Tuesday, April 11, 2006

High Deductible High Jinks

As health insurance costs skyrocket and more people turn to high-deductible policies, a key question is emerging: When you're paying out of your own pocket, what rate do you pay?

Is it a discount negotiated by insurers, or the provider's gross charges, which could be several times higher than the negotiated rate?

Such is the tale of an uninformed policyholder, and an equally uninformed reporter.

Case in point: Lisa Stamm of Kendall, who had a simple earache and got slapped with a $375 bill for about 10 minutes with a nurse practitioner. If she had no insurance, she could have paid $125. If she had a no-deductible policy, her insurer might have paid about $140, and she would have paid nothing.

But Stamm showed the receptionist at ER Urgent Care Center on SW 137th Ave. her Cigna insurance card, and that sparked the problems.

ER Urgent Care insists she cough up the full $375. ''We as consumers have to make our choices,'' said Trudy Herdocia, the firm's vice president of operations. ``And live by them.''

With a high deductible health plan, the consumer should NEVER pay a provider on the spot for services rendered. The exception is for prescription meds.

''The theory is patients will be able to negotiate with providers,'' says Gail Shearer of Consumer's Union in Washington. ``But the theory doesn't always translate into practice. She was concerned because her ear hurt. Negotiating a rate was not at the top of her list.''

WHOSE theory? I never tell my HDHP (high deductible health plan) clients to negotiate with providers. It defeats the purpose of having the plan and is counterproductive.

But wait, there is more to the story.

It turns out that ER Urgent Care Centers are not in the Cigna network, and the firm had paid nothing on her bill because she had not met her out-of-network deductible.

This was a non-emergency visit to a non-network provider. The result is the highest charge allowed and the least credit towards satisfying the deductible.

Stamm checked with Cigna and received an explanation of benefits, one of those ''THIS IS NOT A BILL'' statements most Americans ignore. The EOB stated: ``Billed Amount $375; Allowed Amount $375; Deductible/Co-pay $375.''

Most plans have dual deductibles. One deductible is for in-network charges; the other, a much higher deductible, is for out of network charges. If Mrs. Stamm were to ask for a year end total my guess would be somewhere around 60% of her $375 would be credited toward her in-network deductible.

But the problem is worse.

The code on Stamm's bill is 99245. According to the billing codes developed by the American Medical Association, this number is for a consultation requested by another physician or source.
It involves taking ''a comprehensive history, a comprehensive examination and medical decision making of high complexity,'' according to the AMA's Current Procedural Terminology coding manual. ``Physicians typically spend 80 minutes face-to-face with the patient.''

The procedure at the doc-in-a-box was upcoded, a practice that allows a provider (who gets away with it) to demand a higher than normal reimbursement. One thing I recommend to clients, especially on bills that are significant, is that they engage the services of an independent auditor for reviewing the claim. Depending on the complexity of the bill, a fee of $100 - $300 to an independent auditor can save thousands in out of pocket expenses.
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