendroff says he knew he’d get a bill when he went to an out-of-network surgeon for a shoulder operation last summer. But he was shocked when his AetnaHealthinsurance plan paid only around $1,000 of the surgeon’s approximately $30,000 charge — and part of the payment was his deductible. “It was absolutely crazy,” he says.

Mr. Sendroff thought the plan was going to pay his doctor based on a “usual and customary” rate that’s supposed to represent a typical charge for his area. Instead, the insurer pegged the doctor’s reimbursement to 110% of the fee paid by Medicare. Mr. Sendroff appealed the decision, and after he contacted the New York attorney general’s office, Aetna agreed to pay more, he says.

Aetna says some of its plans began basing out-of-network payments on Medicare rates in late 2009, and typically they pay a percentage above the government program’s fees. In New York, the company says it warned insurance brokers the new system might generate bigger out-of-pockets, and mentioned the issue in a summary for potential customers. Aetna declined to comment on Mr. Sendroff’s case, citing privacy rules, but said $30,000 was “well above the average charge” for such surgeries.

Health Care Service, the nonprofit parent of Blue Cross and Blue Shield plans in Illinois and Texas among other states, began phasing in Medicare-based fees last year. Cigna says employers are increasingly opting for plans that pay a set percentage above Medicare.

Insurers say Medicare is a reasonable basis for reimbursement. An Aetna spokeswoman says the Medicare based payments are a “more consistent way of paying and keeping the premium down.” Health Care Service says the Medicare method helps “increase transparency for providers and members.”

For patients, the safest financial path is to use insurers’ networks. When this isn’t possible, they need to do their homework before getting treatment by talking to their providers and insurers. It’s best to get billing codes for each service and run them past the health plan, says Ida Schnipper of Health Champion, a patient-advocacy firm.

Patients also should watch for unexpected out-of-network providers. For instance, an in-network hospital might have out-of-network anesthesiologists. If they do get stuck with a charge they didn’t see coming, they can appeal to the insurer and also try turning to a state regulator for help. Providers also sometimes negotiate discounts with patients.

Starting in August, consumers can turn to a new usual-and-customary medical charge database operated by Fair Health, which will be available at fairhealthconsumer.org. Currently, the site only has dental fees. The nonprofit says it expects a growing number of insurers to use its data.

Cancer costs put treatments out of reach for many

June 14, 2011August 23, 2011 J Roberts

Medical costs are on the rise again. Read about the high costs of cancer treatments that are unfortunately becoming more and more out of reach, not only for the uninsured, but for the insured as well.

By Debra Sherman

(Reuters) – The skyrocketing cost of new cancer treatments is putting advances in fighting the deadly disease out of reach for a growing number of Americans.

Cancer patients are abandoning medical care because the costs are simply too high and medical bills — even among the insured — are unmanageable and put patients at a greater risk of bankruptcy, studies show.

“There’s a growing awareness that the cost of cancer treatment is unsustainable,” said Dr. Lee Schwartzberg, an oncologist who did a study examining the factors that contributed to patients quitting their oral cancer drugs.

Cancer is one of the most costly diseases to treat, largely because many patients are treated over a long term, often with expensive new drugs that are complicated to produce and not available in generic form. As insurance companies cut all benefits, reimbursements on cancer treatments have also declined.

“When it’s an expensive drug, we have to have the hard discussion about a very substantial out-of-pocket payment. I ask: ‘Do you want to spend this money for an average improvement of just a few months of life?’ I’m very uncomfortable having those discussions because I want to focus on the patient getting better,” Schwartzberg, medical director of the West Clinic in Memphis, Tennessee, said in an interview.

Schwartzberg’s and other cost studies presented at the American Society of Clinical Oncology (ASCO) annual meeting come as U.S. lawmakers battle over ways to reduce the national debt, including cuts in healthcare funding. (For full ASCO coverage, see [ID:nN05141382] )

ASCO president Dr. Michael Link, a pediatric oncologist, said access to healthcare should be a national priority.

INSURMOUNTABLE BARRIERS

“We’re thrilled with what we consider to be breakthroughs and wonderful new therapies … yet the barriers for some patients to get them is insurmountable. It is an indictment of how we take care of patients in the United States,” Link said.

Cancer is the second-leading cause of death in the United States, after heart disease. The incidence is expected to increase with an aging population.

The costs for cancer care topped $124 billion in 2010 in the United States, led by breast cancer, according to the National Cancer Institute (NCI). That number is expected to rise as more advanced treatments — targeted therapies that attack specific cancer cells and often have fewer side effects — are adopted as the standards of care. The NCI projects those costs to reach at least $158 billion by 2020.

Until recently, almost all cancer drugs were administered intravenously. Today, about a quarter of them can be given orally, which means fewer visits to the doctor. But pills are often more expensive, have higher co-payments, and are reimbursed by insurers at lower rates than IV drugs, he noted.

Using a database of pharmacy claims paid by private insurers and Medicare, he found, not surprisingly, that those with higher co-payments quit their drugs more often.

Patients with co-payments of more than $500 were four times more likely to abandon treatment than those with co-payments of $100 or less, Schwartzberg said. Claims with the highest co-payments had a 25 percent abandonment rate, compared with 6 percent for co-payments of less than $100.

“Prices of drugs can’t be set so outrageously high,” he said. “We have a problem with cancer care … All stakeholders have to get together and compromise to translate this great science into great patient care without breaking the bank.”

Dr. Yousuf Zafar, an internist at Duke University Health System, did a separate study on the impact high medical bills have on patients’ cancer treatment. (more…)

Healthcare Costs Rise, But at Declining Rates, According to S&P Indices

May 31, 2011 J Roberts

Healthcare Financial Management Association

Perhaps we’ve seen an end to double digit increases with respect to healthcare costs. According to a recent study by Standard and Poor’s costs continue to rise but at a slower pace. What’s interesting about the report is that the Federal Government is doing a better job at containing rising costs than commercial insurers.

The average per capita cost of healthcare services covered by commercial insurance and Medicare programs continued to rise in the 12-month period ending in March, but the rates of increase have slowed down since the index hit its all-time peak in May 2010, according to the Standard & Poor’s (S&P) Healthcare Economic Composite Index.

The 5.77 percent increase in March nearly matched the lowest annual growth rate in the six-year history of the index, which recorded a 5.76 percent increase in June 2007. Since the all-time high of 8.74 percent in May 2010, the index has declined 2.97 percent in 10 months.

“It is apparent that the rates of increase in healthcare costs continue to slow down,” said David M. Blitzer, chairman of the S&P Index Committee. “While there has been some volatility within months, the general trend has been a slowdown. Costs for Medicare patients are being better contained than those covered under commercial insurance plans.”

The indices estimate the per capita change in revenues accrued each month by hospital and professional services facilities for services provided to Medicare patients and patients covered under commercial health insurance programs. The annual growth rates are determined by calculating a percentage change of the 12-month moving averages of the index levels compared with the same month of the prior year.

Care costs continue brisk growth in 2011

May 16, 2011 J Roberts

Another study revealing the ever increasing rise in healthcare costs. Tell us something we don’t know. Will costs ever level off and maybe even decrease or is that just wishful thinking? At this point, I’ll take no increase over the double digit rise in premiums and the greater out-of-pocket expense. Americans continue to pay more and get less. What’s wrong with this picture?

By Tom Murphy

AP Business Writer

Health care costs have more than doubled for some American families over the past nine years, and they show few signs of dropping, according to a

The employee portion of costs paid for a family of four covered by the most common form of employer-sponsored health insurance will climb to a projected $8,008 this year from $3,634 in 2002. That amounts to an additional $84 a week from household budgets for health care.

Preferred provider organization plans are the most common form of employer-sponsored coverage.

The rise in health care costs is slower in 2011 compared to recent years, but they are still rising much higher than costs in other consumer areas, said consulting actuary Lorraine Mayne, one of the report’s authors.

“We don’t see anything on the near-term horizon that’s going to bend that downward,” she said.

The consulting firm compiled its annual health care cost measurement, known as the Milliman Medical Index, by studying provider fees, benefits and average health care use in all 50 states. Health care costs include insurance premiums for health care and other costs that come out of an employee’s pocket like co-payments, deductibles and co-insurance payments.

Employers still pay most of the total health care cost for families, but Milliman said the portion paid by the worker reached an all-time high of almost 40 percent this year.

Counting employers’ contributions, this year’s total health care cost for a family of four more than doubled to $19,393 from $9,235 in 2002. The 2011 figure represents a 7 percent increase compared to 2010.

Health care costs are rising mainly due to price increases in categories like pharmacy, inpatient or outpatient hospital care and doctors’ office visits. Mayne said these charge increases are a bigger factor than changes in health care use.

The national health care overhaul, which started unfolding last year and aims to eventually cover millions of uninsured people, had virtually no impact on health care costs for this year, Mayne said. She also doesn’t see the new law having any “direct, immediate impact” on the trend.

The Milliman report revealed nothing surprising to Helen Darling, CEO of the National Business Group on Health, a non-profit organization that represents large employers on health care issues. Darling, who was not involved in the study, said it offers more evidence of the “serious economic and financial dysfunction of the health care system.”

“The health care system continues to outstrip everything in its growth,” she said, noting that the economy “simply can’t support this kind of expense.”

Milliman said the total for health care costs varies around the country and doesn’t represent the total for all health care plans. Variables like costs and use can differ for government-sponsored Medicare and Medicaid coverage or other forms of commercial health insurance.

Control of health costs up to you

May 11, 2011May 13, 2011 J Roberts

By Robert Nelson WORLD-HERALD STAFF WRITER

Medical Cost Advocate is in the news. This time CEO, Derek Fitteron talks with a reporter from the World Herald about consumer medical liabilities. Read on to learn how Medical Cost Advocate can assist you in reducing some of those large medical bills.

I recently had part of my neck rebuilt with corpse bone and titanium. A week ago, the itemized bill arrived for my surgery.

At the end of page 4, I found the “sub-total of charges”:

$48,303.44.

The only charge that seemed to have any connection to any free-market reality was about $15,000 paid to the world-class spine surgeon.

Well, OK, the nurses certainly deserved to be paid well. And the room was comfortable and modern. From arrival to departure, my stay was Nebraska-friendly with German-like precision.

And I guess the fellow who managed to keep me between oblivious and oblivion during surgery should be well compensated also.

But still, outrageous.

Especially when you start digging into the “smaller” charges.

I paid $369 for what must have been a very special dose of vitamin D. Something that covered my feet was $149.28.

I see a $16 charge for a pill I have been taking every night for several years at a cost of 8 cents per pill.

Seventy-five itemized charges.

Including $1,200 for each of six titanium screws used to bolt down two small titanium plates that cost $4,918.

Feeling disconnected from the free market, I went online, joined a medical trade organization, identified the eight pieces of medical-grade titanium alloy in my neck and then emailed one of the manufacturers of the equipment in China – Zhejiang Guangci Medical Device Co. – requesting a price quote.

I’m not a doctor, or an international importer, but I’m pretty sure my sources in China could get me identical parts to those in my neck for under $50.

It’s apples to oranges for all sorts of reasons, not the least of which are the huge costs of making sure safe objects are put in your body by the right people using the right equipment.

Still, I feel ripped off.

“A lot of what you’re seeing in that bill is you paying for all the people who can’t pay,” said Derek Fitteron, president and CEO of Medical Cost Advocate localhost/wp1, a New Jersey-based company made up of health care attorneys who negotiate with providers to lower the bills of patients they represent.

“Most of the problem really isn’t greed,” he said. “You’ve got a host of reasons that drive even those providers with only good intentions to give you bills that look outrageous.

“You might notice that some of those numbers that seem outrageous to you are even a negotiated price that your insurer has agreed to.

“That doesn’t mean a provider isn’t going to try to make you the person who covers the extra costs they’re seeing or the debts they aren’t getting paid,” he said.

His company makes its money because his staffers know the wholesale prices and going rates for all things medical.

His people argue with the provider. Then, like an attorney who wins a settlement for a client, his company takes a percentage of the money it saved the client.

Fitteron said that controlling outlandish medical costs ultimately is up to the consumer. You need to study the details of your health coverage. You also need to discuss with the provider the costs of a procedure prior to having the work done, he said.

“It’s the old adage: Five different people walk into the hospital with the same problem, and all of them pay vastly different amounts to get the problem fixed,” he said. “You have to be a smart and savvy shopper to be the one who pays less.”

Less? I asked. Seems like the wrong word choice considering the huge numbers.

“That’s a relative term,” he said. “That’s ‘less’ of an increasingly huge amount of money.”

Why Health Care Costs Keep Rising: What You Need to Know

May 4, 2011 J Roberts

ABC News

By HUMA KHAN

The below article provides some insights as to why healthcare costs continue to rise. Check it out!

Republicans and Democrats may disagree on what a health care bill should include, but both parties agree that dramatically rising health care costs need to be contained.

The U.S. government spent more than $2.3 trillion on health care in 2008, more than three times the $714 billion spent in 1990, according to the Kaiser Family Foundation. In 2008, U.S. health care spending averaged $7,681 per person in 2008.

To put that into perspective, the United States spends twice as much on health care as it does on food, according to the McKinsey Global Institute, even though the prevalence of disease is relatively less than in comparable countries.

At the same time, for consumers, premiums continue to rise sharply. Since 1999, they have increased 131 percent for employer-sponsored health coverage, according to Kaiser. Stories of families facing unaffordable premium hikes can be found across the country.

“Health care costs are partly so high because they have been increasing rapidly,” said Stuart Guterman, assistant vice president for the Commonwealth Fund’s Program on Payment System Reform. “There’s a long list of factors like technology and the organization of health care that doesn’t promote efficient and effective care.”

Despite President Obama’s bipartisan health care summit last month, both parties continue to bicker about what should be included in a health care bill, with each side presenting its own argument on what specific health care costs should be contained.

Some experts argue that while the health care bill, as proposed by Obama and congressional Democrats, expands benefits and seeks to implement insurance reforms that would open up coverage to a wider scope of people, it does not address the core issues behind rising health care costs. Proponents of the legislation argue that it is a start and creates the foundation for sustainable changes in the long term.

Here are some of the drivers of cost increases: (more…)

Healthcare Costs Rise, According to S&P Indices

April 26, 2011 J Roberts

Healthcare Financial Management Association

Healthcare costs continue to rise. Even though the rate of increase may have slowed, costs nonetheless continue to rise.

The average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased by 6.19 percent over the 12-month period ending in February, as measured by the Standard & Poor’s (S&P) Healthcare Economic Composite Index.

Healthcare costs covered by commercial insurance rose by 7.97 percent and Medicare claim costs rose at an annual rate of 3.22 percent, according to the S&P indices. Overall healthcare costs continue to increase at a slower rate, according to the index. In the six-year history of the Composite Index, the highest annual growth rate was 8.74 percent in May 2010. With a 6.19 percent increase in February, claims costs growth rates have declined 2.5 percent in nine months.

Rising Cost Tops Employees’ Health Care Worries

April 14, 2011 J Roberts

Employers are still concerned about the rising cost of healthcare. Will there be any end in sight?

By Stephen Miller

U.S. employees’ greatest concerns about health care are rising costs, canceled coverage and new taxes on medical benefits. Their employers are most concerned about the lack of federal guidance on what requirements must be communicated to employees, according to a December 2010 survey by HighRoads, a benefits administration service provider.

“There appears to be a healthy skepticism on the employer’s part about the content and timing of guidance from the federal government on how to administer and communicate future plan changes,” said Kim Buckey, practice lead at HighRoads. “While most employers increased their communications efforts during the fall 2010 open enrollment period to communicate changes required by health care reform, there are still doubts about how effective those communications were.”

Buckey advised, “There is clearly an opportunity to do some follow-up communications—based on the actual employee elections during open enrollment—or employee sensing (surveys or focus groups) midyear to determine whether employees truly understood the impact of the year’s plan changes.”

Employees’ Concerns

The biggest concerns HR professionals and benefits managers are hearing from employees about how health care reform affects them, HighRoads found, include:

• Increased cost of coverage (noted by 50 percent of respondents).

• Cancellation of benefits (13 percent).

• Government taxation of medical benefits (13 percent).

• Ability to add adult dependents (12 percent).

• No real concerns (12 percent).

Increased Communications

While 88 percent of employers reported that they had increased their employee communications to address health care reform, many still worried that the communications might not have been enough. The biggest communications concerns employers had around health care reform for the year ahead include:

• Lack of federal guidance on what the requirements are or how any changes in guidance during the year might change what has been communicated to employees (25 percent).

• The disconnect on cost and existing plans, because the law is predicated on being cost neutral to taxpayers and allowing employees to not lose the coverage they have (13 percent).

• Making sure that employees are told everything that is changing under their plans (13 percent).

• Employee understanding of changes and how the changes affect them (12 percent).

Health care’s hidden costs: $363 billion

April 4, 2011 J Roberts

Consumers beware of the hidden or extra costs associated with healthcare not covered by insurance or traditional Medicare. A recent article states that consumers are paying even more than was expected for out-of-pocket costs. The most alarming fact is that the average household income fell 1.9% in 2010 while health care costs rose 6%.

CNN Money

By Parija Kavilanz

A year after the passing of health reform, a new industry report revealed that consumers may be paying billions of dollars more in out-of-pocket health care expenses than was previously thought.

These “hidden” costs of health care — like taking time off to care for elderly parents — add up to $363 billion, according to a report from the Deloitte Center for Health Solutions, a research group.

That amounts to $1,355 per consumer, on top of the $8,000 the government says people spend on doctor fees and hospital care.

“We’re surprised that this number came in so high. It’s significant,” said Paul Keckley, executive director with the group.

The out-of-pocket costs that the government tallies usually include only insurance-related costs like premiums, deductibles, and co-payments.

Keckley said the study is the first to estimate how much consumers dish out on health care related goods and services not covered by private or government insurance.

These include: ambulance services, alternative medicines, nutritional products and vitamins, weight-loss centers and supervisory care of elderly family members.

“These costs can add up to billions of dollars, even eclipsing housing as a household expense,” said Keckley.

The Deloitte study found that half the hidden costs are for supervisory care, or the unpaid care given by family and friends.

“We compared on an hourly basis the average number of hours per month taken off work to look after a family member or friend, and lost wages in doing this,” said Keckley.

The report estimates the value of unpaid care is $12.60 per hour, or $199 billion a year.

“It has been one year since the passage of health care reform,” said Keckley. “We wanted to understand the financial context behind decisions that consumers are making about how they spend their money on health care.”

0:00 /2:22Humana deals with health care reform

As health reform rolls out over the next few years, Keckley expects that out-of-pocket health care costs to consumers will increase quickly. Health care costs continue to rise faster than household incomes and insurers are passing along more costs to their customers.

The average household income fell 1.9% last year while health care costs rose 6%, he said.

“This is a perfect storm in which consumers’ hidden costs will only increase exponentially in the near future.”

The Deloitte study looked at the most recently available health care expenditure data from the government. The firm, with Harris Interactive, also polled 1,008 U.S. adults,18 and older, between Sept. 29 to Oct. 4, 2010.

Ultrasound at $59,490 Is Outrage in Aetna Claim Against Doctors

March 29, 2011March 29, 2011 J Roberts

Here is recent news about doctors charging outrageous fees for some basic services. This is surely one of the reasons health care costs continues to rise. Consumers, please be sure to confirm what insurance your doctor accepts. If he or she is not in your plan’s network, inquire what the charge will be and find out what you may be responsible for in out-of-pocket costs. Medical Cost Advocate can assist you in negotiating your out-of-pocket costs. No one wants to be stuck with a $56,980 consultation fee.

by Peter Waldman

(Bloomberg) — Aetna Inc. is suing six New Jersey doctors over medical bills it calls “unconscionable,” including $56,980 for a bedside consultation and $59,490 for an ultrasound that typically costs $74.

The lawsuits could help determine what pricing limits insurers can impose on ”out-of-network” physicians who don’t have contracts with health plans that spell out how much a service or procedure can cost.

One defendant billed $30,000 for a Caesarean birth, and another raised his fee for seeing a critically ill patient in a hospital to $9,000 in 2008 from $500 the year before, the insurer alleges in the suits. The Caesarean price was more than 10 times the in-network amount Aetna quotes on its website.

“If these charges are accurate, consumers and purchasers should be outraged,” said David Lansky, president of the San Francisco-based Pacific Business Group on Health, a coalition of health-insurance buyers that includes Chevron Corp., Walt Disney Co. and General Electric Co.

Lawyers for the doctors declined to comment on specific charges in the suits, and said their clients did nothing wrong.

The insurance industry is grappling with how to respond to out-of-network hospital physicians who realize they have pricing muscle, according to Arthur Leibowitz, chief medical officer of Health Advocate Inc., a Plymouth Meeting, Pennsylvania, insurance adviser.

“These doctors can charge whatever they want,” Leibowitz said. “The challenge for the carriers is to come up with an agreeable, acceptable, unbiased judgment as to what a reasonable and customary reimbursement rate is.”

AMA Lawsuits

Aetna tried in 2007 to impose caps on some out-of-network payments, prompting doctor complaints to the New Jersey Department of Banking and Insurance. The agency sided with the doctors, fined the company $2.5 million, and ordered it to pay out-of-network practitioners enough so that patients wouldn’t be asked to pay balances other than co-pays.

In 2009, Aetna, UnitedHealth Group Inc., Cigna Corp. and WellPoint Inc. were accused by the New York attorney general of underpaying out-of-network physicians by manipulating a database used to calculate payments. They paid a total of $90 million in settlements without admitting wrongdoing. UnitedHealthcare agreed that year to pay $350 million to settle a lawsuit by the American Medical Association over the same issues. Similar AMA lawsuits against Aetna, Cigna and Wellpoint are pending.

Rare Glimpse

The Aetna lawsuits, filed in superior court in Camden, New Jersey, over the last eight months, allege the defendants violated New Jersey Board of Medical Examiners rules against excessive fees, and seek triple damages under state insurance- fraud laws against filing false or misleading claims.

The complaints provide a rare glimpse at the sums physicians earn from an insurer and the huge variations in what different doctors charge and receive for the same services.

Aetna reimbursed the defendants $8.3 million in 2009, up from $4.9 million in 2008, spokeswoman Cynthia Michener said, sometimes paying the full amount demanded and sometimes not. The insurer paid some of the large charges because of state regulations mandating timely payments and to prevent doctors from sending patients big bills, Michener said.

(more…)