2011 > October

Monthly Archives: October 2011

How To Deal With Big Medical Bills

This post was originally published on Mint.com.

Medical debt is an increasing problem in America. More than 25% of people under 65 report having some medical debt (an all-time high). Even people with insurance report having problems paying medical bills.  So what do you do when you just don’t have the money to pay-off your recent hospital stay?

Before you panic, try these steps:

Check things out: A shocking number of medical bills contain errors (estimates suggest anywhere from 30%  to 80% of bills). If something doesn’t look right, it’s worth investigating. Some errors are easy to spot, such as staying in the hospital two nights but being billed for three. Or, you may have been billed twice for the same thing. But most errors are not obvious; for complex situations, you might consider hiring a medical billing expert to review your bills. But for single bills, these services can be expensive. You may first want to see what consumer assistance your state’s Department of Insurance offers – they may offer or be able to direct you to free or low cost help.

Call your provider: If you do find an error in the bill, call the doctor or hospital and explain what is wrong. Ask them to resubmit the bill to your insurance company.

Call your insurance plan: If your provider is unable to help, or if the mistake belongs to the insurance company, call your plan and ask them to make the correction. Be sure to record the name of the person you talked to, what they promise to do, and how to get a hold of them again. If the plan says they cannot help you and you still believe the bill is incorrect, file a formal complaint (or grievance) with the plan. If this still does not change your bill, you can file an appeal.

Negotiate with your provider: If the bill is in fact correct, talk to the doctor or hospital about discounts, financial assistance policies, or payment plans.  If you want to negotiate something specific over your bill, it may help to ask your provider for an itemized bill so you can see individual charges.

Find a foundation: If you have a chronic or rare disease, there may be a foundation or financial assistance program specifically designed to help with yourmedical bills. Depending on your particulars (such as age, health condition, or insurance status) these foundations can help with co-pays, co-insurance, drug costs, and more – sometimes up to a year back. Be aware of the funding timelines; for example, some give out assistance by the calendar year, so you may have better luck earlier in the year. Some foundations to try:

Cancer Care Co-Payment Assistance Foundation: www.cancercarecopay.org

Caring Voices Coalition: www.caringvoice.org

Chronic Disease Fund: www.cdfund.org

Healthwell Foundation: www.healthwellfoundation.org

National Organization for Rare Disorders: www.rarediseases.org

Partnership for Prescription Assistance: www.pparx.org

Patient Access Network Foundation: www.panfoundation.org

Patient Advocate Foundation:  www.copays.org

Patient Services Incorporated: www.patientservicesinc.org

Get help from friends and family: If you still can’t get the money together, then try getting the word out.  Fundraising platforms like GiveForward make it easy to create and publicize campaigns to help a friend or family member who needs money for medical expenses.

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Eating Our Wallet: Healthcare Spending Drives GDP Growth

Buoyed by strong consumer spending and increasing business investment, the US economy expanded at an annual rate of 2.5% in the third quarter of 2011; however the economic expansion was driven mainly by expenses on medical bills and utilities.

Gluskin Sheff’s David Rosenberg writes,

We can understand why consumer confidence has sunk to cycle lows when spending on essentials such as utilities and medical bills have to be funded by drawing down the personal savings rate. It is a sad state of affairs.

From the Wall Street Journal

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Why Are Medical Bills So High? Hear It From The Doctor’s Mouth

For pretty much anything you can think to spend money on in America, you figure out exactly how much you’re going to pay before you pay it.  In some cases, as in a restaurant, you see the prices up front and make your choices accordingly.  For something more variable, like a car repair, a mechanic will take a look, tell you what needs to happen, and give you the cost of each item for you to approve ahead of time.

And then there’s a trip to the doctor’s office.

This system, as anyone who has experienced it knows, works like nothing else.  You go the doctor, get some tests and consultation, show someone your insurance card, and away you go home.  And then days or even weeks later, you get something from your insurance company that tells you what the doctor charged you and what they are covering.  Some more days and weeks after that, you get the final bill from the doctor.  Typically, this thing from the insurance company is the first thing you’ll hear about how much your visit cost—weeks after it happened.  Frankly, it’s just a crazy system.

And of course one of the mysteries is on the front side of the whole thing: why do providers charge what they do?  Can it really cost hundreds of dollars to have someone look in your throat for a couple of minutes or take a vial of blood from you?

So this blog post by Dr. Daniela Carusi is very illuminating:

I work for a large health care system in a metropolitan area. I am well aware that the amount we charge for services is far higher than the amount we collect from payers. In fact, government payers will often pay 25 cents on the dollar, while private insurance companies will pay more. Still, we rarely receive more than 50 percent of what we charge….

…This is why cost transparency in health care is so difficult. We can’t predict what the final negotiated payment will be without knowing who is paying and what kind of bargaining position that person is in. And no one had taught the individual consumer the rules of the game. Physicians may be criticized for not knowing the costs of the services we order, but there simply is no straightforward answer.

So one big reason initial prices are so high is because insurers are going to bargain them right down again.  But of course, as she points out, this system falls hardest on people who are uninsured and have no one to bargain for them, because they are handed a bill with the full high price on it.

On Simplee’s claims detail page you can see the initial price your provider charged and the discount your insurer negotiated so you can see this dynamic in action.  And if you ever lose your coverage you’ll see the kind of discounts you can ask your provider for.

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From the Simplee Community: “I was blind and now I see!”

Many thanks to Raymond (@nanao56) for writing us this story about how Simplee helped him finally understand his healthcare expenses:

I was blind. I just paid what looked like a bill. Sometimes, I was told I was past-due even though I got prior notices from my insurance company stating they were covering my bills. There were times when I just didn’t understand why I was paying for a service when I thought I was 100% covered.
This all changed recently.
I heard (in a tech competition) about a new web service that will aggregate medical claims into one view! The dog and pony show for this new service made it look like I could now be intelligent about what I’m paying. I signed up, but I could not connect to my health provider.
From a recommendation, I then heard about Simplee, so I gave it a try.
I was amazed; within hours, it pulled all my information in and started to categorize the information.
It was cool. Aside from the dashboard that quickly provided a snapshot of what I had paid for the year, it helped me understand each of the billing items and made me squirm to think of how much lack of information I had before on what I was paying.
To me, Simplee is the Quicken/Mint of Health Care. The ONLY cool thing about paying a health bill is the Simplee experience!
Thanks Simplee, I look forward to the service growing.
Raymond
To experience how easy your medical bills can be with Simplee, get started today with a free account.
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When A Patient Becomes A Medical Billing Expert

Guest post from clearhealthcosts.com– We’re bringing transparency to the health-care marketplace.

Unusual billing practices from hospitals are the topic of this piece, written by our friend iPatchman. He received a master’s degree in health policy management and economics from the Columbia University. He currently has his own health-care consultancy, Health2Social.

Consider this a lengthy but cautionary tale. I just spent two hours going back and forth between my provider and my insurance vender trying to decipher a health-care bill. I was trying to figure out why my doctor billed me $441.58 for a service date, when my insurance company claimed I owed only $131.99. I had originally called the hospital  because I found it odd that they were billing me an amount that was much more than the difference between what they billed my insurance company and what they received as payment. (As discussed in previous blog posts, the amount a patient owes in-network is usually a co-payment or co-insurance based on what the insurance company contract with the provider determines is owed for the service.)

It usually goes something like this:

Covered Amount = Amount Billed to Insurance – preferred provider or network discount. The covered amount is then divided into what the insurance will pay and what the patient owes.

In my case, I pay 10 percent of the covered amount (my co-insurance), so it would be: Covered Amount – (% co-insurance*Covered Amount) = Amount Paid by Insurer to Hospital.

The hospital wrote on my bill:

Amount Billed to Insurance ($1204.00) –Insurance Payment ($1083.61) =

Amount Owed by Patient ($441.58).

Now, anyone can see that the difference between the billed to insurance and amount actually paid by insurance is only $120.39 (the maximum amount owed to the hospital for my visit), and that is without taking into account any PPO discount, which lowers the amount further. Still, my doctor’s account representative insisted that this $441.58 is the amount based on theexplanation of benefit (EOB) from my insurance vendor, so that is what I am being billed. I tried to explain that it negates any logic that the amount my doctor is billing could be more than three times the amount the hospital is even owed — but my logic fell on deaf ears.

The hospital also refused to contact my insurance vendor to look into this matter, saying it is the patient’s job to do this. I decided to hold off on explaining that it is not the patient’s job or place to coordinate between the hospital and the insurance companies (which is the exact reason billing departments exist at hospitals) since I wanted to call up my insurance vendor myself to get a copy of the explanation of benefits.

From my education and work background, I have analyzed health claims for hundreds of thousands of employees from dozens of  Fortune 500 companies. This is why I never pay any doctor or hospital bill until I review it and compare to the EOB from the health plan. I cannot imagine how most people, who do not have the health-care education or work experience I do, deal with their health-care bills. I catch mistakes by the health plans and the hospitals all the time, and most times they are for hundreds of dollars.

After obtaining the explanation of benefits from my insurance vendor I was left with the following explanation:

Charges Billed ($1629.54) – PPO discount ($309.59) = Covered Amount ($1319.95),

and

Insurance Payment ($1187.96) + Patient Responsibility ($131.99) = Covered Amount ($1319.95).

This now makes sense as my responsibility was exactly 10 percent of what my insurance company decided was the covered amount. Still, when I asked my insurance company to send this information to my doctor, the representative said they had already done so, and had already paid, so they would not do it again. They were willing to fax me a copy instead. Again I encountered the misconception that the patient is somehow responsible for communication between the hospital and insurer. In this case, though, I wanted to call my provider back anyway because I need to understand where their mistake was.

Calling back my doctor did not result in any productive conversation as the representative was only able and willing to read back to me what they had in their system. I tried to explain again, but got nowhere. When I asked my provider to start an inquiry into this matter, the rep told me to ask my insurance company to send them the EOB again.  I politely explained that I can make a few phone calls, like I did, but I cannot facilitate the communications between the hospital and insurance company and that is what they were for. I also explained that this practice of billing a patient a large amount that was not owed was either criminally negligent, or fraudulent, but in either case I expected a full inquiry into this matter (mind you, my provider mostly deals with patients with cancer – patients who have enormous health-care bills, not to mention plenty of other things to worry about). I asked her to have someone in a management role in the billing department call me back, but she responded that they do not call back anyone. She said I can call in 7 to 10 days to see if there was an adjustment.

When I asked if they had received the fax with the new EOB I had sent them, she responded that it takes 24 hours for them to receive the fax digitally into their system. This cracked me up, since not only do they require patients to use an anarchic method of communication, but they do not even really have a fax machine, and instead use the digital system to receive faxes (which makes you wonder why I could not e-mail them the EOB).

The takeaway lesson here is simple.

Think carefully about automatically accepting or paying any bill you receive from a health care provider. It’s only prudent to review and compare all bills to your plan’s explanation of benefits.

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More from clearhealthcosts.com:

How much does an M.R.I. cost? The view from the medical billing office

Mammogram costs: A Boston-New York rivalry

Why so many angioplasties? A mystery story

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When To Go To The ER: A Financial Perspective

This post also ran on Mint.com's personal finance blog.

It’s the middle of the night, and your child has a fever. Or your spouse is having some mystery pain that has you worried. How do you get the care you need—while avoiding that ominous emergency room cost?

The best plan is to know what options are available to you before you need them. Your health plan may have services specifically to help you in these situations. And in the long run, by avoiding unnecessary hospital costs, you’ll be doing your part to keep your insurance premiums lower.  Here are some places to start:

Nurse Advice Lines: Many health plans provide free 24-hour nurse advice lines to their members. Check to see if your plan offers this benefit and if they do, keep the number handy—in fact, just save it in your phone right now so you don’t have to look for it again.

Community Primary Care Clinics: Find out which clinics are located in your area and how they work with your health plan. If you have a PPO, some doctors there may be covered by your plan. If you have an HMO, you can ask about sliding scale rates, but most of the time, if you have some form of insurance, you will not be eligible for sliding scale. And since your care will not be covered without your primary care physician’s referral, this option could become pretty expensive.

Urgent Care Clinics: Some hospitals operate urgent care clinics that have extended hours. They may be part of a public health system or associated with a private hospital. Fee scales can vary for these clinics depending on your insurance (and be completely different from that at the primary care clinic).

Retail or Minute Clinics: These privately run clinics can provide quick, walk-in health services for a low flat fee (fee for service). Many minute clinics have evening and weekend hours. However, they are not equipped to handle emergencies, serious injuries, or complex issues. What can they do? Think basic sprains and strains, cuts, strep throat, pink eye, or poison ivy. For anything more severe, these clinics won’t be able to help.

Plan ahead with your primary care physician: If you are especially concerned about being in the midnight-ER-visit situation, consider choosing a doctor that prioritizes patient access. Ask their office:

  • If they have expanded evening or weekend hours
  • If they provide same-day appointments
  • How long it usually takes to get an appointment
  • If physicians are available via email

Most of the time, your primary care physician is your best bet for getting low cost, reliable care, so start with them (the exception can be if you have a PPO and an established relationship with a specialist).

And as a last resort, you do have the emergency room. But keep in mind that ERs are not designed to provide routine health care. So while you might get your health issue addressed, it most likely will not be in a timely or cost efficient manner. Emergency rooms are supplied with physicians and equipment to handle severe trauma, so when you go there with a minor health issue, you are still paying (and waiting) for this specialization.  Plan ahead and know your options, and you might find a way to take care of your problem without emptying your pockets.

Note: We are not attempting to give medical advice here. If you ever feel your health is in danger, getting appropriate medical treatment should come before financial considerations.

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Essential Tips for Medicare Open Enrollment

Usually, it’s the same with Medicare every year: mid-November through the end of the year is the time to change plans (either health plans or drug plans). Not so anymore! This is just one of many changes rolling out this year. For the savvy Medicare consumer, here are the best tips (old and new) for finding the right plan.

The first should no longer be a secret: starting this year, Open Enrollment moves up—to October 15th – December 7th.  This is your chance to switch to a different Medicare Advantage Plan or Part D drug plan. If you miss it, you can still drop your health plan during the Medicare Advantage Disenrollment Period (MADP) which occurs January 1st – February 14th. You won’t be able to choose a new one, but you can enroll in a new Part D plan so you at least have drug coverage. And you will be responsible for all of Medicare’s deductibles and co-pays (20% of all outpatient) if you don’t have other supplemental coverage. You cannot drop a stand-alone Part D plan during the MADP though—only a Medicare Advantage health plan.

Second: Keep your eye out for Five-Star plans. Medicare rates all Medicare Advantage and Part D plans with star ratings based on quality and cost. Beginning in 2012, consumers will be able to switch to plans with a five star rating at any time of the year. So let’s say you missed Open Enrollment or are unhappy with your plan; this new rule allows you to find a Five-Star plan and switch.  But don’t get your hopes up—in 2011 there were only seven five star plans in the entire nation.

Third: If your Medicare plan is discontinuing next year, you have a chance to get a Medigap. Normally, Medigap (Medicare Supplement) plans can look at your health history and deny you coverage unless you apply when you first get Medicare. But if your Medicare Advantage plan is leaving the market, you have a special right to buy a Medigap plan with guaranteed issue. The law gives you 63 days from when your plan ends so don’t wait.

Fourth: If you’re concerned about the cost of your prescription drugs, Medicare has an amazingly thorough tool to allow you to compare drug plans at www.Medicare.gov. You can enter the names and doses for all your medications and see exactly how much each costs under every plan. Also be ready for  bigger savings in the donut hole: The discount increases to 50% off brand name drugs and 14% off generics.

Finally, if you want detailed, individual help with your Medicare, take advantage of SHIP. Every state has this program to provide face-to-face assistance to anyone with Medicare (or their caregiver or representative). The State Health Insurance Assistance Program (SHIP) is unbiased, free of cost, and has counselors knowledgeable about plans in your local area. So who wouldn’t want the chance to sit down with an expert to ask anything you want about Medicare? Find your program.

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