Contributor’s Corner: Even the Cat Has Lost Health Insurance!

Continuing Concerns for Both 2- and 4- Legged Creatures

Ok. Now that I have your attention, STOP LAUGHING! It’s not funny–but, true. Poor Milo is now uninsured. Several months ago, we received a notice that the health insurance pet policy that had been in effect for years was looking for a new underwriter, and the affordable policy would terminate on 10/31/16. Finally, a new policy was made available, at rates, which you guessed it, would be considerably higher with larger deductibles and less coverage. Not surprising, but true. The message: two- and four-legged creatures beware.

The decision to let that policy lapse wasn’t easily made; but economically, it didn’t make sense to purchase a policy that had a very low cost/benefit payoff. Of course, Milo wasn’t faced with paying a penalty on his taxes (LOL; we can’t even claim him as a dependent) for remaining uninsured, as you or I might possibly be subjected to, if we made the same decision. It was much more like passing on dental insurance. Unless you have it as a fringe benefit, the narrow networks, and limited benefit schedules makes the value proposition easy enough to pass on. In effect, being self-insured, while not desirable, is a viable option. However, for medical insurance, it’s a very different story.

Elections matter, and with some form of “repeal and/or replace” looming in the next Congress, millions of individuals will likely find themselves in Milo’s situation, except with more uncertainty and risks, as availability, benefits and costs are unpredictable at this point in time. For those that think it’s going to be as simple as ABC! Think again. The new Congress and Administration are soon going to realize that the denouement (I liked that word in high school when learning how the plot unraveled in a novel) will be complex and fraught with obstacles.

O, what tangled web we weave when first we practice to deceive![1]

Right now, there is much speculation about the outcomes, and it is far too soon to really know. Call me skeptical, but after the pundits and polls missed the outcome of the election, I’m not too sure that conventional wisdom still applies. For all we know, Obamacare may become Trumpcare. After all, we learned that packaging and showmanship works. It reminds me of local government after an election, all of the town signage is changed so that the same park or arena now has the new town leader’s name emblazoned on the sign, lest we forget it’s still the same park. Nothing has really changed, just the name. The decision-makers should remember: Will the “quality go in before the name goes on?”[2]

Perhaps that’s wishful thinking, but just imagine like the game, “Cat’s Cradle,” when you try to take the string off your partner’s hand for the fourth or fifth time by correctly and deftly interlocking your fingers about the string to transfer it from your partner’s hand to yours while making sure the integrity of the cradle is preserved. From “cradle to grave,” there is plenty to be concerned about.

For the Young at Heart

The “invincibles” may find themselves unburdened by the penalties that may be lifted for not having health insurance. But the gamble still exists: what will you do if accident or illness befalls you in spite of your youth? Will insurance companies be able to make policies available at competitive or affordable prices without the youthful demographic helping to even out the risk pool? For those without company provided healthcare, will the likely elimination or reduction of government subsidies force newly insured individuals to abandon their insurance after finally obtaining it. Maybe there’s hope, based on some reporting, for those 26 and younger still being carried on their parent’s policy

For Those in the Middle

But wait a minute-what if the parent had an exchange policy with a 26 or under child on the policy, and now the exchange is defunct, or healthcare.gov no longer is supported, the entire family will be in need of insurance. The same will be true if exclusions or high risk premium pools are established for those with pre-existing conditions. And if lifetime benefit limits are reintroduced, given what we know today about the wonderful (but expensive) life-saving treatments and medications, it will give new meaning to the “sticker shock” millions will face as “open enrollment” periods will become a serious exercise to be called: “In search of….”

Crossing State Lines and Population Health

We generally associate the “state lines” argument with the anticipated competitive structure of premiums if insurance companies can sell their policies without geographic restrictions. It may also call into question in which state you live, and if there was adoption of the Medicaid expansion allowing many millions of individuals, previously above qualifying income levels, becoming eligible, and whether that too will change.

With all the emphasis on population health and treating patient outcomes, does the nation run the risk of losing ground it has just started to gain? I’ve never been a fan of the term “accountable care organizations.” When seeing the blue H, or MD after the name, there is the presumed quality and accountability associated with it. If what we now have today is better than what we had before, then the new Congress and the Administration will need to be “accountable” for whatever evolves as a result of its actions and/or inactions.

Don’t Mess with My Medicare

For those of us above a certain age, Medicare (whether “Regular” or “Advantage”) comes with a special “seal of approval” and certain safeguards. There may not be an appetite to change Medicare for those already on it, but it may not be necessarily true that it will be preserved “as we know it” for those approaching age 65 over a 5-10 year horizon. In today’s political landscape, it’s not clear that the “graying advocacy” of seniors will be strong enough to maintain this safeguard for all.

Metamorphosis

I wonder how many of us hope that when we wake-up we find this was all a dream.

One day, Gregor Samsa, a travelling salesman, wakes up to find himself transformed into a giant insect. Confused, he looks around his room which appeared normal. He decides to fall asleep again and forget what happened in the hope that everything will revert back to normal. He tries to roll over his right but discovers that he cannot due his new body he is stuck on his hard, convex back.[3]

Unfortunately, we are in a new reality. And it’s too early to forecast what will happen next. Change for the better will be good, and the current system can be improved. Change for “change’s” sake won’t do much except waste a lot of time and money, and cause needless anxiety. Milo’s just hoping that there’s water and food daily, and that his litter box is changed regularly, and that his visits to the vet are uneventful. For everybody else, pay your monthly premium, stay healthy and stay tuned.

Allan P. DeKaye, MBA, FHFMA, is President and CEO, DEKAYE Consulting, Inc., a revenue cycle healthcare firm. He is also a member of the Health Law Editorial Advisory Board for Wolters Kluwer Legal & Regulatory U.S. Mr. DeKaye is author/editor of The Patient Accounts Management Handbook. He is working on a second book, My Medical Bills Are Killing Me © What Americans Need to Know About Health Insurance.

[1] “Marmion,” by Walter Scott, 1808.

[2] Original slogan of Zenith Electronics

[3] Franz Kafka, Die Verwandlung (or The Transformation or Metamorphosis), 1915.

 

Copyright © 2016-2017 Allan P. DeKaye. All Rights Reserved. Reprinted with permission of the author.

Contributor’s Corner: Making Healthcare Insurance Decisions Today

The Times They Are A-Changing*

[*Song Written by Bob Dylan, 1963.]

 

All too often my professional and personal life values collide. This was especially true more recently when it came to choosing a health plan. When you cross the Rubicon—in this case—at age 65, some amazing things happen: one in particular–Medicare. Suddenly everyone wanted my business. And for good reason! It’s a payer that pays quickly with rates that (when compared to other payers) aren’t too bad. However, never did I think I’d sign up for a Medicare Advantage (MA) plan. But I did. Why? $50.00 a month in premium was a whole lot better than the $800+ I was paying monthly before the crossing. And also better than the $500+ plan I might have purchased on the healthcare Exchange for a platinum plan if under 65 years of age.

My negative predisposition centered on my professional experience watching my hospital clients and industry reports of how poorly MA plans paid claims—especially delaying payments. But when faced with the economic value of the monthly premium, being able to have a PPO (preferred provider organization) of physicians and hospitals to choose from that meet my in- and out-of-network choices, it became a no-brainer.

The other choice was to select a Medicare supplemental policy; the best of which appeared to be the plans offered by AARP. In contrast, there were no networks at all to be concerned with, and the supplemental plan would pay all of the deductibles, copayments and coinsurances associated with Medicare (Parts A&B)—if you selected the most expensive option. Still a good buy, if your out-of-pocket (OOP) costs under an MA plan were to approach the maximums offered by those plans. It seemed a better bet to pay lower premiums with a known OOP limit if you were not likely to approach those limits, rather than paying supplemental premiums as a defined monthly cost.

There is truth to the old adage: “If it’s too good to be true…..” The MA premium increase for 2015 is going up to $71.00 month; quite a jump—but probably still a good buy. I still need to check the payer directory to be certain my key providers are still in-network. If they are not, then it’ll be time to reevaluate the value proposition.

Speaking of networks, there are now concerns that Exchange based plans are going to be further restricting their networks. After so many years of emphasizing the need to have consumers more involved in their healthcare decision-making in order to make better choices, as an industry, we now seem more willing to restrict choices. If there is anything the industry should have learned is these decisions aren’t based solely on price. It’s the same as with living in a representative democracy. We elect representatives who then vote (we hope) in our best interest. When we choose a physician, we place that same trust that when they recommend a procedure or hospitalization, it will be the best for the patient—not just based on cost. Of course, if you have a 20 percent coinsurance responsibility, then a $4,000 procedure that might be available for $3,000 represents a $200 savings/cost to the patient—all other factors being equal. Then again, who said there was any logic to our pricing model. While the payers insist that they have selected their networks based on quality, as industry insiders, we often know that means payer network providers are less costly—not always of the same quality.

Industry reports suggest that many previously uninsured patients are now gaining access to coverage through state or federal Exchanges. That’s the good news. Although with many selecting bronze level plans or those with very high deductibles, there may be surprises individuals receive, especially those entering the healthcare system for the first time as insured. Anyone who has had an automobile repaired after a collision knows that the OOP costs—usually a policy’s deductible (which can vary from $250-$1,000) can be a surprise—even when you have insurance. [Note: You stand a better chance having the same collision estimate done by two different examiners than having the same price quoted for a medical procedure by two different providers. It’s standardized pricing guidelines that most automobile insurers and collision shops seem to use.]

We’ve also begun seeing hospitals scaling back on financial assistance (charity care) by now making it a prerequisite that patients who may be eligible for Exchange based plans need to apply for them, rather than electively remaining uninsured. This may have a boomerang effect, having recently heard of a story of an individual who went on to an exchange plan that no longer had a particular doctor/hospital in its network necessitating a change in both for the patient, so that a followup hospitalization procedure would be covered. Be careful what you wish for!

We’ve all seen the Geico commercials where you can save 15 percent on your car insurance. Medicare patients will similarly see advertisements offering more from various MA plans. But not surprisingly, healthcare insurance exchange advertisements aren’t as prevalent. No one seems to be saving those individuals “15 percent” or offering something special. The more educated the population becomes, the more powerful their purchasing power will become. Instead of: Caveat Emptor—Let the Buyer Beware; perhaps one day, we could get to: “Let the Payer Beware.” Then the times will really be a-changing.

 

 Allan P. DeKaye, MBA, FHFMA, is President and CEO, DEKAYE Consulting, Inc., a revenue cycle healthcare firm. He is also a member of the Health Law Editorial Advisory Board for Wolters Kluwer Law and Business. Mr. DeKaye is author/editor of The Patient Accounts Management Handbook. He is working on a second book, My Medical Bills Are Killing Me © What Americans Need to Know About Health Insurance.

Contributor’s Corner: It’s All About the Money!

“An educated consumer is our best customer.”  That was the commercial tag line used by famed clothing retailer, Sy Syms.  However, for healthcare customers (aka: patients), knowledgeable consumers will find these two real-life scenarios over-the-top.

In Scenario #1, the patient has an approved PET/CT scan scheduled.  The day before the procedure, the patient receives a call from their insurance carrier advising them that they may want to consider having the procedure done at a different provider facility than the one where the test is to be performed.  The reason for changing facilities is summed up as follows:  “Did you know that the other facility is less expensive?”  That might have been okay as a public service announcement, but when the insurance company representative continued to press the patient to make the change, even offering to help have it rescheduled, the line between reason (okay maybe I should consider less expensive) and rights (don’t I have a right to choose my provider—especially since it was an in-network provider) seems to have been crossed.

This representative while arguing the virtue (and I mean arguing) of less costly really meant the insurance company would pay less to the second provider.  However, when asked about the out-of-pocket expense difference to the patient by choosing the alternate provider—the representative exclaimed they didn’t know.  In fact, the out-of-pocket expense would have been the same for either provider (in this particular case).  And if an out-of-network provider was chosen, it would have been in fact a larger patient expense; although one provided for as part of the coverage selection afforded by the choice of the plan.  What was missing from the representative’s telephone script was the fact that by choosing the original provider, the patient had selected the same provider where previous tests were already on file, and readily available to the ordering physician (who also was affiliated with the initial facility).  Perhaps not having that information was a HIPAA protection; but the entire episode lacked any concern for continuity of care, patient choice, or care management.

In Scenario #2, the patient was scheduled to have a second knee replacement procedure.  While listening to a commercial (Sy Syms would have been proud), the patient learns that the company was now advertising its new “30-year knee.”  The patient asks the orthopedist if the “30-year knee is being used,” and learns that a “15-20 year knee” was instead being used.   When asked about getting the “30-year knee,” the patient learns that the hospital refused to approve the more costly 30-year knee.  Which raises these questions: “So who’s getting the 30-year knee?  Was the decision based on the patient being too old—although not too old to be gladly admitted for surgery?  The patient is outraged, postpones the surgery, and writes a letter to the hospital’s Board chairman.  Even at age 65 (and still working and covered by a company insurance plan), why should the patient settle for a knee that might have to again be replaced at age 85, when the likelihood that they could well live beyond that and not have needed one until age 95 (perhaps less likely—but certainly sets the stage for a 85-95 year possibility)?

These two cases have a lot in common, and makes you wonder how many different assaults on an individual’s choice there will be.  I’m okay with an insurance carrier letting its patients know there are less expensive alternatives.  What the representative didn’t tell the patient is that their payment to the providers for the PET/CT scans noted above actually differed by only about $50.00, and of course was not even aware that the patient’s out-of-pocket cost was unaffected by the choice in provider (although if there was a coinsurance provision—the approved payment level would have mattered).  So who actually would have saved money in this case?  The answer:  the insurance carrier.

With regard to the knee, the patient really needed to know what type of knee the doctor was going to use in the first place (try thinking about putting a less expensive tire on your car).  It’s too bad the patient needed to learn of the difference from a commercial, but it’s been said that Gen X, Gen Y, etc., often get their news through social media.  In this case, it helped a senior know beforehand that another option was available.  The bottom line—is the bottom line.  And in both cases, it wasn’t so much the cost—but the profit margin associated with the procedure.  It gives new meaning to: Caveat emptor—let the buyer beware!

Allan DeKaye is the author/editor of The Patient Accounts Management Handbook (Aspen, 1997), and is presently developing a new book entitled: My Medical Bills are Killing Me©.  He is also a member of the WKLB Healthcare Editorial Advisory Board.

Contributor’s Corner: Charges Really Do Matter; Just Ask Me!

Health Wolters Kluwer Law & Business will periodically feature posts from outside contributors who are members of our Advisory Board. Today’s post comes from Allan P. DeKaye, MBA, FHFMA.

There’s been quite a hoopla over the recent report of the disparate range of charges to Medicare for some of the most common procedures and medical conditions.  It’s been covered and reported in most healthcare news services and journals—and even in the mainstream media.  It follows on the heels of the Time magazine issue devoted to this subject a few months ago. This topic shouldn’t come as a surprise to most healthcare professionals.  It’s been there ever since the Medicare provision related to the “…lesser of costs or charges…” was established that led providers to be sure that their charges exceeded costs to maximize reimbursement paid for the cost of care.  Suddenly now, the collective conscience has been awakened to raise awareness.  Some will argue that DRG payments will neutralize these excessive charges, and even that payers may only pay UCR (usual, customary and reasonable) charges regardless of the bloated charges levied for procedures.  Hey—but wait a minute—what about me—it’s costing me more!

 Yeah—a lot more—and for patients with Medicare Part B (physician and outpatient services) coverage, and especially anyone who has seen their out-of-pocket costs rise with now having to pay “coinsurance” amounts—that is a portion (usually a percentage) of the (approved) charges—not just a copayment and/or a deductible will find little solace is the industry speak of DRG payments and negotiated rates.  No longer is it just the $15 or $25 copay—it could now be $30, $45 or $50 or more per service.  But it’s the 10%, 20% (or more) of covered charges that adds an unknown amount to a patient’s bill.  We (especially those healthcare professionals likely to read this blog) might simply shrug off the increased copay amounts—or even the higher premium costs employers have been passing along to employees.  Just wait—it could be you having to pay an amount you never ever knew about.  After all, when was the last time you (or one of your organization’s patients) asked how much the MRI or CT scan that is needed costs?  How about adding the cost of the contrast, too?

 The literature is replete with having consumers (read patients) becoming more educated and involved in their care decisions knowing more and asking the right questions to help bend the cost curve.  High-deductible health plans should help—right?  Wrong.  However, consumers, now patients, will learn that an MRI or CT scan will very quickly use up the $2,500 high deductible, and may also trigger a coinsurance amount due, as well.

The consumer has a much better choice shopping for a new car than for a needed healthcare procedure.  Let’s face it, you can go to two or more dealers (even online) to comparative shop:  add leather, moon roof, GPS, etc., and receive competitive pricing.  Try that with an MRI, CT scan or other procedure.  Many hospitals still can’t provide reasonable or accurate cost estimates.  And you’re not likely to consider anesthesia to be an “optional” add-on for a surgical procedure.  Uninsured patients will have even fewer choices, and are likely to rely on neighborhood hospitals, especially those with a municipal or safety net status for the care they need.

 If you’ve not experienced these situations firsthand, ask an elderly friend or relative with Medicare Part B coverage.  Chances are they’ve had a recent procedure.  For example, two different MRIs at different providers may have had $2,000 and $2,200 charges respectively (as an illustration).  If the covered charges were $1,600 and $1,800, respectively, then the 20% Medicare Part B coinsurance would have resulted in either $320 or $360 in out-of-pocket expenses.  That’s a difference most seniors would have felt and certainly noticed.  Multiply the out-of-pocket cost by the number or complexity (read cost or charges) seniors are likely to have, and you’ll see that the outrage needs to be more vocal. 

 But wait a minute-it’s anybody with a policy that has a coinsurance provision—not only seniors.  I’ve already felt it–and it could be you, too.  So the next time the conversation of charges and disparity comes up, don’t focus on only the margin—but the care delivery mission to the community and improved customer (patient) understanding, too.  Bending the cost curve can start with providers taking a hard look at (and begin lowering) the charges for the care they deliver!

 

Allan DeKaye is the author/editor of The Patient Accounts Management Handbook (Aspen, 1997), and is presently developing a new book entitled: My Medical Bills are Killing Me©.  He is also a member of the WKLB Healthcare Editorial Advisory Board.