help with medical bills

When Health Costs Harm Your Credit

Doug

By ELISABETH ROSENTHAL New York Times

This is an excellent article outlining the problems people can run into by allowing medical bills to go unpaid. It takes a long time to decipher what you actually owe, but providers can report you to credit agencies for late payment very quickly.  People in these types of situations have reason to worry.

LIKE most people, I am generally vigilant about paying my bills — credit cards, mortgage, cellphone and so on. But medical bills have a different trajectory. I (usually) open the envelopes and peruse the amalgam of codes and charges. I sigh or swear. And set them aside for when I have time to clarify the confusion: An out-of-network charge from a doctor I know is in-network? An un-itemized laboratory bill from a doctor I’ve never heard of? A bill for a huge charge before my insurer has paid its yet unknown portion of a hospital’s unknowable fee?

I would never countenance the phrase “60 days past due” on my Visa card statement. But medical bills? Well… with the complex negotiations that determine my ultimate payment, it often takes months to understand what I actually owe.

Unfortunately, I may be playing a dangerous game. Mounting evidence shows that chaos in medical billing is not just affecting our health care but dinging the financial reputation of many Americans: While the bills themselves frequently take months to sort out, medical debts can be reported rapidly to credit agencies, and often without notification. And even small unpaid bills can severely damage credit ratings.

A mortgage initiator in Texas, Rodney Anderson of Supreme Lending, recently looked at the credit records of 5,000 applicants and found that 40 percent had medical debt in collection, with the average around $400; even worse, most applicants were unaware of their debt. Richard Cordray, director of the federal Consumer Financial Protection Bureau, has noted that half of all accounts reported by collection agencies now come from medical bills, and the credit record of one in five Americans is affected.

A single medical bill reported to a credit agency can easily become a “millstone around your neck” said Mark Rukavina, principal at Community Health Advisors, a health care advisory service. He added: “It will take a long time to make that right, even once the bill is paid. I’ve had mortgage brokers call me and say ‘I have these people with great credit. They’ve refinanced before, but now they’ve got this medical bill and even though they’ve paid it off, I can’t get them a good rate.’ ”

Part of the problem is that there are few standards governing medical debts: One billing office might give you — or your insurer — 60 days to pay before pursuing collection. Another might allow you to pay off a bill slowly over a year. Many will sell the debt to collection companies, which typically take a cut of the proceeds and decide when or whether to report unpaid debt to credit agencies.

The problem is accelerating for several reasons. Charges are rising. Insurance policies are requiring more patient outlays in the form of higher deductibles and co-payments. More important, perhaps, is that while doctors’ practices traditionally worked out deals for patients who had trouble paying, today many doctors work for large professionally managed groups and hospital systems whose bills are generated far away, by computer.

Both Congress and the protection bureau have been trying to better insulate patient credit scores from the inefficiencies of our market-based medical system. Various proposals have been considered to differentiate medical debt from other forms; it could be erased once it has been paid off or not reported to credit agencies at all, for example. So far, the credit industry has fought successfully against such efforts, noting that they could allow some genuine scofflaws to evade legitimate charges. But it’s also good business, since health care bills are now the largest source of business for collection companies, according to consumer protection agency officials.

Having spent the last year reporting a series on American health costs, I’ve heard plenty about credit casualties.

Gene Cavallo, 61, a New Mexico businessman who put his children through college, had always paid his bills promptly and had an excellent credit rating, until he required surgical excision of a melanoma on his shin two years ago. The more than 60 bills generated for the surgery and six months of follow-up visits — arriving sporadically and ranging from 18 cents to $17,000 — came to $110,000; his insurance covered about $70,000.

When various providers asked him to pay the remaining $40,000, he requested itemized bills and balked at some of the “ridiculously inflated prices,” such as $85 for tweezers and $20 for a box of tissues. He argued the bills point by point, and ultimately agreed to pay $25,000.
But during the negotiations some of the debt was sent to collection. Two years later, he no longer answers the daily robocalls from collection agencies and has had a couple of credit cards canceled because his score has fallen. “It was a scary thing to do because I own a business and dabble in real estate, so the ability to borrow has always been important to me. And now I have no ability, I assume, to borrow for any reason.”
Michael S., who declined to give his full name so as to protect his reputation with business clients, had to declare bankruptcy in Wisconsin more than five years ago after a fraught year in which his toddler was evaluated for what proved to be a benign neurological condition that required no treatment: “You’d get bills for several different doctors’ groups and for tests and M.R.I.s and you don’t know what they are. I was having trouble figuring out who we owed what. And then, if it goes to collection, then suddenly they’re saying we need this paid now.”

With medical expenses, unlike most other purchases, you generally don’t know the price the hospital will charge in advance. And the subsequent bills and insurance statements — so-called explanations of benefits — are often layered in obfuscation and pressure tactics.

Consider Chris Sullivan of Pennsylvania, whose $2,770 bill for an echocardiogram offered a “prompt payment” discount of 20 percent if he wrote a check within 21 days — meaning a discount for not asking questions on a bill for a test he was told would be under $300.

Another “explanation of benefits” statement notified Joe Cotugno of New York City that his two-day hospital stay for a hip replacement was billed at $99,469.70 (doctors’ fees not included). Cigna paid $68,420.53 after knocking off some $28,000 and requiring Mr. Cotugno to pay $3,018.41. So, it informed him, “You saved 96 percent.” Huh?

The Consumer Financial Protection Bureau has been studying the impact of medical billing on credit scores since 2012, acknowledging that unpaid medical bills in collection “frequently end up on consumer credit reports,” as an outgrowth of “very complex and confusing systems of figuring out who owes what after a medical procedure.” Mr. Cordray, the bureau’s director, said it would take appropriate action if harmful practices were identified.

Bills in Congress that would regulate the practices have been stalled for years. The Medical Debt Relief Act was passed by the House in 2010, but never made it to a Senate vote. After a modified version of the bill failed to pass again last year, another act was recently introduced in the Senate and House.

Meanwhile, patients are right to worry. When Matt Meyer, who owns a saddle-fitting company in New Hampshire, set up a monthly payment plan after some surgery, he was distressed to notice that the invoices came from a debt collector. “I had no idea this was considered debt,” he said, and wondered: “Are they reporting that” to a credit agency?

Good question.

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Americans don’t know what’s in Obamacare, do know they don’t like it

admin

By Sarah Kliff, Washington Post

Fifty percent of Americans now say they oppose the Affordable Care Act. This is the highest number that Kaiser Family Foundation’s poll has seen since October 2011, when Republicans were in the midst of a primary cycle and lots of anti-Obamacare rhetoric was in the air. The easiest explanation for the recent upswing in negative sentiment would be that lots of Americans tried, but failed, to buy insurance through HealthCare.gov. They ran into technical barriers that plagued the site in October and November. But Kaiser’s data don’t really bear out that thesis. There’s actually only been a tiny uptick in the number of Americans who say the health-care law has affected their lives over the past three months. A full 59 percent of Americans still report no personal experience with the law. 

Most Americans don’t know that Obamacare has, at this point, pretty much fully taken effect. When surveyed in January, after the insurance expansion began, 18 percent said they thought “all” or “most” provisions of the Affordable Care Act had been put into place.

There’s lots of confusion, too, about what policies are and aren’t part of the health-care law. Most Americans know there’s a mandate to purchase health insurance. A lot fewer are aware that the law provides financial help for low- to middle-income Americans (the tax subsidies) or gives states the option of expanding Medicaid.

For many Americans – particularly the 68 percent who get coverage through their work, Medicare and Medicaid — the launch of the exchanges probably doesn’t affect their coverage situation. They’ll continue getting insurance in 2014 just the same way they did in 2013. For them, an expansion of Medicaid or an end to the denial of coverage for people with pre-existing conditions isn’t a big change (unless, of course, they lose their current coverage).

So what’s driving the negative opinions of Obamacare? The Kaiser survey does point to one potential culprit: negative news coverage. More Americans say they’ve seen stories about people having bad experiences with the Affordable Care Act than good ones.

Politico’s David Nather had a great line on this recently, in a story about the very high bar for success stories about the Affordable Care Act.

“Here’s the challenge the White House faces in telling Obamacare success stories: Try to picture a headline that says, ‘Obamacare does what it’s supposed to do,’ ” Nather writes. “Somehow, the Obama administration and its allies will have to convince news outlets to run those kinds of stories — and to give the happy newly insured the same kind of attention as the outraged complainers whose health plans were canceled because of the law.”

We don’t have a great sense yet of what type of experience Obamacare’s new enrollees are having — whether they’re disproportionately bad or if the bad stories are just more interesting to cover. But the more negative news coverage does seem to have played some role in the recent uptick in negative opinions about the new law.

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10 Ways to Save on Healthcare

Doug

As health care costs continue to increase, it is extremely important for consumers to scrutinize the charges they receive.  Medical bills are difficult to understand. In fact, 77% of Americans don’t understand health insurance or medical billing. It pays to have a advocate review your bills and negotiate with medical providers on your behalf.  Their experience, available data resources and relationship with providers will save you time and money. Below are 10 ways you can save on healthcare costs.

By Margarett Burnette, Bankrate.com

As health care consumers endure higher deductibles and reduced insurance benefits, it is becoming more important to understand and even negotiate prices before receiving medical treatment.

Dr. Kathryn Stewart, medical director of care management at Mount Sinai Hospital in Chicago, believes that patients can and should be more proactive about seeking the best prices for their services.

“Hospital costs are probably 40 (percent) to 50 percent of what their (list price) charges are,” she says. But when it comes to billing, “most hospitals are happy to break even or have a little bit of profit.”

This means there is plenty of room to negotiate and reduce your out-of-pocket expenses.

Cutting costs

Shop for hospital care as you would any other consumer service, but with more effort since costs can run really high. You can save yourself a bundle using these strategies.

10 ways to reduce your medical bills
 1. Ask your doctor to be your ally
If you’re shopping around for medical services, you probably have a primary physician who directed you to seek the service in the first place. “You have to get diagnosed by somebody,” says Stewart. “So let that person be your advocate.”
She advises patients to ask their doctors where the best hospitals are for the recommended procedures, which centers will work with patients to lower out-of-pocket costs, and to even ask for help communicating with that facility’s finance department.

“If the hospital where a physician admits is approached by that physician on behalf of the patient, I think (the patient) might get somewhere with the hospital. Let’s say I have a patient in my practice who has one of these really high-deductible (insurance) plans, and they need to have a hysterectomy. (I could) approach the finance department and say ‘I’ve got this patient, but they don’t have (enough) insurance and they can’t afford to pay full price, but they can afford to pay something. Can you work with them?'”

2. Compare costs by using the CPT code
Though your doctor might be willing to initiate a conversation with the hospital finance department, you can still expect to have several conversations with them on your own. Before calling, make sure you have the “current procedural terminology,” or CPT, code for the procedure you are seeking.
“CPT is the industry term for the ‘billing code.’ It’s a five-digit number that is used to bill the procedure,” says Jane Cooper, president and CEO of Patient Care, a health advocacy company based in Milwaukee. Cooper says that your physician or physician’s office can provide you with the code, and the number is the same across hospitals. With this code, you can call multiple medical centers to compare prices for the same procedure.

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Tips for Lowering Your Medical Bills

J Roberts

Don’t be intimidated by high medical bills. What patients don’t realize is a review to find errors and working with the provider can often enable you to reduce medical bills. To enhance your outcome, enlist the services of a medical bill negotiation expert. With the help of a professional who can provide data, most providers will negotiate and offer some type of discount on out-of-pocket medical expenses. Here are some excellent tips that every health care consumer should know when faced with large and expensive medical bills.

By Alice Park, Time Magazine Online

It doesn’t happen often, but occasionally you can catch a mistake on a restaurant check or a miscalculated receipt from the grocery store. Hospital bills, however, are another matter: as many as 8 out of 10 bills for health care services contain errors, according to Medical Billing Advocates of America. Since Americans spend nearly $7,000 per capita on health care every year — and since these expenses climb steadily, at an average annual rate of 6.5% — it’s probably worth scrutinizing the remittance from your last hospital visit. It just might save you hundreds, if not thousands, of dollars.

According to medical-billing advocates, who are the health care world’s equivalent of tax-refund specialists, there are ways to protect yourself from huge health care expenditures both before you’re seen by a doctor and after you receive your bill. “When you are in the hospital, you should concentrate on getting better,” says Kevin Flynn, president of HealthCare Associations, a company that helps patients decipher their medical bills. “Do what is best medically first, then worry about the finances second.”

At the emergency room or in the hospital:

If you are insured, ask to be seen by a doctor who participates in your insurance plan. Just because a hospital is considered in-network by your plan doesn’t mean that all the physicians who work there are as well. This may not always be possible, but if your preference is noted in your file, once you receive your bill, you may be able to negotiate with the hospital to accept your insurer’s higher in-network reimbursement rate, leaving you with a smaller financial responsibility, even if you are seen by an out-of-network doctor.

For the same reason, if you are able to, ask to have any lab testing that is sent outside the hospital to be sent to facilities that participate in your insurer’s plan.

If possible, ask about the tests the doctor or nurses are ordering. If a less expensive test can provide the same information, then request that option. In some cases, for example, less expensive ultrasound tests are just as effective as costly CT scans.

Once you get your bill:

Always ask for an itemized bill so you can see every charge.

Ask for an explanation, in writing, from the hospital’s billing department for any disputed charges.

If you go to the hospital at night and end up being admitted after midnight, make sure your charges for the room start on the day you start occupying the room.

Check the level of room for which you were charged. Hospitals charge for ER services by level, depending on the amount of equipment and supplies needed, with Level 1 requiring the fewest (e.g., a nosebleed) and Level 5 representing an emergency (trauma, heart attack). Question the level indicated on your bill and ask for a written explanation of why that level was billed. Hospitals have their own criteria for determining levels and should make this available upon request. “They don’t freely hand this information out, but they will send it to you if you ask for a written response,” says Pat Palmer, founder of Medical Billing Advocates of America.

Doctors also charge for ER services by level, also ranging from 1 to 5. Their levels are standardized, and physicians are required to meet three criteria to justify billing at each level. Question the level listed on your bill and ask for a written explanation of why that level was billed by your physician.

The hospital level should be equal to or lower than that of the doctor-billed level; if it’s higher, that’s a red flag that there may be a billing error.

Question charges for what seem like routine items, such as warm blankets, gloves and lights. These should be included as part of the facility fee.

Question any additional readings of tests or scans. You should be charged only once for one doctor’s reading of a scan, unless it is a second opinion or consultation.

If you received anesthesia, check that you were charged for only one anesthesiologist. Some hospitals use certified registered nurse anesthetists (CRNAs) but require that an anesthesiologist supervise the procedure, so some bills will contain charges from both, which amounts to double billing.

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Affordable Care Act Rate Shock?

Doug

By Kathleen Phalen-Tomaselli,TheStreet.com

Come January 1 of next year, those with the lowest health insurance risk may be hit the hardest with premium increases as high as 40%. “The rules are changing,” says Robert Zirkelbach, vice president of strategic communications for the American Health Insurance Plans (AHIP) in Washington, D.C.

If you are young, healthy and qualify for non-group coverage, you could face rate hikes forcing you to reconsider how you spend your health care dollars. Here’s what’s happening: The Affordable Care Act, aka Obamacare, reaches maturity the first of the year. Designed to tackle the problem of insuring the nation’s estimated 48 million uninsured in addition to increasing benefits for such services maternity care and reproductive aid—all while lowering premium rates for older Americans. But the new provisions come with a price.

And because of new age rating band requirements tied to the ACA, the 18 to 44 age group’s premiums will increase while the over 57 group will decrease. Today, the ratio for age rating bands is 5:1, which means insurers can charge older individuals five times more than younger insureds. Come January 1, the band ratio reduces to 3:1. Take, for example, a 24-year-old who pays $1,200 annually for non-group coverage today could. He could see an overnight increase to $1,800, while a 60-year-old paying $6,000 today will pay $5,400 in 2014, according to the AHIP.
Nonetheless, in the report “Timely Analysis of Immediate Health Policy Issues” published last month by the Urban Institute Health Policy Center in Washington, D.C., lead author Linda J. Blumberg concludes that such predictions are over inflated. Citing government subsidies available to help defray such increases for those earning less than 400% of the federal poverty level, Blumberg says that subsidies will help this age group obtain expanded coverage. Even so, according to the report, “Premiums for 21-to 27-year-olds are $850 lower under (the)5:1 (age band rating) than under (the)3:1 rating.”

The problem with counting on subsidies to defray higher premiums is that, “40% will not be eligible for subsidies,” says Zirkelbach. He goes on to explain that 7.6 million of those in the non-group category in 2011 earned more than 400% of the federal poverty level.

According to an Oliver Wyman study, the cut-off for subsidies is closer to 250% of the federal poverty level—in other words, those earning less than $25,000. There will be no subsidies for individuals earning more than $50,000.

Along with tax subsidies, the ACA calls for the expansion of state Medicaid programs to help those with lower incomes. But, depending on where you live, this may not be an option. The Supreme Court recently ruled that states can decide on whether they will participate. At this point, many states remain undecided with some governors, like Gov. Tom Corbett(R-PA), saying they have no intention of expanding an already stretched program.

To further compound the issue of higher premiums, the health care reform law includes a new $100 billion sales tax on health insurance that will continue to drive up costs. AHIP predicts this increase may be as high as $300 per family.

The Congressional Budget office says the taxes will, “largely be passed through to consumers in the form of higher premiums.” A 2011 Oliver Wyman analysis estimates that this tax alone—not accounting for age rating bands or expanded coverage—will increase premiums over a ten-year period by $2,150 for individuals and an average of $5,080 for families.

Currently, federal and state governments are establishing health care exchanges—much like a one-stop health insurance supermarket—and individuals will be able to select plans starting October 1.

What are your options?

Pay the higher premiums that will also offer you more coverage. Opt-out of coverage and pay the federal uninsured penalty of about $95 in 2014. Or choose a catastrophic plan available for those up to age 27.

What does Zirkelbach hope for? A repeal of the health care tax and a phasing in of the age rating bands. Is there still time to hope? “It’s hard to say,” he says. “Maybe when taking a closer look at this they will re-visit these issues.”

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Same Doctor Visit, Double the Cost

J Roberts

Read about an alarming trend concerning physician practices that will most likely result in greater out of pocket costs to you. Consumers beware; you may pay more for your doctor’s visit than you previously thought. This growing movement is occurring nationwide and is becoming more prevalent as hospitals seek to increase their revenue streams in preparation for the upcoming implementation of the Affordable Care Act.

Insurers Say Rates Can Surge After Hospitals Buy Private Physician Practices; Medicare Spending Rises, Too

Wall Street Journal, August 27, 2012

After David Hubbard underwent a routine echocardiogram at his cardiologist’s office last year, he was surprised to learn that the heart scan cost his insurer $1,605. That was more than four times the $373 it paid when the 61-year-old optometrist from Reno, Nev., had the same procedure at the same office just six months earlier.

“Nothing had changed, it was the same equipment, the same room,” said Dr. Hubbard, who has a high-deductible health plan and had to pay about $1,000 of the larger bill out of his own pocket. “I was very upset.”

But something had changed: his cardiologist’s practice had been bought by Renown Health, a local hospital system. Dr. Hubbard was caught up in a structural shift that is sweeping through health care in the U.S.—hospitals are increasingly acquiring private physician practices.

Hospitals say the acquisitions will make health care more efficient. But the phenomenon, in some cases, also is having another effect: higher prices.

As physicians are subsumed into hospital systems, they can get paid for services at the systems’ rates, which are typically more generous than what insurers pay independent doctors. What’s more, some services that physicians previously performed at independent facilities, such as imaging scans, may start to be billed as hospital outpatient procedures, sometimes more than doubling the cost.

The result is that the same service, even sometimes provided in the same location, can cost more once a practice signs on with a hospital.

Major health insurers say a growing number of rate increases are tied to physician-practice acquisitions. The elevated prices also affect employers, many of which pay for their workers’ coverage. A federal watchdog agency said doctor tie-ups are likely resulting in higher Medicare spending as well, because the program pays more for some services performed in a hospital facility.

Renown said in a statement that cardiologists moving into hospital employment helps “eliminate duplication, improve coordination, and reduce hospitalizations,” and with “more proactive management of patients with heart disease, we are working to improve the health and well being of our patients.”

This year, nearly one-quarter of all specialty physicians who see patients at hospitals are actually employed by the hospitals, according to an estimate from the Advisory Board Co. That is more than four times as many as the 5% in 2000. The equivalent share of primary-care physicians has doubled to about 40% in the same time frame. Traditionally, most doctors who see patients at hospitals are in independent practice.

The structural shift is being driven partly by declining reimbursements for physicians, particularly in certain specialties like cardiology. Doctors are also being pressed to make new investments, such as introducing electronic medical records, and some are attracted to the idea of more regular hours with fewer administrative headaches.

Hospitals say they are bringing in physicians to improve care, integrate services and reduce waste, efforts encouraged by the Obama administration’s federal health-overhaul law. Higher reimbursement is needed in some cases, they say, because it costs more to operate outpatient clinics, which must meet strict regulatory requirements and often treat patients who lack insurance.

“You put a hospital name on something, and the expectations change immediately,” said Richard Umbdenstock, chief executive of the American Hospital Association. Indeed, hospital systems often struggle to break even on their physicians, industry officials said.

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Three Ways to Slash Your Medical Bills

J Roberts

Medical Cost Advocate’s CEO Derek Fitteron was recently interviewed for Fox Business. Read the following BLOG post to learn more about reducing medical costs. Dont forget to negotiate your medical bills and save money. It’s worth the effort. In these difficult economic times, why pay list price when you may be able to save.

By: Donna Fuscaldo

FOXBusiness

Published July 10, 2012

Many things in life are negotiable, including medical bills.

“More and more billing offices, whether it’s a hospital or doctor’s office, are much more receptive to bargaining,” says Nancy Fase Guernon, director of operations at CareCounsel, an health advocacy firm. “There’s definitely ways to negotiate the bill.”

 According to a survey of Angie’s List members who asked for discounts from their doctors, 74% said they were successful. “We’ve heard some great success stories from members who have successfully negotiated with their health care provider,” says Angie Hicks, founder of the peer-review website. “It doesn’t hurt to ask. You’ll be amazed at what you can save and still get great care.”

 From making sure your bill is correct to negotiating ahead of a procedure there are ways to get as much as 40% off your medical bill. Here’s how:

Step One: Check the accuracy of the bill

Medical billing mistakes are common, so review the invoice carefully before submitting payment.  Experts say it’s common for a procedure to be coded wrong by the doctor’s office and lead to excess charges.

 Patients should review their health insurance plan to know what is and is not covered. “You want to make sure if it’s the insurance company’s responsibility to pay it, it’s paying what it should according to the plan,” says Fase Guernon.

 If you don’t have insurance or are going out of network and are paying out of pocket, Derek Fitteron, founder and CEO of Medical Cost Advocate, advises getting a full cost estimate of the procedure upfront to avoid any surprises at the end and you avoid getting overcharged.

 Fitteron also suggests asking for an itemized bill so you can review the charge for every procedure. “Sometimes there are mistakes and those mistakes might include bills for the wrong procedures or procedures that didn’t happen.”

 Step Two: Negotiate Up Front

Think of negotiating health care like shopping for a car. A dealership wants your business and will working with you—same idea applies to a doctor. For instance, many times doctors will reduce their price if you pay in cash or pay for the procedure ahead of time.

 According to Hicks, some hospitals and doctors will cut a health-care bill by as much as 50% if you pay in cash on the day of service. “We had a member from Washington D.C. who saved $9,000 on his mother’s in-home care by bargaining ahead of her treatment.”

 To negotiate ahead of time, experts say it pays to do your homework. Procedure prices vary be region, so know what know what is common in your area before negotiating. “Do the research so you are not throwing out numbers. That can be insulting,” says Fitteron.

 Step Three: Be honest about your financial situation

 If you get hit with a medical bill that you can’t afford, the best thing to do is call your doctor or hospital and honestly explain your financial situation. Often times the medical facility will be willing to reduce the bill as long as you agree to pay something.

 “If you ask the billing office for a discount and you are willing to pay something right then more times than not they will knock down the bill 30% to 40%,” says Fase Guernon.

 Some providers will set up interest-free payment plans. Hicks points to one member who saved $4,000 by talking to her doctor about her financial concerns. The member couldn’t afford the costs that weren’t covered by the insurer so the doctor agreed to collect just the insurance portion, she says.

 “Too many consumers aren’t aware of just how much power they have to negotiate their health-care costs. There are many great doctors, dentists and other health-care specialists out there who are willing and eager to work with their patients to provide them with high quality, affordable care,” says Hicks.

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Healthcare Costs Top $20K Per Family

J Roberts

Here’s some more discouraging news: Healthcare for a family of four now costs as much as small family sedan. For many consumers the price to pay is too much. Even employers are grappling with rise in costs as they struggle to provide healthcare benefits to employees. Read the below article to learn just how much the cost of healthcare has risen in the past few years.

 

Margaret Dick Tocknell, for HealthLeaders Media , May 16, 2012

The national annual cost of medical care for a typical family of four with PPO coverage has edged up over $20,000 for the first time, according to the actuarial and consulting firm, Milliman.

The 2012 Milliman Medical Index estimates the annual cost at $20,728. That’s a record $1,335 increase in the total cost of care compared with 2011, and the first time the cost has notched above the $20K mark since Milliman started reporting on these costs twelve years ago. Through a combination of copayments, deductions, and premiums, the prototypical family of four will be responsible for a record share—42%—of its medical costs.

A combination of factors is driving the increase, including the comparative lack of control insurers exert on outpatients costs, a slowdown in hospital bed utilization, and the cost of technology in patient care, explains Chris Girod, principal and consulting actuary in Milliman’s San Diego office and a co-author of the report.

The good news? The pace of the increase is slowing. The 6.9% increase in total costs is the lowest annual rate of increase in more than a decade.

The MMI is comprised of five components: inpatient facility care, outpatient facility care, physician services, pharmacy, and miscellaneous other.

Among the MMI findings:

Outpatient facility costs posted its first single digit increase, 8.6%, in four years, but for the fifth year that increase outpaced all the other MMI components.

Outpatient facility care costs totaled $3,699, or 18% of a family of four’s annual healthcare bill. Girod explains that the level of insurer control is improving under contractual discount arrangements, but still isn’t on par with inpatient controls.

Inpatient facility utilization or the number of inpatient days for a covered population in a year has remained unchanged for several years. However, the patients who are hospitalized tend to require more intensive and expensive services that have helped boost the cost of treatment contributing to a 7.6% increase in the average charge per day costs.

Physician care costs reversed a four-year trend and increased by 5%. Girod says a number of things may have contributed to this cost bump, including evidence of some pushback by physicians in their contract negotiations with health plans.

Hospital inpatient costs ($6,531) and physician costs ($6,647) each account for 32% of a family of four’s total annual healthcare bill.

Pharmacy costs continued their roller coaster ride of cost increases and exceeded $3,000 for the first time. The 7.3% increase is down slightly from 2011’s 8%, but a significant increase over 2010’s 6%. Pharmacy costs totaled $3,056 or 15% of the family’s total annual healthcare bill. Girod says that while the shift to generics has helped slowed the growth in pharmacy costs, the expense of specialty drugs will have a growing impact on this cost trend.

The cost of miscellaneous other services such as durable medical equipment, ambulance services and home health posted a 6.7% increase to $795.

In addition to looking at costs on a nationwide basis, for the last five years the Index has looked at comparative healthcare costs in the same 14 cities across the country, including Chicago, Denver, and Los Angeles.

With a current annual cost of $24,965, Miami has topped the list for five years. Girod explains that Miami has a large number of healthcare practitioners and capacity helps drive the demand for healthcare services. Also, the practice of defensive medicine is more prevalent in the Miami area.

Phoenix was the least expensive with a cost of $18,365 for a family of four.

For the 2012 study, healthcare costs in 11 of the 14 cities exceeded $20,000 annually for a typical family of four. In 2011 only six of the 14 cities posted costs in excess of $20,000. While that could suggest an easing in the geographic differences in the cost of healthcare, Girod says a more likely explanation is that “the entire scale is shifting up, both at the bottom and the top, so we just ended up with more cities over that $20,000 threshold.”

The report notes that so far the Patient Protection and Affordable Care Act has had “only a limited effect on total healthcare costs for the illustrative family of four.”

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Insurance companies to blame for ‘surprise’ medical bills: state report

J Roberts

Are you paying more for healthcare even when using an in-network provider? A recent report from the Department of Financial Services in New York State found that an alarming amount of consumers are faced with a greater out-of-pocket expense as insurers and providers are shifting the cost of care to them.

Greg B. Smith / NEW YORK DAILY NEWS

Big insurance companies and some greedy doctors are to blame for the growing number of New Yorkers whacked with “surprise” medical bills, a state inquiry has found.

Department of Financial Services Superintendent Benjamin Lawsky Wednesday released the results of his probe into the unanticipated bills that are slamming consumers.

“Simply put, surprise medical bills are causing some consumers to go broke,” the report states.

The Daily News has highlighted this problem with a series of stories over the last two months. Lawsky promised to push for reforms.

“Every time I have mentioned this issue to a crowd of people, I see nodding heads,” he said. “If that’s happening, it is a huge issue.”

His agency reviewed 2,000 complaints from 2011 and surveyed the 11 big insurers and HMOs who cover 95% of the New Yorkers who have health insurance.

The review found that patients who went out of their way to make sure the non-emergency treatment they sought was covered by their plan still wound up with bills from specialists — such as assistant surgeons, anesthesiologists and radiologists — who were outside their plan.

That’s because insurers often don’t make clear who will be involved and how much it will cost, the report found.

One patient who complained to the Financial Services department made sure to go to an in-network hospital for brain surgery but wound up with a surgeon who wasn’t in his plan. The surgeon billed him $40,091 and the insurer covered only $8,386 – leaving him to cough up $31,704.

Sherry Tomasky, advocacy director of the American Cancer Society, praised the report and criticized the “undue financial burdens that are often placed on (patients) at a time when they are least able to handle it – both financially and emotionally.”

DFS quoted ridiculously complex language one insurer cited in claiming it met its disclosure requirements: “reimbursement is based on a percentile of national prevailing charge data compiled for a specific procedure and adjusted for geographic differences.”

“Unfortunately, language such as this does not provide consumers with meaningful information,” the department wrote.

The review also documented complaints that a “small but significant number” of doctors “appear to take advantage of the fact that emergency care must be delivered” by inflating bills for treatment that’s not covered.

The survey found out-of-pocket costs for out-of-network radiology or x-ray services during emergency care averaged $2,910; for anesthesiology it was $1,794.

The Health Plan Association, the lobby group representing insurers, praised the report for shining a light on excessive bills by doctors for ER care.

“These egregious practices contribute to the rising cost of health insurance for New Yorkers,” Paul F. Macielak, HPA president, said.

The report also noted that insurers have been reducing coverage for out-of-network care and making it tougher to file claims.



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Medical Debts Put Patients at Risk of Financial Collapse

Doug

The crisis of American health care is not limited to uninsured people, unable to pay for their care. This article shows a deepening problem of working people with insurance unable to pay for treatment of serious illnesses.

By Lindy Washburn – The Bergen Record
First Posted: January 27, 2012

HACKENSACK, N.J. — Frances Giordano found out she had lung cancer in June. After that, the bad news just kept coming.
First, she discovered that even with a good job and health insurance, her medical expenses were more than she could afford on disability.

Then she started slipping into debt, like millions of other Americans who don’t have the cash to cover their medical bills. Hospitals expect to be paid promptly and offer little leeway to insured patients. Unpaid bills go to collection agencies, damaging a person’s credit history for years.

Finally, she learned that fighting for her life was not her only battle or maybe even her toughest. When she finished her chemotherapy in December, she was fired. “Due to changes in business operations,” wrote her employer of more than six years, “We can no longer hold your position open.”

It arrived nine days before Christmas.

“I’m a good person,” the 58-year-old Giordano said in an interview, crying. “I worked hard. Isn’t having cancer enough?”
The crisis in American health care is not limited to hospital emergency rooms where uninsured people wait for care. It also is found in a neat, three-bedroom house in Dumont, N.J., occupied by a widow who worked full time, raised two kids and likes to get her nails done occasionally.

In less than a year, Giordano lost her health and her job. Now, she’s afraid she’ll lose her good credit and her health coverage.

In the lonely hours of the night, she said she thinks about giving up.

Giordano had health insurance throughout her illness. She didn’t have to beg for treatment and was not denied it. She loves the surgeon and oncologist and nurses whose care, she hopes, will give her many more good days with her first grandchild, born in July.

But she may be ruined financially. In this country, people can go broke if they get sick.

(more…)

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