The Smart Medical Shopper

The Smart Medical Shopper

Kyle C. Akers, M.D.

Tuesday, July 16, 2013

     We have the best medical care in the world, bar none.  Unfortunately, we have the most confusing, convoluted method of charging, pricing and paying for it that one can imagine.  Our medical care financing system is unlike any other sector of the economy or industry in the country.  This mixed up system leads to frustration, anger and sadly ultimately to ObamaCare.  The misnamed Affordable Care Act is not about medical care and certainly has nothing to with affordability.  We have the best doctors, hospitals, medicines and technology available.  ObamaCare is all about payment and it is the worst possible solution to come down the pike so far.  What we need is less government regulation, top down control over pricing and payment for medical care and more simplified, streamlined common sense interaction between doctors, patients and insurance companies.

      The current coding system for diagnoses and procedures which drives charges is a monopoly owned by the American Medical Association and is its largest source of revenue, given that only about 13% of physicians are members of this fading organization.  Medical charges are essentially driven across the industry by the Medicare tables of allowable payments.  This cobbled together system sets up a one-size-fits-all approach that tries to shoe-horn everyone into one payment system using the ubiquitous Medicare HCFA billing form, whether it works for individual doctors and patients or not.  Couple that with all of the different discount arrangements between insurance companies and doctors and you have a recipe for disaster and ever sky-rocketing costs.  No one knows what anything really costs.  In reality the same procedure can cost many different amounts for different insurance companies and patients.  Doctors have no idea what things cost and patients have no idea what charges they are incurring at the time of service, what insurance is going to pay or what discounts are being applied.  They only find out weeks or months later when they get an unexpected bill for their portion that insurance didn’t pay.  You would never buy a car that way.  You don’t buy anything else that way.  Would you let someone else pick things out for you, don’t tell you what they are costing you and after all is done send you a bill months later expecting you to pay for them?  Of course not.  Even attorneys meeting with a potential new client will explain what their hourly rate is, what the retainer will be up front and estimate what the whole cost will ultimately likely be.  All before the client pays a penny or commits to anything.  I once spoke with my doctor about my annual routine wellness laboratory work.  My insurance company pays 100% once a year for those tests.  He had no idea that if his office did not code the visit correctly, for a routine annual physical exam, then I would be liable for the full cost of the lab work.  Additionally, he was shocked that the cost of that lab work would be $600.00 out of my pocket (and actually it should be about $150.00 if you look at the actual real cost).

     Now, obviously in a medical emergency stopping to discuss fees and costs and options is not really feasible, but these situations account for a very small fraction of most people’s interactions in the medical system.  The vast majority of the time it would be possible for the physician to have a discussion with the patient about fees, costs and less costly options prior to committing to treatments and incurring expenses.  Unfortunately, right now doctors have no idea what those costs are.  They usually assume that insurance is going to pay everything, not realizing that their ordering decisions may incur hundreds or thousands of dollars in unexpected out-of-pocket expenses for their patient.  And the patient won’t even know that until weeks or months later. 

     Medical billing statements result from the coding employees at the doctor’s office reading through the doctor’s notes and trying to find the best fit diagnostic codes and procedure codes to reflect what was done.  This then drives the charges.  There is actually a lot of wiggle room in how these things get coded and what the ultimate charges wind up being.  Sometimes inadvertent mistakes are made, coders are only human.  Things get coded incorrectly or things get coded that never actually happened.  It’s not intentional fraud, just honest mistakes.  But these mistakes can cost you hundreds or thousands of dollars.  It’s funny, we will stop a clerk at the grocery store if the scanned price of an item does not reflect the $1.00 off sale price in order to correct it but we have no idea if the medical bills we get are accurate.  If you don’t get detailed, itemized statements and carefully review them, you just wind up paying these incorrect charges.  Many billing statements, particularly hospital bills only show the total owed, not the minute detail of the individual charges which comprise the total.  Always request and review detailed statements before making payments and ask questions if you’re not sure about specific charges.  Because of this slow, mixed up payment system doctors and hospitals routinely have patients sign forms (among the myriad forms one signs when checking in) agreeing to pay any charges not ultimately paid by the insurance company.  Wow!  How cool for them.  Why would anyone in their right mind sign such an agreement which could encumber you with hundreds or thousands of dollars in charges months down the road but you have no say or input at the time the charges are incurred?  You are generally not informed or asked to approve of the cost of things that are being ordered and done on your behalf at the time they are happening.  And let’s face it, most people are not medically savvy and are rather intimated by the people and process going on in a doctor’s office or hospital.  They might be sick or injured and not really thinking about cost at that moment.  Or it might be a routine visit, but people tend to trust the doctor and not question what is being done or inquire about the cost or less costly options.  It’s sort of like the restaurant menu that says “Market Price” next to the lobster.  Would you order the lobster without inquiring as to the “Market Price” today for the lobster?  No, of course not.  Doctors and hospitals should post their fees and prices on menus on their waiting room walls for all to see.

     Now let’s not leave insurance companies out of the discussion.  Has anyone read a medical insurance policy cover-to-cover lately?  I didn’t think so.  It’s sort of like a mortgage contract.  No one actually reads those things before signing them.  And if you did you wouldn’t understand it.  It’s the same with medical insurance policies.  Try wading through the individual deductibles, family deductibles, co-pays, co-insurance, in-network/out-of network, discounts, tiered prescription formularies, maximum annual out of pocket (and what ACTUALLY is applied to that and what is not, you will be surprised) and all of the exclusions and exceptions.  If that’s not bad enough, try figuring out in July where you are for the year in all of that.  Yikes!  It’s virtually impossible to know before a procedure or test just exactly how much the insurance plan is going to pay and how much you will be getting a bill for in several weeks.  Don’t think that your co-pay is going to always cover your financial responsibility for an office visit or procedure.  It depends on exactly what is done.  An in-office steroid injection might be covered or not, partly or in whole.  Doctors typically don’t discuss that with patients before doing the injection.  Their office might contact your insurance company for prior approval or not.   You will probably not know.  Even if they do, they may not tell you anything before the injection.

     So what is the average, medically uninitiated patient to do?  Well, until the medical industry realizes that it must start acting like every other business and post and discuss its prices before charging people for things, the patient must act proactively and aggressively to avoid incurring enormous surprise charges weeks or months down the road.  Here are some tips to help keep you in control of your medical costs: 

•  Make sure you understand your insurance policy.  Ask your carrier for a clear summation page of your benefits, co-pays, co-insurance, maximum annual out-of-pocket cost, individual/family deductibles, in-network/out-of network details, in-patient vs. out-patient tests and procedure costs, annual wellness/screening 100% covered expenses, pharmacy details/co-pays, exclusions and exceptions. 

• Ask your insurance carrier to provide a way (online dashboard) for you to quickly and accurately check where you are in your expenses in all of the various categories throughout the year. 

•  Ask your insurance carrier for a quick, easy way for you (and doctors/hospitals) to check on covered charges and what your potential liability portion would be before authorizing any tests, treatments, medications or procedures.

• Request that doctors/hospitals contact your insurance company and pre-authorize anything beyond your co-pay and discuss that with you before it is done.  If necessary, you contact the insurance carrier.

• Discuss the cost of any and all procedures, tests, treatments or medications that your doctor wants to order for you prior to agreeing to them.  Discuss the possibility of cheaper alternatives or just waiting a while if possible.

• Always ask your doctor to choose generic medications or cheaper alternative medications when possible.

• When checking in at a doctor’s office or hospital, give them a note that you have signed and dated informing them that you will only be financially liable for charges (particularly beyond your co-pay) that have been discussed with you in detail prior to you authorizing those things that incur the charges.  Don’t sign blanket statements that you will be liable for any charges that your insurance company does not pay.  Have them (and/or you) contact the insurance company for clarification/pre-authorization if necessary.

• Always ask for a detailed, line-item billing statement; not just a total bill due.  Review the bill for accuracy.  Get someone who is medically savvy to help you if necessary.  If you don’t understand something, ask the provider for clarification.  If you think there is an error, speak up!

•  When communicating with doctor’s offices, billing offices, hospitals and insurance companies about charges, bills and disputes; always get everything in writing.

• When communicating with billing offices about charges, bills and disputes always copy your insurance company and your employer HR/Benefits office (if you have employer provided medical insurance) on all correspondence to and from the billing office.

• If you think a charge is way out of line, do some research.  See if you can find what the actual cost is and what other places are charging for similar services or products.  Ask for a price match; Wal-Mart will price match, why shouldn’t doctors and hospitals?  These medical people are in business after all.  Let them know there is some competition for you business out there and you’re willing to go where you can save money.

• Ask doctor’s offices and hospitals not to share any information of yours (even non-identifiable generic information) with anyone other than your insurance company.  Not with any private company or any government agency; local, state or federal.

• Unless required by a federal program such as Medicare or Medicaid, do not use your social security number for identification and do not give your number to doctor’s offices or hospitals.  If you ask them to use an alternative form of identification they must comply.  Similarly, let your medical insurance company and employer HR/Benefits department know that you will not use your social security number for medical care identification purposes and you do not permit them to use it.