Thursday, July 16, 2009

Tips for Understanding your Medical Insurance

Dealing with and understanding any medical insurance requires some talent, patience, and mostly perseverance. What happens when you have to change policies? That can be a stressful experience. 

Recently, I had to change from my fabulous traditional indemnity policy (straight 80/20 split) with no distinction between in- and out-of-network benefits) to what is considered by modern day standards pretty darn good insurance a PPO - Plus (boo hoo). The "Plus" only means you have additional out of network benefits.

After I whined and moaned for a while about my fate, I decided to bootstrap it and understand the new animal I was dealing with. And, boy, can it be complicated. Pay special attention to the language; it can be very obfuscating.

Here are some basic questions for the insurance company
  1. How do copays work? Do they apply to deductible? Most don't.  That is simply what you pay out of pocket. Your deductible is the "co-insurance" part of the deal

  2. What is the definition of in-network and out-of-network benefits? It is important to understand what they mean by whatever breakdown figure they use (for this example I am going to use a  70/30 split).

    What you will ultimately pay is not necesssarily based on what the doctor bills you. It is dependent on what the insurance company deems as "allowable". (And, all use different fee schedules there are no federal or state guidelines, although all insurance companies go off certain standard metrics).

    So, let's say you get a bill for $150 for an out-of-network doctor. Your insurance company may say that $100 is allowable by their schedule. They base their reimbursement on the allowable fee of $100. So, that means they pay $70 and you pay $30. The other shoe that will drop for you is the $50 that insurance did not allow. The docts office will "balance bill" you that amount + your coinsurance. So, your total out-of-pocket costs will be $80. (Sometimes, you can get a doctor to write off that $50, but you have to be proactive and ask.). This is not the same as a co-pay.

The other part of the equation is to understand how you provider works with the insurance company. Usually, doctors offices know who they contract with and who they don't. Remember it is your job to ask, so you know what your cost could be. 

There are many flavors of the same insurance company. Just saying Anthem won't get you very far. For instance, Anthem in California is only run by Blue Cross (not both Blue Shield and Blue Cross). You need the specific insurance info, which is determined by ID and Group numbers on your ID card. Those numbers do more than simply identify you and will let you know what the score will be. Think of it as your medical credit card with your personal rate information.
  1. If you are not sure how your new insurance will treat a provider (this is usually only significant in the out-of-network scenario(s)) You can always ask for the diagnosis code(s) (ICD9) and procedure code(s) (CPT) the docts office will use for your treatment/visit.

    Then go back to the insurance company and ask to run a test claim. That should give you a good guideline on how insurance will pay. When you do this, make sure to ask if the call has been recorded, and always take good notes that summarize the discussion and outcomes (include name of person, date, and summary). Insurance companies always say that no claim quote is valid until it is completely processed. Good data is key. In the event that something goes wrong, you can point to the conversation you had. It is always more difficult to recreate your memory.

  2. If you go to a hospital in your area, make sure you find out if both the facility fees and doctors fees are covered. Ask this of the billing department. The receptionist checking you in is often not a reliable source of information. I have come across cases where the facility is covered but not the doctor (i.e. radiologist, pathologist, emergency). It is a serious drag to not know this in advance. You think you are all covered, but then you get a $450 or more doctor's bill.  

    The hospital is generally not proactive in telling you this (unless you get someone who is on the ball, which in my experience is not very often.) Tell me, how many times have you asked the same question from multiple representatives of a facility or insurance company and gotten as many answers? Please note: Most say, that they do a courtesy billing. That does not mean that they are preferred providers of your insurance company. 

These are some simple techniques to help you better manage your costs. Until our medical system changes and patients have better consumer control over their costs, these simple techniques have been the only way I have some measure of understanding and controlling costs.

I highly recommend doing these basic steps before you need to use services. An emergency can happen at any time, as I have found out the hard way. Once you get a handle on what the expenses are (especially your out-of-pocket ones) before you have any treatments, procedures, etc... you will be much better in control of your outcomes.

Never assume, always ask questions, because it is in your best interest to manage the nuances of your healthcare and be a better CEO of your healthcare and body.

1 comment:

Anonymous said...

Just fyi. Some insurance companies actually prohibit balance billing. It is in the contract they have with the doctor (provider). This is because when they allow 'x' amount for a procedure they really want it to be 'x' amount. These amounts are based on a variety of factors including 'reasonable and customary' rates for this procedure in your geographic area. Balance billing could, theoretically, skew these rates over time depending on what variables are included and weighted in the algorithm used to determine fees, etc. It will vary.

Also, most insurance companies 'sell' their plan(s) to employers based, at least partially, on their rates -the bottom line. If those contracted rates and the savings they allege to afford are ultimately circumvented, employees will complain to their employer which may cause the employer to change plans next year. Hence, the insurance company really, really wants the rate enforced or it affects the 'marketability' of their product.

Many doctors will balance bill anyway just to collect from those who pay all their bills as a matter of fact or habit and without much question. More people do this than you would imagine and if you can afford to, well, why not? They (doctors) may choose not to pursue these funds if you do not pay. Your insurance company will tell you if your policy permits balance billing based on the contract they have with your provider/physician.Sometimes your EOB will state that you are not responsible for any amounts billed over their contracted rate. You should know the insurance company's policy and your physician's office policy. They may be at odds. (See below.)*

Some insurance companies would consider balance billing a breach of contract on the part of the physician. I suspect such a 'breach' is rarely the precipitating event for dropping a physician from a given plan but is, rather, something the insurance company can use to terminate the contract if it is to their advantage and they have no better legal 'reason' to drop the doctor from their plan. 'Stacking the file,' to use the business term.

*Another consideration, however, may be whether your payment of balance billing affects the good will between patient and doctor. Ideally it should not and I would venture to say it generally does not. Many doctors take your individual circumstances into account on this matter. But doctors are human, too.

Editorial comment: If you are only just now losing your straight indemnity insurance you have been a lucky woman -in that respect. I greatly lamented the loss of mine in 1995 -me and my colleagues kicking and screaming all the way -as we were working in a major medical industry- so we thought our employer was the last holdout. God bless your employer for holding out. It cost them a lot of money I can assure you. Of course, current healthcare costs make indemnity practically impossible -we used to pay 100% up front -the doctor's office staff filed and the patient received a reimbursement check for 80% or 90% -depending on your plan -6 weeks later. Would go broke doing that now -or die waiting on funds for the next visit.

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