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re: What’s the point of medical insurance?
Posted on 6/22/22 at 6:58 pm to Zapps
Posted on 6/22/22 at 6:58 pm to Zapps
I think what the OP is trying to say is why do the people paying for insurance try to avoid going to the emergency room for fear of what the final bill may be compared to the uninsured people walking in for minor things and knowing they will not receive a bill or hardly pay anything.
Do agree if you have good insurance you will be paying more out of pocket even though you get a nice chunk taken out of your paycheck every two weeks already . So i understand the frustration.
Do agree if you have good insurance you will be paying more out of pocket even though you get a nice chunk taken out of your paycheck every two weeks already . So i understand the frustration.
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Posted on 6/22/22 at 7:02 pm to braindeadboxer
quote:
Our healthcare system serves to make medical providers AND insurance companies money.
You sure live up to your name. Go back and read what HopefulDoc, Roscoe, and I posted. All 3 of us with more knowledge of how the medical costs actually work.
Basically, payments are set by insurers, mainly the government. Medical providers have no say in what they are paid…unless they are cash only or don’t sign a contact with insurers (out-of-network).
I would love to move to cash only, with catastrophic coverage. I think it’s the best way to be transparent with costs, but still protect against bankruptcy with a major medical problem.
Did you know it’s also illegal for a medical provider to barter. So if I want to trade services with a plumber, illegal. Also, many ways politicians make outside money (legally) are explicitly illegal to medical providers.
This post was edited on 6/22/22 at 7:04 pm
Posted on 6/22/22 at 7:39 pm to pngtiger
quote:
Why no one can tell you how much anything costs? There are 6+ major insurers plus many small ones. Within each of those are 6+ options to chose from, and within each of those are levels. The contract for each is different. So there may be 100 different variations, and the only one that knows the true cost is the insurance company. And the people that do the pre-certifications are not connected to billing, so are clueless to what it costs.
I understand your post and appreciate the input. That said, the point above is a pretty poor excuse (in my opinion) for business practices that wouldn’t fly in most other industries.
The following statements are contradictory:
quote:
Hospitals and doctors could charge you $1,000,000 for anything, but what they get paid by insurers is what the contract says.
quote:
So there may be 100 different variations, and the only one that knows the true cost is the insurance company.
As you said, the in-network billable rate is based on the contract. The provider signed that contract and has a copy of it. Managing a large number of price books isn’t all that difficult - manufacturers and distributors do it in other industries all the time.
Now.. there are certainly cases where it makes sense that billing would take a little more time. Particularly for hospitalizations where you can have a fairly complex bill. But for outpatient clinics? It should be relatively simple.
I went to an urgent care clinic a couple of months ago. I have a high deductible plan, so it was 100% out of pocket. The clinic charged something like $113 to my credit card. A month later they sent me a bill for $5 because it turned out the contract rate was $118. That’s asinine, easily preventable, and a huge source of inefficiency.
It can be managed in the healthcare industry, it’s just that there’s limited market pressure to do so. It’s a symptom of the larger problem: Medicare/Medicaid and the insurance companies, rather than the patients, are seen as the “customers” in these transactions.
Posted on 6/22/22 at 8:09 pm to Zapps
Just dont pay the remainder. Who needs good credit when we will own nothing and be happy
Posted on 6/22/22 at 8:10 pm to lostinbr
quote:
The following statements are contradictory:
Based on everything else he wrote, I think he misspoke. If you change the second statement to:
quote:
So there may be 100 different variations, and the only one that knows the true cost is the provider/hospital.
then it makes perfect sense, and I would agree with it. The way it is written is incorrect.
quote:
As you said, the in-network billable rate is based on the contract. The provider signed that contract and has a copy of it. Managing a large number of price books isn’t all that difficult - manufacturers and distributors do it in other industries all the time.
You could probably have this programmed into EHR within a matter of weeks, but you won't.
Here's why:
Your out of pocket at the doctor's office changes based on how much you've spent and how many doctors have pending charges out there on you. While it's possible to bill patients the reimbursible rate, it would not be beneficial to anyone but the patient. Unfortunately, just about no one who has any amount of power or money to do anything about the situation gives a damn about the patient, though.
So, you have 10,000 or so CPT codes. Matching a price to a code is easy and something you could probably teach a 95 year old with mild dementia to program. But then you need information from the insurance company on each plan within each company's offerings specific to the patient, and you need live data from it- what the copay, coinsurance, deductible, max out of pocket are + how much has been spent year to date by that patient. That information isn't integrated into EHR or shared from the insurance company to the provider in real time. It would be a bit more of an undertaking than the previous query and require real-time charges, but it would be fairly doable if insurance companies cared to make anything easier for anyone. But they benefit from being convoluted and slow to act.
The response?
Those who get paid by them want to make sure they receive every penny allowed Contracts get re-negotiated. You don't get money you don't bill for, so they set stupidly high bills that they never expect anyone to pay so that the insurance company gives them the max allowable.
I'm fairly certain there would be public outrage and mass change if offices and hospitals refused to take insurance and the patients filed the claims themselves. You'd see more reasonable prices, too. But it won't ever happen.
Posted on 6/22/22 at 8:12 pm to Clyde Tipton
quote:
Because if you need emergency open heart surgery to the tune of a couple hundred thousand bucks,
And believe me, you never know when it may happen to you, and I don’t have the fats.
Posted on 6/22/22 at 8:16 pm to lostinbr
Based. There needs to be some friction in the system to discourage abuse and unnecessary procedures and visits. Even if that fee is only $15 or $20 like a copay now.
Posted on 6/22/22 at 8:34 pm to Hopeful Doc
quote:
I'm fairly certain there would be public outrage and mass change if offices and hospitals refused to take insurance and the patients filed the claims themselves. You'd see more reasonable prices, too. But it won't ever happen
Certainly seen a few physician offices do this.
Basically they charge a cash rate but will give patients cpt codes and documentation for patients to file their own claims to get reimbursed at the out of network rate
But certainly a rarity and can't be done for most specialtiies.
Posted on 6/22/22 at 9:19 pm to Hopeful Doc
quote:
Hopeful Doc
Appreciate the response.
I’m not saying there are obvious solutions to everything. I will acknowledge that it’s a fairly complex industry/business model that leads to some weird interactions. Just sharing my thoughts, as an outsider whose wife works in the industry.
quote:
So, you have 10,000 or so CPT codes. Matching a price to a code is easy and something you could probably teach a 95 year old with mild dementia to program.
This was my main point. As I mentioned, I recently received a bill for $5 from an urgent care clinic because they charged me $112 at checkout when their billable rate was $118. This is the kind of thing that should be easy to fix. And the provider should have a pretty clear incentive to do so - the costs to collect that $5 are coming directly off their bottom line.
quote:
But then you need information from the insurance company on each plan within each company's offerings specific to the patient, and you need live data from it- what the copay, coinsurance, deductible, max out of pocket are
Slightly more difficult, sure, since it requires data on the specific plan. But not impossible. In most cases they already receive some of this information (at least coinsurance/copy), no?
quote:
+ how much has been spent year to date by that patient
quote:
Your out of pocket at the doctor's office changes based on how much you've spent and how many doctors have pending charges out there on you.
This is the hard part. Again, it’s not impossible. But this is the point where my outsider brain with B2B knowledge from other industries says “that’s probably gonna be a shite show.”
This is also a big part of why I think hospital billing, in particular, is a bit of a different beast.
quote:
You don't get money you don't bill for, so they set stupidly high bills that they never expect anyone to pay so that the insurance company gives them the max allowable.
And this is where my outsider brain just breaks. In my industry, I would get crucified by my customers if I took this approach. It’s in both parties’ best interest for billing to be accurate. Why? Because as a seller, I don’t want my customer auditing/disputing invoices. It fricks up my cash flow by delaying payment, it fricks up my revenue recognition/accounting because invoices get revised, it fricks up my relationships with my customers because they don’t trust me, and it guarantees that they will audit/dispute future invoices. For my customer, it means they have to spend an inordinate amount of time ($) auditing invoices against agreements. It’s extremely inefficient and increases their overhead.
Which is why it kind of blows my mind that it’s just.. the accepted practice in the medical field. And I think it’s one of the most frustrating things even for folks without business experience because it leads them to go “wait, how can you possibly not know what you’re going to bill me for?”
Which leads me back to..
quote:
Unfortunately, just about no one who has any amount of power or money to do anything about the situation gives a damn about the patient, though.
This is, I think, the overarching problem. The patient isn’t the customer. So many things would be solved/improved if patients had to pay the contract price directly and then receive reimbursement. One thought I’ve had that might improve cost awareness while also not causing huge inconveniences would be to use HSA/FSA debit cards and then allow insurers to electronically reimburse the HSA/FSA directly. But alas, nobody cares about my ideas.
Sorry for the long post, it’s just a topic that bugs me quite a bit.
Posted on 6/22/22 at 9:34 pm to Zapps
quote:
What’s the point of medical insurance?
To provide a buffer for doctors and hospitals to charge $500+/hr with or without providing any sort of resolution for the client. Especially clients that could never afford it otherwise.
Posted on 6/22/22 at 10:06 pm to lostinbr
quote:
The following statements are contradictory:
Nah, not really. And I completely agree that wouldn’t fly in most other industries. And I wish it wasn’t that way in medicine!!! But alas, that’s the system we have thanks to government intervention.
My contract with an insurer doesn’t list, “I’ll pay you $xxx for Y procedure.” It just says you agree to the terms we set forth, blah blah blah. And since there may be 12 variations under that one insurer, and like HopefulDoc said, what is due by the patient is dependent on many factors, I can’t just pull out a book and say Y is going to cost you $xxx. Also, it changes, sometimes multiple times over a year.
So, the only entity that can tell you how much you will have to pay is your insurer. Except if you are self pay. And no, it’s not the provider or hospital, until the insurer weighs in.
Say you are admitted for a heart cath. After your visit, the hospital, cardiologist, radiology, maybe anesthesia will all submit a bill to your insurer. Your insurer will them say, “this is how much is allowed for this procedure. We will pay you 80%X (a percentage of the allowable), and the patient is responsible for 20%X.” You then receive a bill from the hospital, cardiologist, etc. for that remainder. Up to that point, the hospital or whomever can’t say how much you’ll need to pay. They can try to ballpark it, but…
Your urgent care example is a perfect example of them trying to guess how much you are supposed to pay, but then your insurer decided you owed more. So instead of you getting pissed and saying it’s asinine, they wait to see how much you owe and then bill you. Your choices are wait and see, or pay up front and possibly have to pay more.
And no, it can’t be managed in the healthcare industry. I wish it could but it’s too complex. We have a whole team of billers, and they can’t answer all of our questions without looking them up. I track by billing very closely, which allows me to be as upfront with my patients as much as I can. But I can only give a range on cost to patients…and that’s only for my services.
Even if I had a book that said for an office visit, what is allowed for each insurer:
BCBS - $150
United - $140
Medicare - $100
Medicaid - $70
Aetna - $130
I cannot charge those different prices based on what your insurer is. What is required of me, by law, under penalty of fine (and possible jail time if repeat offender), is to charge everyone the same.
An aside, TL,DR. One of my projects that I’m finally starting, after 3 years of fighting with administration, is the true cost of a procedure at my hospital. The fight was, when I asked for an itemized cost for everything we use, they could only give me what a patient is charged. They had no clue what things actually cost the hospital. I then had to fight with suppliers to get that data. And each supplier was different, some it was based on number of beds in hospital, others based on number of procedures, others based on how much was ordered (with layered discounts based on volume), others I had to figure out as each thing was a percentage of the total product ordered. It has been a huge project just to get to the point of determining what it costs the hospital to do each procedure.
Posted on 6/22/22 at 10:21 pm to lostinbr
quote:
Slightly more difficult, sure, since it requires data on the specific plan. But not impossible. In most cases they already receive some of this information (at least coinsurance/copy), no?
It’s too difficult. There are hundreds of potential variables. I wish it were different, for everyone’s sake.
quote:
And this is where my outsider brain just breaks. In my industry, I would get crucified by my customers if I took this approach. It’s in both parties’ best interest for billing to be accurate. Why? Because as a seller, I don’t want my customer auditing/disputing invoices. It fricks up my cash flow by delaying payment, it fricks up my revenue recognition/accounting because invoices get revised, it fricks up my relationships with my customers because they don’t trust me, and it guarantees that they will audit/dispute future invoices. For my customer, it means they have to spend an inordinate amount of time ($) auditing invoices against agreements. It’s extremely inefficient and increases their overhead.
Preach! The current system is wholly, and insufferably inefficient…on purpose, to frustrate medical providers/hospitals, patients, to deny claims, to frick up revenue streams, to spend an inordinate amount of time (and money) so everyone gives up so the insurance provider wins.
My insurance covers 100% as long as I get my care at my hospital. I still get bills, and every time it takes hours over multiple days to fight the charges. They want me to say screw it, it’d be easier to just pay the damn bill.
Posted on 6/22/22 at 10:44 pm to pngtiger
quote:
My contract with an insurer doesn’t list, “I’ll pay you $xxx for Y procedure.” It just says you agree to the terms we set forth, blah blah blah. And since there may be 12 variations under that one insurer, and like HopefulDoc said, what is due by the patient is dependent on many factors, I can’t just pull out a book and say Y is going to cost you $xxx. Also, it changes, sometimes multiple times over a year.
The point about not knowing how much is due from the patient due to coinsurance, copays, deductibles, etc. is a valid one. Certainly more valid as it relates to out of pocket maximums and deductibles, but valid nonetheless.
The idea that it’s impossible for a provider to know the contract rate for a procedure is not valid. That’s terrible business. Are you telling me that providers are signing contracts with insurance companies that lock the provider into an unknown price to be determined by the insurance company, subject to change without notice, that the provider can never know until after they deliver their services? I find that very hard to believe.
Maybe there are providers who are willing to sign these contracts without understanding how their billable rates are determined. Again.. bad business, but I can see how it might happen for smaller private practices.
quote:
Your urgent care example is a perfect example of them trying to guess how much you are supposed to pay, but then your insurer decided you owed more.
The insurer didn’t decide I owed more, the provider did. My bill came from them. I have a high deductible plan as I said, so I paid 100% out of pocket directly to the provider.
So what really happened is they tried to guess how much the contract price was for the visit, then they found out that they’re actually allowed to charge $5 more and sent me a bill for the difference. And this wasn’t some mom-and-pop, it was FMOL.
quote:
So instead of you getting pissed and saying it’s asinine, they wait to see how much you owe and then bill you. Your choices are wait and see, or pay up front and possibly have to pay more.
If it were up to me the order of preference would have been:
1. Charge me the contract rate at time of service.
2. Send me a bill for the contract rate later, with no charge at time of service.
3. What they actually did.
I wasn’t given that choice.
The funny thing is that none of the complicating factors - coinsurance/copay, deductibles, etc. - matter in this case. Since it’s 100% out of pocket, it’s only a question of what their billable rate is per the contract for the visit. If they don’t even know that, then the rest of it is pointless to even discuss.
ETA:
quote:
I cannot charge those different prices based on what your insurer is. What is required of me, by law, under penalty of fine (and possible jail time if repeat offender), is to charge everyone the same.
This feels like semantics. You said in an earlier post that you can “charge” the “normal” rate then discount it for cash payers. If I’m paying at time of service, I’m certainly not paying the “normal” rate and getting reimbursed for the difference later.
quote:
The fight was, when I asked for an itemized cost for everything we use, they could only give me what a patient is charged. They had no clue what things actually cost the hospital. I then had to fight with suppliers to get that data. And each supplier was different, some it was based on number of beds in hospital, others based on number of procedures, others based on how much was ordered (with layered discounts based on volume), others I had to figure out as each thing was a percentage of the total product ordered. It has been a huge project just to get to the point of determining what it costs the hospital to do each procedure.
This exemplifies something I’ve suspected for a long time: hospitals have a severe lack of business knowledge/skills. What you’re describing is something that literally every business has to address - certainly every business with the revenue of a regional hospital. Is it complicated? Yes. But everyone does it. There are many ways to skin that cat depending on how much resolution you need (e.g. the more you classify as overhead, the easier it is).
It just kind of blows my mind that these huge businesses don’t do things that are standard in every other industry. Where do these hospitals find their finance people?
This post was edited on 6/22/22 at 10:59 pm
Posted on 6/22/22 at 11:24 pm to lostinbr
quote:
The idea that it’s impossible for a provider to know the contract rate for a procedure is not valid. That’s terrible business. Are you telling me that providers are signing contracts with insurance companies that lock the provider into an unknown price to be determined by the insurance company, subject to change without notice, that the provider can never know until after they deliver their services? I find that very hard to believe.
Yeah. It’s better to be part of a system for more bargaining power, but, for the most part insurers set the rates. If you decide to not sign the contract, it’s like alienating your customer base. You are now out of network, so you now don’t get patients from that insurer. And if you do, that patient now gets to pay more, since out of network. It sucks. It IS bad business. That’s what happens when government and big business take over.
My over-arching theme here is doctors, for the most part, want what is best for their patients, and like any other business, to be compensated fairly for services provided. Government and insurers have ruined that relationship. We are on the same side.
For your last part, I didn’t mean you specifically being given the choice, I meant the collective you. Instead of getting calls about patients being pissed off they are being charged AGAIN for a service, hospital/providers chose to bill at one time, once (hopefully) all data is known.
I would love to go to cash only. I wouldn’t have to deal with government BS, could charge what I want, could barter, could work within a patient’s financial situation, etc. it’d make things so much simpler. Unfortunately I am a surgeon, and less than 10% of what a patient is charged is directly my cost. I could chose to work for free. But, to provide my patients with the best financial situation, I take all insurances.
If you can come up with a viable option to make this whole situation better, you’d, well, idk, be rich, lauded as a hero, suicided by big insurance. Many have tried, all have failed. And every time government meddles, it only makes it worse. Reagan was an awesome president, but he’s the one that really put fire to this mess (which pushed hospitals and providers to a more business-like model).
Posted on 6/22/22 at 11:31 pm to Vamos Brandonos
quote:
Then it's a simple matter of avoiding all surgeries and major medical treatments for you and your family.
If you’re healthy, what’s the risk for year to year? I never go to the doctor.
There’s a chance I need an emergency, yes.
But will a provider deny me if I’m dying? Then I just don’t pay the bill?
Posted on 6/22/22 at 11:47 pm to lostinbr
ETA: just want to say, good questions/comments. I don’t completely understand this behemoth that is health insurance, but I try to learn more to help my patients navigate through the mess. You seem to be trying to understand instead of mud slinging.
I didn’t explain that well. I’m hospital based now, but when I wasn’t, I would see many uninsured patients. With many I would work something out with them.
For instance, instead of bartering, I hired a guy that did lawn care to cut my grass. I paid him, he paid off his bill to me gradually.
As to your specific question: I’ll go back to the appendix. My charge to insurance was $3000. I told those uninsured, “$1000 is what insurance would pay me. You will get a bill for the whole $3000 because I have to charge everyone equally, but what you owe me is what everyone else pays $1000. We can work out a payment plan for whatever you think you can pay me monthly. Once you hit $1000, you are paid in full in my book and I will write off the rest. I have to seek the complete payment, and you will get notices of such. After the 3rd notice I decide whether to send it to collections. At that point, the matter is dropped as i will not send it to collections.”
It’s no different than what hospitals do.
I wish there was a good way to convey my thoughts and facial expressions during my meetings with these people. I was in awe of how ignorant they were of their financials. You would think, as a business, they would know where every penny went. Luckily, new administration now that is on board with what I’m trying to do.
quote:
This feels like semantics. You said in an earlier post that you can “charge” the “normal” rate then discount it for cash payers.
I didn’t explain that well. I’m hospital based now, but when I wasn’t, I would see many uninsured patients. With many I would work something out with them.
For instance, instead of bartering, I hired a guy that did lawn care to cut my grass. I paid him, he paid off his bill to me gradually.
As to your specific question: I’ll go back to the appendix. My charge to insurance was $3000. I told those uninsured, “$1000 is what insurance would pay me. You will get a bill for the whole $3000 because I have to charge everyone equally, but what you owe me is what everyone else pays $1000. We can work out a payment plan for whatever you think you can pay me monthly. Once you hit $1000, you are paid in full in my book and I will write off the rest. I have to seek the complete payment, and you will get notices of such. After the 3rd notice I decide whether to send it to collections. At that point, the matter is dropped as i will not send it to collections.”
It’s no different than what hospitals do.
quote:
It just kind of blows my mind that these huge businesses don’t do things that are standard in every other industry.
I wish there was a good way to convey my thoughts and facial expressions during my meetings with these people. I was in awe of how ignorant they were of their financials. You would think, as a business, they would know where every penny went. Luckily, new administration now that is on board with what I’m trying to do.
This post was edited on 6/22/22 at 11:53 pm
Posted on 6/23/22 at 12:15 am to Hopeful Doc
quote:
Isn’t it silly that the maximum contribution to an HSA is less than the maximum out of pocket expense for an individual or family?
You can always contribute more to your HSA than the limit. You just can't deduct the excess and have to pay a 6% excise tax.
Posted on 6/23/22 at 12:21 am to Roscoe14
quote:
You doctor has a list price for the procedure, but that is a meaningless number just picked out of the air.
It's not exactly picked out of the air. The number is usually double or more the medicare reimbursement for the procedure/office visit. The reason is because physicians have to have a fee schedule that is the same for every insurance company, but they all don't reimburse the same. So, the fee schedule typically has an inflated price for the procedure compared to what medicare/insurance companies reimburse.
Posted on 6/23/22 at 1:09 am to threeputt
My doctor visits in New Orleans we’re $40 and any blood work was $21 cash
With insurance I would have been out of pocket for close to $200
With insurance I would have been out of pocket for close to $200
Posted on 6/23/22 at 1:33 am to Zapps
It really chaos my arse regarding the pricing of procedures.
Get admitted to hospital.
$10k/day bill.
Insurance ends up paying like $3k/day
Somebody paying cash(theoretically) would be stuck at $10k/day.
It should be one price.
Get admitted to hospital.
$10k/day bill.
Insurance ends up paying like $3k/day
Somebody paying cash(theoretically) would be stuck at $10k/day.
It should be one price.
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