2012 > February

Monthly Archives: February 2012

Going Out-of-Network? Read this First.

If you have an HMO or PPO, you know that going to your plan’s network providers will save you money. But for those cases where you really want (or need) to see a specific doctor, and they’re not in the network, it might be worth the extra cost. After all, if co-insurance is 80% in-network and 50% out-of-network, how big will the difference really be?

The answer is not so straightforward. Or in other words, it could cost a lot more than expected, even if you obtain prior approval from your plan.  Here’s a behind-the-scenes of going out-of-network.

So why the network in the first place?

In-network providers have made a deal with your health plan to accept a certain rate of payment for each service they provide. But there’s no such deal with out-of-network doctors, so most of the time, they are going to bill the plan more than that agreed-upon rate. It’s a way for health plans to control their costs and for providers to ensure they get some guaranteed patient flow.

Why you might pay more than expected

Health plans have a strange way of calculating how much they will pay an out-of-network provider, and now, many plans have begun to change that method in order to control their costs.

Let’s say your surgery cost $10,000 and your PPO plan says it covers 50% out-of-network. You would think they would pay $5,000, right? But instead of looking at what the procedure really cost, health plans typically use the UCR or “Usual Customary Rate,” a kind of industry average, and calculates 50% of this. So if the hospital you went to is not wildly expensive, the UCR would be just about right.

Many plans are now switching from UCRs to Medicare rates—which tend to be a lot lower. So if Medicare’s rate for the surgery is $4,000, the plan will pay $2,000.  You can imagine what the hospital might do after providing a $10,000 surgery and then getting paid $2,000.  Yes, you might expect a bill for the remaining $8,000. These numbers are a bit simplistic, because there is usually a multiplier to bring the Medicare amount up since it’s normally pretty low, but you get the idea.

This practice is known as balance billing. It’s illegal for in-network claims and emergency care in most states, and for people with Medicare, but otherwise allowed if you went out-of-network. So what to do? It’s best to know before you go: Read your plan’s policy to see how it calculates these reimbursement rates and find out whether balance billing is allowed in your state. If you do end up with a balance bill, try negotiating with the provider. Many will lower the cost or figure out a payment plan with you.

Beware even if you have prior approval

If you still plan to go out-of-network, you may be able to get prior approval from your plan if for example, the service can not be adequately provided in-network. If you do this, make sure you know exactly who and what is covered: while a specific surgeon may be approved, other physicians involved with the procedure, such as an anesthesiologist, may still be considered out-of-network, even if they work at a hospital that is in-network.

The same goes for follow-up care, even if it is with the same physician. The bottom line? Don’t assume everything is approved just because one thing is.

Of course, the best bet for keeping your costs down is staying in-network. But if that’s not possible, first try for prior approval and make sure you know exactly what is approved. If you can’t get approval, make sure you understand how out-of-network rates are calculated before making your appointment. After that, watch your bills and Explanation of Benefits for multiple charges for the same thing.


How to Spot Medical Billing Errors in 5 Minutes

Most of us have received a medical bill with an error on it at some point in our lifetime. It’s bound to happen with an estimated 50 to 80% of bills containing some kind of mistake. But how many of us have actually bothered to look for errors, let alone succeed in finding one?

It’s not easy. Medical bills can be pretty complex for a single sheet of paper. So most of us just grumble at the high cost, write our checks begrudgingly, and then move on with our day. We never quite know whether what we paid was truly right or not.

But how do you actually detect an error? What should you look for?

This stuff can be complicated, and some errors require an expert’s eye. But others only take a few minutes to spot. Really. Try these quick tips each time you get a new bill.

  • Find the discount. If you’ve met your deductible, your health plan should be paying. It’s that simple. If you find you’re being billed for the full charge, there is probably something wrong.
  • Double check dates of service. This is especially important for hospital stays. Sometimes patients are billed for more days than they actually spent in the hospital.
  • Look for duplicate charges. If the same service name or CPT code appears twice on a bill or you get more than one bill for what appears to be the exact same service, you might be getting charged twice.
  • Check the network discount. If your plan has co-insurance (you pay a certain percent of the cost), you usually have to pay a higher percent for out-of-network providers than in-network. Look for the discounted or adjusted rate on your bill and then check what percent your insurance company applied. Sometimes the out-of-network discount is applied when the provider was actually in-network, which could make you responsible for 50% of the cost rather than 80%.
  • Compare past bills. If you got similar services from the same provider in the past, you might be able to spot an outlier. Simplee allows you to compare bills at a glance, without having to save and sort through a pile of paper. One man saved over $900 when he noticed one bill where the wrong discount was applied.
  • Look-up the CPT code. This is a five digit code—usually all numbers, but sometimes four numbers with a letter on the end. There is a code for every procedure you could get—for example one for a routine physical, one for a flu shot, one for an x-ray of the abdomen, etc. Make sure that the description of the code matches the service you received. If the description sounds inaccurate or more elaborate, that’s a red flag.

By being familiar with your health plan’s rules and regularly reviewing your bills, you’ll get more comfortable with how they look and what seems off. But most people don’t receive bills frequently enough to get that much experience.

If you are unsure, call the plan or try contacting your state’s Department of Insurance, or the agency that regulates health plans. They may offer free consumer assistance with bills. And if you’re still in doubt? Consider a billing advocacy organization such as Medical Billing Advocates of America.


COBRA: To Elect or Not to Elect?

So you’re entitled to COBRA health coverage! COBRA can be both loved and hated. On the plus side, it’s guaranteed health insurance for those scary times when you really need it: you lost your job, you get cut back to part time and no longer qualify for benefits, or you get divorced and your spouse had been your source of coverage.

On the negative side, COBRA costs an arm and a leg. In fact, it can be some of the most expensive individual health coverage out there.

So it’s natural to feel stuck:  Stay and pay for a plan you are familiar with or hunt for something better and risk losing some good coverage? Let’s review how COBRA works.

What is COBRA?

COBRA is not a specific health plan. Rather, it is the right to keep your existing group health plan when something changes about your life situation that makes you no longer eligible for coverage. The difference is now you’ll be shouldering the entire cost. No more help from your employer.

How Does COBRA work?

Once you’re employer is aware of a change in you (or your dependents’) health insurance eligibility (called a “qualifying event”) they’ll notify you that you’re eligible for COBRA. It’s then up to you to complete the forms to elect COBRA. Then, you’ll be billed the full cost of the plan—your share plus the share your employer used to pay—plus a small administrative fee. This fee cannot exceed 2% by federal law. You’ll probably receive a new health insurance card, but your plan will remain the same as it was before. Basically, under COBRA, you get whatever active employees get. So if your employer changes the plan for everyone, it changes for you as well. If there is an open enrollment period to switch plans, you can also switch. Your former employer cannot change your benefits just because you have COBRA.

Who is COBRA good for?

COBRA could be a good choice for you if

  • You have a lot of pre-existing conditions
  • You go to several specialists who are covered under your current plan
  • Your plan has some unique features or good coverage for a special service that you need
  • You expect to get more affordable coverage from another source soon.

Of course, you should always look into your options and compare costs, but generally COBRA tends to work out well for people in these situations.

Can you be denied other coverage if you don’t elect COBRA?

Yes you can. Unfortunately, you currently do not have any guaranteed rights to obtain coverage from another company simply because you are eligible for COBRA.

What about Vision and Dental?

These are both subject to COBRA. And depending on how the plans are structured, you might be able to choose one or both of these separately from your medical plan, or only take the medical plan. Check into this to tailor your health coverage to only what you need.

Finally, if you decide to elect COBRA, watch your deadlines. There are very specific windows of time for when your employer must inform you of your right to COBRA, when you can choose to take it, and when you must pay the premium. For the time windows that apply to you, see http://www.dol.gov/ebsa/faqs/faq-consumer-cobra.html.