Posted on 02/15/2020 5:37:30 AM PST by Kaslin
Private health insurance companies routinely deny legitimate medical claims. Most denied claims for doctors are for in-network (so-called “contracted”) services. In these cases, patients never see a bill, and the doctor must separately try to resolve the dispute with the insurance company. For out-of-network (“non-contracted”) claims, however, the doctor is required by law to send the patient a bill while trying to resolve the billing dispute. Most of these denied claims are for legitimate emergency services. They are simply routine claims, not exorbitant or outlier charges as some folks lobbying for the insurance industry would have you believe.
Don’t take my word for it. Consider recent comments from former health insurance executive Wendell Potter, who spent more than 20 years working for the giant health insurance companies Humana and Cigna. He explains the real cause of surprise medical bills. According to Potter, “It’s because of a scheme quietly hatched by insurance companies like the ones I worked at, where they decide which hospitals and doctors to include in their networks. They make these choices based largely on what will maximize profits and minimize care.”
It’s no wonder then that health insurers are making record profits. For example, UnitedHealthcare, UnitedHealth Group’s most profitable division, generated more than $10 billion in operating earnings last year. What’s even worse, health insurance chief executives are being compensated approximately $20 million per year (at the 10 largest health insurance companies), and at the same time private doctors are closing their practices at a record pace. This is troublesome from a cost perspective, too. Numerous recent studies have clearly demonstrated that when private doctors are forced to work for hospitals, health care costs go up significantly.
Health insurance companies are pushing for a law that would allow them to just pay a fee of their choosing, their “in-network” fee. This rate setting would drive private doctors out of practice even faster and cause more health care consolidation. The in-network rates aren’t negotiated by doctors. They also don’t reflect what doctors are really paid, because hospitals share their own fees with their employed doctors and pay them at a much higher rate. While the new House Ways and Means Committee surprise medical bill legislation, the Consumer Protections Against Surprise Medical Bills Act (H.R. 5826), is a step forward, it still contains a negotiation provision that ties payments to the in-network rate. That type of price control never works, and it will destroy our health care system. Yet health insurance companies are pushing for this huge handout, because it will allow them to dictate the price of treatment. One doesn’t have to be an economist to know that rates in a market like health care are in flux. That’s why this rate setting won’t work.
The solution to surprise medical bills is to have health insurers start paying the bills fairly if they are consistent with what other non-contracted doctors in the area are charging and being paid for those services. It’s that simple. That would be achieved through a fair negotiation process like the one that was set up in the landmark New York State surprise medical bill law of 2014.
Again, don’t take my word for it, but instead look to the recent comment from the New York Health Plans Association (NYHPA), the association that represents, yes, health insurance companies statewide. On the New York law’s method for resolving surprise medical bills, the Association states, “The current Independent Dispute Resolution process has worked well, ensuring that reimbursements for emergency services are fair and reasonable while holding individuals harmless.”
I couldn’t have said it better myself.
Access to care will be restricted, insurance premiums will go up, and many doctors will be forced to shut their practices if Congress goes down the rate setting rabbit hole. A level playing field is necessary, and the right way to do that is to implement a fair resolution process that holds health insurers accountable. At the end of the day, they must understand that we, as patients, won’t let them coerce Congress into passing devastating legislation to address surprise medical bills.
“The contract between doctor and insurance carrier means the doctor cannot balance bill.”
But it’s attempted anyway and too many people just pay it without questioning it. I’m afraid the HMO is going to go away as the doctors are aware of what they are losing and there is a steady amount of “paying” patients so they don’t need the guaranteed patient anymore. The offset cost cuts into their vacations in Tahiti I guess.
rwood
If the patient owes 20% of the bill (80%/20%), is it 20% of the insurance contracted price or 20% of the whole bill?
No, it's not that simple! When I get a medical bill related invoice from my medical or dental insurance company, it typically shows the amount the provider billed, the amount the insurance company paid and the the amount the provider accepted for payment, which is usually the same as the amount the insurance company paid. This would suggest that the insurance companies plays a role in keeping medical costs down.
Some of the many things I don't understand is the game of over used medical codes and the providers (doctors) insisting on multiple visits when one will do.
It's all about the money! Doctors want as much as they can get and insurance companies want to pay as little as possible. The latter should serve to keep premiums downs and their profits up.
Insurance companies are licensed and governed at the state level.
I believe open and fair open-market competition is the answer to most cost related problems. It would help to allow medical and dental insurance companies to compete across state lines. It would help to require providers to publish their prices for all services. It would help to require providers to give the patient a free estimate of costs "before" any service is given.
I’m currently in the middle of this same scenario right now. They sent the biopsy to an out of network. Really, they really couldn’t find an in network provider? Why do they do that knowing it’s going to piss off their customer-patients? Insurance has assured me that they will get it worked out and if I get a bill to contact them. I don’t blame the insurance for this.
For some time now I have been wondering about the question of the Bad Debt account
If the doctor bills the insurance company for $x and is paid only $y, there is a deficit of $z. When paying corporate taxes, one can deduct Bad Debt expense.
Does the Doctor expense the cumulative $z’s and reduce his corporate taxable income?
It’s 20% of the contracted price, also called the allowed amount. When you have insurance and go to a contracted doctor, you never have to worry about what the doctor charges (bills). They can charge outrages amounts. You only have to pay based on the allowed amount or contracted price.
The “bad debt” portion - as you put it - is actually deducted as a “contractual allowance” under both generally accepted accounting principles and the Internal Revenue Code. Any remaining unpaid balance is recorded as bad debt expense.
If you want to blame the real culprits, take aim at the Obams-RATs and your state legislatures. They are the ones creating public policy which is forcing carriers to sell an outrageously priced product, that isn’t actually insurance.
States without tyrannical regulations have the cheapest premiums and best coverage.
Bottom line: if you want to insure your good health....first you have to be in good health.
I advocate for a system based on baseball arbitration.
The Dallas Fire Department doesn’t want to be in-network for one of the largest insurance companies in the state and country? Fine. Let the city and the insurer each propose what they think would be a fair charge for the call (the insurer would have to pick at least its in-network rate, since it has already accepted that number as fair). The arbiter couldn’t split the difference, but would have to pick one of those two numbers that it thinks is fair. Limit the injured party’s liability to what would be the regular in-network co-pay.
Extend the process to all involuntary emergency services. Eventually the system would stabilize.
And a lot of that "bad debt" is from deadbeat payors like your state government. My state had a long standing $400 million debt to the hospitals...plus what Medicaid actually does pay, is often below provider costs. So they pad your bill. ($8 aspirin)
This practice, called "cost shifting"....should be made illegal.
My sister had to pay for the treatment she received for her broken arm. The insurance company said that it wasn’t an accident because when she fell down she stuck her arm out on purpose. This is not something that I am making up!
This is just bull shit! The insurance company does not decide!! They would love it if every hospital and doctor was in their network and would accept their fee schedule. But hospitals REFUSE the fee schedule and start to play hard ball. There is a ton of negotiation between carrier and hospital as to the fee schedule: insurance carrier wants to keep it low, hospitals want it to be higher. Both hospital and carrier want to maximize profits. But as fee schedules go up, so do the premiums you have to pay.
So we’ve noticed.....
Sounds like a clerical ‘coding error’.
ping
Thanks for that
Contractural allowance is likely the general accounting rmedy
That is why the medical industry is fighting to keep prices hidden.
If I can see that a procedure at doctor’s office A is twice that of Doctor’s office B, I am going to the best value.
Simply put, it is an illegal monopoly that no one really wants to touch, since they get massive amounts of money from the monopolies.
It will lead to socialized medicine. Similar situation with college costs. When you set up a predatory system, don’t be surprised when the prey starts thinking radical thoughts.
We are Medicare/Tricare Life total government controlled as hubby is a ret. SCPO of 20 yrs. Every year Medicare cost and Tricare co-pays go up, beyond our SS COLA raise. 7% this year on a 1.6% COLA RAISE.
The increase of tax deductibles which obama gave us leaves NO deductions other than the basic for short form. We don’t owe any debt. Other than utilities, house/car ins. cell phones and a zip line for the Computer, Property taxes. Had over $8,000 in out of pocket medical expense we couldn’t deduct. No vision, dental or hearing, unless it was Service connected as he has Flight deck hearing loss. We paid out of pocket for mine. My new lower denture doesn’t fit properly and it’s already been relined before I even got them. Between pulling the last 10 teeth, surgery for bone spurs, then Jaw reconstruction, cost as much as a full set of dentures or more. They will never fit, the lower jaw bone is deteriorating.
Not just insurance companies to blame doctors lawyers are all in the same boat with the same goal in mind to make money.
And have no shame in passing the blame.
Maybe that is how it is supposed to work, but that’s not at all how it is implemented. Balance billing happened in my case 100% of the time.
I will never forget the aggravation and stress of trying to recover from a major surgery and literally fighting with both insurance companies,hospital billing departments, and finally bill collectors about what everyone was contracted to cover and what everyone was contracted to pay.
Let’s just say that no one ...NO ONE... was helpful in my recovery process. It was so stressful that when the time came for my physical therapy to begin I told them to ‘GET THE HELL OUT OF MY LIFE AND HOUSE.’ Over a year later I still had bill collectors calling on some bills, told them to call the insurance company.
I haven’t seen a doctor since then. I pay for an insurance I will never ever use. And I have resigned that I will die due to inability to reasonably be able to use or access medical treatment.
Congratulations you greedy bastards. Don’t bother trying to save my life only to suck my soul right out of me. You killed many times over already.
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