Insurers Alter Cost Formula, and Patients Pay More

J Roberts

Beware of even greater out-of-pocket healthcare costs. Read the following article and learn how insurers are shifting the cost of out-of-network care to consumers.

Doug Benz / The New York Times

Despite a landmark settlement that was expected to increase coverage for out-of-network care, the nation’s largest health insurers have been switching to a new payment method that in most cases significantly increases the cost to the patient.

Jennifer C. Jaff, founder of Advocacy for Patients with Chronic Illness. She has Crohn’s disease.

The settlement, reached in 2009, followed New York State’s accusation that the companies  manipulated data they used to price such care, shortchanging the nation’s patients by hundreds of millions of dollars.

The agreement required the companies to finance an objective database of doctors’ fees that patients and insurers nationally could rely on. Gov. Andrew M. Cuomo, then the attorney general, said it would increase reimbursements by as much as 28 percent.

It has not turned out that way. Though the settlement required the companies to underwrite the new database with $95 million, it did not obligate them to use it. So by the time the database was finally up and running last year, the same companies, across the country, were rapidly shifting to another calculation method, based on Medicare rates, that usually reduces reimbursement substantially.

“It’s deplorable,” said Chad Glaser, a sales manager for a seafood company near Buffalo, who learned that he was facing hundreds of dollars more in out-of-pocket costs for his son’s checkups with a specialist who had performed a lifesaving liver transplant. “I could get balance-billed hundreds of thousands of dollars, and I have no protection.”

Insurance companies defend the shift toward Medicare-based rates under the settlement, which allowed any clear, objective method of calculating reimbursement. They say that premiums would be even costlier if reimbursements were more generous, and that exorbitant doctors’ fees are largely to blame.

But few dispute that as the nation debates an overhaul aimed at insuring everybody, the new realpolitik of reimbursement is leaving millions of insured families more vulnerable to catastrophic medical bills, even though they are paying higher premiums, co-payments and deductibles.

“They’re not getting what they think they’re paying for,” said Benjamin M. Lawsky, the superintendent of the New York State Department of Financial Services, whose investigators recently found that under the switch, 4.7 million New York State residents — 76 percent of those with out-of-network coverage — are facing reimbursement reductions of 50 percent or more.

The switch “certainly creates the appearance that insurers are trying to end-run the settlement and keep out-of-network payments low,” Mr. Lawsky said.

Mr. Lawsky, who worked for Mr. Cuomo when he was attorney general, is seeking legislation in New York State to require that minimum reimbursements be linked to the new database, known as Fair Health. (more…)

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Health care mandate is about personal responsibility

J Roberts

Is ObamaCare dead? The decision lies with the Supreme Court which is expected to rule sometime in June. Onething is for certain, the current model of paying for and subsidizing healthcare can not remain. Whether the law is repealed or not, the current system has to change. This, all of us can agree on.

Issac J.Bailey | The Myrtle Beach Sun

“Now, it is as plain as the spectacles on Antonin Scalia’s nose that opting out of the health-care market is about as realistic as opting out of dying.” – John Cassidy of the New Yorker.

Following the debate over the Affordable Care Act has reminded me of that old saw, everybody wants to get to heaven but nobody wants to die.

The public doesn’t want private insurance companies to be able to throw people off their rolls for the sin of getting too sick, or for denying them coverage because of a pre-existing condition, something they will no longer be able to do under the Affordable Care Act come 2014.

The public wants to keep in place the Reagan-era federal law that compels emergency rooms to treat whoever shows up, no matter if that person has not a dime to his name and won’t pay no matter how many harassing phone calls bill collectors make to their home.

But the public doesn’t want to be compelled to pay for those rights.

According to a variety of studies, from the independent Congressional scorekeeper the Congressional Budget Office to independent health care industry analysts, those with insurance are subsidizing those without to the tune of maybe $43 billion every year.

The annual premiums for those with health insurance are roughly $1,000 higher to make up for the unpaid bills of the uninsured.

According to the National Coalition on Healthcare, hospitals lose about $34 billion a year providing unpaid for care – services they are required to render because of federal law dating back to 1986. The group also said that “private insurance and some public payers pay an additional $37 billion on behalf of those with no insurance.”

What’s worse is that this is probably the least efficient, most wasteful way to operate the world’s most expensive health care system.

Justice Antonin Scalia alluded to it during this week’s debate when he said that one way to solve the problem would be to simply allow insurance companies the to right to throw sick patients off their rolls.

In fact, it is. Another way to solve the problem is to no longer guarantee access to emergency medical care, meaning that if you get into a car accident and can’t speak and your insurance card isn’t visible – or you don’t have insurance – medical officials should be able to deny you care, no matter how urgently you need it.

That’ll learn Americans who are not responsible enough to either purchase insurance without being compelled or have their insurance information tattooed to their forehead in case of an emergency. (Of course, if you suffer an ugly head trauma, that tattoo wouldn’t do any good.)

The Affordable Care Act has already done a variety of things, including slowing the rise in health care costs, convincing more medical institutions to go to a pay-for-quality rather than pay-for-quantity of care model, saving seniors tens of billions of dollars in drug costs and uncovering billions of dollars in fraud.

Because it has become a political lightning rod, all of those things and the contradictions being made by opponents are being overshadowed.

Conservatives have long claimed that they are the party of personal responsibility, yet conservatives have joined with a sizable number of liberals in opposition to the individual mandate, which will require everyone above a certain age who can afford it to buy health insurance.

The individual mandate is designed to make sure as many Americans as possible are paying into a system for which each of us is benefitting, to defray some of that $43 billion bill of annual uncompensated services, to assure that the insured no longer have to pay an extra $1,000 a year to pay for the uninsured.

If not the individual mandate, then something needs to be implemented that will accomplish the same goal – something those same conservatives seem to not want to do.

Or, we can take Justice Scalia’s advice and repeal all federal laws that compel medical officials to provide services to people who can’t pay for them, emergency or not.

The problem we’ve long had with balancing our books is that we too frequently demand things for which we don’t want to pay.

The individual mandate is unpopular largely because it threatens to shift that paradigm.

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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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Medical Bill Problems Steady for U.S. Families, 2007-2010

Doug 1 Comment

Troubling stats indicate 20% of Americans are still having difficulty paying medical bills.

By Anna Sommers and Peter J. Cunningham

More than one in five Americans were in families reporting problems paying medical bills in 2010—about the same proportion as in 2007,according to a new national study by the Center for Studying Health System Change (HSC).
Given the severe 2007-09 recession, the sluggish economic recovery and health care costs continuing to increase faster than incomes, it is somewhat surprising that the rate of medical bill problems did not increase between 2007 and 2010.
The steady rate of medical bill problems may be a byproduct of decreased use of medical care—both by people who lost jobs and health insurance during the recession and others who cut back on medical care in the face of uncertain economictimes. While problems paying medical bills stabilized in recent years, the proportion of Americans in families with medical bill problems remained significantly higher in 2010 compared with 2003—20.9 percent vs. 15.1 percent. And, in 2010, many people in families with problems paying medical bills continued to experience severe financial consequences, with about two-thirds reporting problems paying for other necessities and a quarter considering bankruptcy.

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The Future of U.S. Health Care

Doug

What Is a Hospital? An Insurer? Even a Doctor? All the Lines in the Industry Are Starting to Blur.

By ANNA WILDE MATHEWS

Call it the united state of health care.

Amid enormous pressure to cut costs, improve care and prepare for changes tied to the federal health-care overhaul, major players in the industry are staking out new ground, often blurring the lines between businesses that have traditionally been separate.

Hospitals are bulking up into huge systems, merging with one another and building extensive new doctor work forces. They are exploring insurance-like setups, including direct approaches to employers that cut out the health-plan middleman.

On the other side, insurers are buying health-care providers, or seeking to work with them on new cooperative deals and payment models that share the risks of health coverage. And employers are starting to take a far more active role in their workers’ care.

Such shifts have been gathering force for a while, but the economic downturn has accelerated the push for efficiency. The federal legislation, which creates new health-insurance marketplaces and requires most people to carry coverage, may unleash additional demand for health care once it fully takes effect in 2014. Even if the Supreme Court unwinds part of the law, the changes occurring now aren’t likely to stop because the pressure to reduce the price of health coverage won’t go away.

It Has All Been Tried Before, Experts Warn
(more…)

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Aetna sues 9 N.J. doctors for “unconscionable” fees

J Roberts

Lawsuits claim that the out-of-network physicians charged as much as $50,000 for an inpatient consultation.

By Alicia Gallegos,

American Medical News

Aetna Inc. has accused nine New Jersey doctors of charging excessive fees for out-of-network services. Four are countersuing, alleging that the insurer is guilty of fraudulent billing practices.

The lawsuits are the latest development in a debate among insurers and health care professionals over “usual, customary and reasonable” rates for out-of-network doctors.

Aetna sued the physicians between July and November 2010, claiming that they had charged “unconscionable” fees for services and threatened to balance-bill patients if not paid.

Cardiologist Benjamin Hannallah, MD, of Watchung, N.J., charged up to $48,980 for an inpatient consultation in 2009, an increase of more than $47,000 from his 2007 rate, according to one of the lawsuits. The average Medicare charge for an inpatient consultation is $358.12, according to 2010 data from the Centers for Medicare & Medicaid Services.

Cardiologist Karan Nejad, MD, of Hackensack, N.J., raised his fee for seeing critically ill hospital patients from $2,040 in 2007 to $15,000 in 2008, another lawsuit claims. The average charge for the first hour of a critical care visit is $520.76, according to CMS data.

Gynecologist-obstetrician Waleed Abdelghani, MD, of Hackensack, who assisted in two cesarean sections, allegedly charged $30,000 for each surgery, while in-network surgeons were paid about $2,000 for the same procedure, Aetna said. Standard pay for a surgeon assisting a C-section is $1,400, Aetna spokeswoman Cynthia Michener said.

“These were just outrageous bills,” she said. “We are hoping to develop some case law here that there is such a thing as an outrageous fee.”

The sued physicians treated patients at hospitals in Aetna’s network. The patients had no knowledge they were being treated by out-of-network doctors, Michener said.

Attorneys for the doctors denied Aetna’s allegations and maintained the fee rates were reasonable. Aetna has taken the charges out of context and made much of simple clerical errors, said Robert J. Conroy, attorney for Drs. Hannallah and Nejad.

“Their case is built on half-truths, innuendo and omissions of material facts,” he said.

Aetna is attempting to establish regulations on out-of-network fees through the courts because of its failure to do so legislatively, said George Frino, attorney for interventional cardiologist Deepak Srinivasan, MD, of Hackensack, one of the defendants.

“[Dr. Srinivasan] was shocked and appalled that an insurance carrier would claim fraudulent billing activities when, for years, his invoices were processed in due course, and no complaint was ever made by Aetna,” Frino said. “In our mind, this is a gross misuse and abuse of the judicial system.”

Between November 2010 and March, four physicians, including Dr. Srinivasan, countersued Aetna. They allege deceptive billing practices and racketeering, among other claims. Aetna denies the allegations and has asked a judge to dismiss the suits.

Most out-of-network physicians practice fair billing, Michener said. Only a handful take financial advantage of hospital patients, she said.

Aetna plans to review similar billing patterns in other states to identify doctors who are potentially billing excessively.

“Some doctors who used to be in-network realized they could go out-of-network and raise fees because they had a captive patient base in the hospital,” she said.

Billing system at odds

Insurers and physicians have fought in court elsewhere over acceptable UCR rates.

In 2000, the Litigation Center of the American Medical Association and State Medical Societies sued Aetna, UnitedHealth Group and several others over a database used to determine fees for out-of-network care. The Litigation Center said the system for years had been using flawed data to set the rates.

The suits triggered an investigation by Andrew Cuomo, then New York attorney general. In 2009, UnitedHealth Group reached a $350 million settlement.

As part of a separate settlement with Cuomo’s office, large health insurers operating in New York agreed to stop using the data. None of the companies that settled admitted wrongdoing. Cases against Aetna, Cigna and WellPoint are pending.

Ingenix, a subsidiary of UnitedHealth Group, which sold the database at the center of the Cuomo agreements, is now known as OptumInsight.

A database created by FAIR Health, an independent nonprofit, was launched in January. Database officials expect to send payments based on the new figures to physicians by the summer.

American Medical Association President Cecil B. Wilson, MD, said the AMA supports more transparency in the out-of-network billing system.

“The AMA does not condone excessive fees for medical care and encourages physicians and patients to discuss costs before medical services are provided,” he said.

Also named in Aetna’s lawsuits are: internist Magdy Wahba, MD, of Paterson, N.J.; neurological surgeons, David Estin, MD, Jonathan Lustgarten, MD, and Ty James Olson, MD, all of Ridgewood, N.J.; and obstetrician-gynecologist Azer Alizade, MD, of Hackensack, N.J. Aetna also listed several “John Does” in the suits to allow for more defendants if their involvement later becomes clear.

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NJ lawmakers seeking to control insurance costs

J Roberts

Looking for greater transparency on how insurers calculate and charge for premiums? The state of NJ is intending to provide just that. A recent measure adopted by the state legislature would require all insurers to gain approval by the state’s regulatory agency before they can raise premiums.

THE ASSOCIATED PRESS

TRENTON  — Health insurance carriers who serve individuals and small businesses in New Jersey may soon have to gain state approval before implementing rate increases.

These firms currently can set and increase rates just by filing the information with the state. But a measure planned by three state lawmakers would require that the firms gain approval for such actions from the state Department of Banking and Insurance.

It also would expand the jurisdiction of the state’s Division of Rate Counsel, which now has no say over health insurance rates, to create a watchdog for residents and small businesses.

“Residents deserve a watchdog, someone with the knowledge to advocate on their behalf when it comes to the complicated issue of rising health care premiums,” said Assemblyman Dan Benson, D-Hamilton Township (Mercer County), who said he will sponsor the measure with fellow Democrat Valerie Vainieri Huttle of Englewood.

Democratic Senate Majority Leader Barbara Buono plans to sponsor identical legislation, with both measures likely to be introduced by year’s end.

“This legislation will provide far greater transparency,” Benson said.

Ed Rogan, spokesman for the banking and insurance department, declined to comment on the proposal. As a matter of policy, the department does not discuss proposed or pending legislation.

Besides requiring the banking and insurance department commissioner to approve any rate increase, the proposed bill also would give the commissioner authority to reject proposed rate changes deemed discriminatory or excessive.

The commissioner and rate counsel would also have to jointly hold public hearings on any proposed premium increases for insurance contracts or policies in the Individual Health Coverage Program or New Jersey Small Employers Health Benefits Program market.

Information about premium increases, including an explanation of how carriers report and calculate health insurance premiums, also would have to be posted on the department’s website.

Currently, insurers in these plans are required to spend no more than 20 percent of the premiums paid on administrative expenses.

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Sixteen percent of Americans unable to pay medical bills, according to Consumer Reports’ Trouble Tracker Index

admin

Medical Cost Advocate recently appeared in the September issue of Consumer Reports. One of the key points of this article is the assertion that consumers should line up a medical billing advocate or their own alternatives proactively. Don’t wait until its too late to do your research and find a health care negotiator.

Consumer Reports: How to Haggle With Your Doctor or Hospital

YONKERS, NY — When we visit our doctors, we don’t typically think of ourselves as “consumers” or buyers of health care, but in these tough times, that is precisely the role a patient needs to play to avoid drowning in a sea of medical bills. What are the best strategies for haggling with your doctor or hospital? A new report in the October issue of Consumer Reports and online at www.ConsumerReportsHealth.org features advice from Consumer Reports’ medical expert and M.D., John Santa.

According to the latest Consumer Reports Index, which gauges the health of the economy from the consumer perspective, 16.3 percent of Americans are unable to afford medical bills.

“Americans are overwhelmed by health costs and many people simply can’t pay their bills, can’t afford their medications,” says John Santa, M.D., M.P.H., director of the Consumer Reports Health Ratings Center. “The last thing most patients want to do is haggle with their doctors, but a little bit of negotiating can go a long way. It’s also important to know that there are tremendous variations in health care costs—knowing this can help a consumer get a hand up and politely insist on the fairest possible price.”

Here’s Consumer Reports’ advice for three possible scenarios:

You’re healthy.The optimal time for patients to talk with their healthcare providers about costs is before any have been incurred. While doctors have a professional obligation to take a patient’s financial resources into account, patients should raise the issue with their doctors to let them know that costs are important to them. “For a variety of reasons, doctors are likely to suggest the most expensive options first. But you might be surprised by your doctor’s willingness to change course, for example prescribing fewer expensive brand name drugs or choosing watchful waiting over a costly diagnostic test,” says Santa.

The unexpected occurs. A patient lands in the hospital without the benefit of any planning and gets slammed with a huge bill, say $15,000 for a coronary angiogram, and insurance ends up covering only a fraction of the bill. Consumer Reports recommends these approaches to get the greatest reduction to their bill:

  • Sit down with the doctor who ordered or performed the hospital services to find out how the hospital costs ran so high. Were all the services needed and reasonably priced? Consumers can judge for themselves by checking www.healthcarebluebook.com which lists the going rates for many medical services for free. Closely examine each bill to identify errors, which are common.
  • Consumers should not assume the price on their bill is set in stone. Providers often discount rates substantially to insurers and others, so why shouldn’t a consumer ask for the same rate reduction? Consumers should dispute any charges they think their insurance company ought to cover.
  • Patients should not pay their bill until they have exhausted all of their options, but they should make clear to the hospital’s billing department that reaching a resolution is important to them. They might consider making a discounted offer they think would be manageable within a set time period. Consumers can consult one of the reputable groups that, for a fee, can help reduce the size of medical bills, such as Medical Cost Advocate (localhost/wp1).

You’re having an elective surgery. This situation allows for more planning and research into the best procedure, doctor, hospital, drug or other option. “Use your time wisely to do the research because variations in health-care costs can be significant, and providers will gladly let you overpay for a service that you could get for less,” says Santa. Keep in mind the following advice:

  • Consumers should shop around, talk to different providers, and bargain for what they think is a fair price.
  • Consumers shouldn’t hesitate to ask for the price upfront and get it in writing. Request an itemized list of all potential charges.
  • As with any purchase, consumers should beware of any offer that sounds too good to be true. If a provider suggests a shortcut, be wary and ask a lot of questions, and check out providers that are unfamiliar.

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How the seemingly largest hospital bill came to be

J Roberts

Read about the world’s largest healthcare bill.

By Karen M. Cheung

It may be the largest hospital bill ever. Estimated at $9.2 million, including interest, the bill is from Tampa (Fla.) General Hospital for the care of deceased Tameka Jaqway Campwell.

Although the American Hospital Association, the Health Care Financial Management Association, and even the Guinness Book of Records couldn’t confirm the highest hospital bill in history, according to Associated Press (AP), the $9.2 million in charges for one patient certainly draws questions into high healthcare costs and end-of-life decision making.

Campwell had an incurable disease, progressive demyelinating neuropathy. The patient’s mother Holly Bennett accused the hospital of not feeding her daughter and giving her too much morphine, which, she claimed, resulted in the patient’s weight falling to 37 pounds, reports the AP. Campwell died two years ago.

The hospital is suing the patient’s estate for the outstanding bill.

“If they think they’re getting money from me, they’re crazy,” Bennett said in the article. “Who’s ever even heard of a bill that high?”

Although the hospital charges will likely drop to $2.25 million after readjustments, Bennett told ABC News she would not pay the multimillion-dollar bill. She said that she never received an itemized bill during the five years of treatment and that the lawsuit is a strategy to prevent her from filing her own lawsuit for medical malpractice against the hospital.

A frequent complaint from patients and providers alike, patients often do not understand the associated costs for tests and care with no clear prices for services.

“This is tragic,” said Alan Sager, a professor of health policy and management at Boston University School of Public Health, in the ABC article. “A patient apparently received costly care that might have made her more comfortable–and might have slowed the progression of her illness, but these interventions apparently could do little more than slow a steep decline.”

Hospital palliative care has doubled in the past decade, ranking as one of the fastest growing specialties with 63 percent of U.S. hospitals using palliative programs. According to a Center to Advance Palliative Care report this month, there are 1,568 palliative teams at nationwide hospitals, up from just 658 in 2000.

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