Lessons in Healthcare 101

[43Hitman]

If it's not on locally, which they usually are. I'll go to Sharky's or The Playing Field where there is usually a big contingent of Steeler fans. Where is Glory Days? I'll have to join you for a game.

[Preacher]

Originally Posted by Indo

OK. So over the past year or so I have been reading all kinds of things on this forum regarding healthcare and it has come to my attention that there is a large misperception/misconception made by people who are not in the healthcare profession about how things "work". I have been wanting for some time now to begin this thread. So here it is.

I will, from time to time, post some information about what I think is a common misperception among the general population (those that are not involved in providing healthcare). Having said that, this will be the first Lesson in Healthcare.



LESSON ONE



It is a common misconception that doctors and hospitals charge different fees to uninsured patients, Medicaid/Medicare patients, and private health insurance patients---that they bill one amount for a service to the patient and a different amount to the insurance provider and that they bill different amounts to uninsureds, 'Care/'caid patients and private insurance patients.



This is simply not true. In fact, it is illegal for any doctor or health care facility to have more than one Fee Schedule. This means that you must charge the same price for any given service to everyone. I will use a simple example:

Let's say that a doctor provides a service to a patient (a hernia operation, for example). What is not understood by many people is the concept of Reimbursement. Years ago the doctor would send a bill to his/her patient for the hernia operation. It would generally take a lonnnng time for the doctor to get paid because the patients had to contact their insurance company; the insurance co. would then send the money to the patient and the patient would turn around and send it to his doctor. Then the insurance companies (who were generally lead by Medicare) said, "Hey doctors! Tell you what---you'll love this! We will do you all a favor and help you get reimbursed for the service you provided (the hernia operation) by taking the inefficiency in the system out of the equation. Instead of you billing the patient and then they will have to contact us and then we will send the $$ to them and then they will send it to you (whew!), How about if you just send the bill directly to us, and then We will send the Reimbursement directly back to you! What a great Idea!" On paper and in theory it was...but what it really was was a way for insurance companies and Medicare/'caid to control the amount of the Reimbursements. Over time the Reimbusements have gotten smaller and smaller---I bet you didn't know that there is legislation currently pending that will decrease physician reimbursements by 21.5% (that's right TWENTY-ONE percent. How many of you could take a cut in pay by 21%? Me either. But that's a discussion for another thread...)

Back to the example.

So theway it works is that the doctor signs a contract with each and every insurance provider (including Medicare and Medicaid) to become a Provider of that type of insurance---meaning he can accept patients covered by that type of insurance. In technical jargon, he "Accepts Assignment", or agrees to accept whatever amount of money that that particular insurance company will pay for any given service. Is everyone following?

In our example, let's say that Frank Jones needs a hernia operation and he has Insurance XXX. Insurance XXX will pay $65 (I'm using low numbers to make it easy) and ONLY $65.

However, Insurance YYY will pay $80. Yes, different insurance companies pay different amounts within the same state and ACROSS states. Insurance YYY may pay $80 in Pennsylvania, but they will pay only $70 in South Dakota. (Do you begin to understand WHERE healthcare reform needs to change these types of things---not the crap they are handing us?)

Medicare may pay only $78
(To put things in real perspective, Medicare pays $651.92 for a hernia repair in Philadelphia but it pays only $583.85 in the rest of PA at the time of this post)

Does everyone see the problem here?
A doctor (or other health care facility can have ONLY one Fee Schedule (how much he bills for any given service provided). As a doctor you MUST bill the uninsured, the privately insured, and the Medicare/'caid patients THE SAME AMOUNT. It is ILLEGAL to bill different people different amounts.

Now, here is where it gets a little confusing:
Insurance XXX pays only $65
Insurance YYY pays $75
Insurance ZZZ may pay $90
Medicare (in this example) pays $78

What happens if the doctor sets his Fee for hernia repair at $65, but the patient has Insurance ZZZ? He gets paid $65, because THAT IS WHAT HE BILLED. Insurance ZZZ is willing to pay $90. But the doctor billed less, so he gets paid less.

What happens if the doctor sets his fee at $110. The patient has Insurance ZZZ and they will pay (reimburse) ONLY $90. The doctor gets paid $90.
Can the doctor then turn around and say, "Well, my fee is $110 and Ins. ZZZ paid me $90, so I will bill the patient the difference of $20".
NO. HE CANNOT. Remember, he signed a contract with Insurance ZZZ to "Accept Assignment". The Reimbursement Assigned to the service of Hernia Repair is $90. The doctor cannot, per the contract, turn around and bill the patient for the differnce.

In order for a doctor to collect as much payment as possible, he sets his Fee Schedule slightly above what the majority of insurance companies pay (in reality, it turns out to be about 150% of the Medicare Reimbursement Schedule).

So, for this example, the doctor sets his Fee Schedule for Hernia Repair at $85

Frank Jones has Insurance XXX----the doctor will get paid $65
Tom Smith has Ins. YYY---the doc will get paid $75
a patient with Ins. ZZZ ---the doc will get the full $85 (and, in fact, he could have gotten as much as $90, if his Fee Schedule was higher---but he Cannot change it. He must have a set Fee Schedule which is subject to audit).

Now, a patient who is uninsured will get a bill directly from the doc.---$85 in this case. We'll get back to that...another time.

So,looking at a patient with Insurance XXX---it appears as if the doctor billed the Ins. co. only $65 because the patient receives a paper that tells them that the doc was paid $65. But it may also say somewhere on the bill that the fee was $85. It gets confusing and appears that there were two different fees billed. There were not. The Fee was $85. The Insurance company agreed to pay $65. The doctor was obligated to accept the $65, or he would get NOTHING.

Insurance companies TELL doctors and hospitals how much they will pay. The doc/hosp. either accepts that much or gets nothing. Period.

HERE ENDETH THE LESSON

discuss

Indo... It is interesting hearing it from your perpective, as I spent some time working for Humana health care in the claims department (Please, take time now to vomit, wipe off your mouth, get a glass of water and then come back at the sound of Humana. I had to do the same when I just typed it... twice! LOL, but that again, is the substance of a different thread).

EDIT: Indo, I am a bit pedantic at times, explaining things like provider vs. facility, EOB, Superform, etc., but that is for others who read my post.. I have a feeling you already know that stuff

From the insurance perspective, it looked a little different.

1. The doctor in state A (call it Florida) and State B (call it Pennsylvania) has very different costs. For instance. In Florida (I'm making up this case from bits and pieces of a few other scenarios that really happened, it'll be somewhat far fetched to make the point). A OBGYN has to pay 1/2 a million dollars a year for malpractice. However, in PA, that same doctor only has would have to pay 200,000 a year. Thus, just to be in practice, the doctor in Florida has to pay out 300,000 a year more. Now, add to that air-conditioning, heating, electric, etc. etc., not to mention taxes (or lack of) and there comes out being a very different price for the two. Thus, for the insurance company to allow the doc in PA to be the charged the same amount as in Florida is giving away unnecessary money to the doc in PA. That would drive up Insurance costs across the board, as the Insur. companies would have to raise rates across the board to cover their new exposure.

2. From the insurance prospective, you are absolutely right about medicare allowable, contracted amount, and assignment. However, there are significant games that are also played. For instance. A doctor will agree to a contract with a company. Then, when they bill, they will list out 7 different ICD-9 codes which all fall under the general office visit. They (and more than likely, their office managers--who usually are trolls that come out from under a bridge for 8 hours a day) KNOW that the office procedure is contracted under a single code, but they do it anyways for 2 reasons. 1. They STILL attempt to get paid beyond contract and 2 (and more than likely the usual reason), because they THEN use the rejected amounts as leverage to demand better payment next time, stating that they have not received as much as they "thought" they should have.

3. The raising of the amounts to 150 percent over medicare allowable is usually a ruse by most doctors in a given area two drive up what the insurance company will pay. Then, when the insurance companies all start to increase the moneys, the doctors go to medicare and demand medicare allowable be raised, since they are having to accept payments that are 70,80, 90 percent below what they normally charge. Medicare allowable then changes. What happens next? doctors up their prices again to 150 % of medicare allowable in order to create the next wave of price increases.

4. Threatening the patients (This one is sometimes doctors, but more often than not it is hospitals. When it is doctors however, it is again usually the trolls known as office managers). Providers and facilities usually could care less about questions of payment. If they are not paid what THEY think THEY should be paid, one of the quickest and biggest threats is to send a nasty letter to the patient informing them that it will be turned over to collections, thus threatening their financial future (by hurting their credit record). This is done because the Greedy Trolls don't know how to read a contract nor do any kind of followup themselves.

Here is a common scenario. Mary goes to the hospital with a broken leg. While at the hospital, she sees the doctor, gets an X-ray, and then has a cast put on it. She then goes home. Mary now gets anywhere from 2-4 bills. One from the E.R. doctor, one from the facility (the hospital itself), and one from the specialist who had to set her leg (It was a particularly nasty fall). The specialist sent the bill on a Superform (hospital billing form). Because the facility has already billed and been paid, the Superform from the specialist has been rejected, the Greedy Troll back in the office, instead of working out herself, sends a bill directly to the patient. The patient calls the insurance company and rips the insurance company a new one. ME! on the other end of the line says, "Nope, they billed on the wrong form and it was rejected. They just have to submit it on a provider bill.

However, a month goes by, and no bill is submitted. Instead, the patient gets ANOTHER letter, this one threatening to turn the bill over to collections. Now the patient is Irate. Mary (patient) doesn't want her credit hurt, so she PAYS THE BILL! (Yes, it happens a whole lot). THEN, a billing specialist FINALLY gets around to billing the insurance company. The company pays, and the doctor double collects.

Because these payments that go out are 2000 to 50,000 dollars payments and include 10 to 300 cases at once, no one bothers going back and looking, and the doctors double collect... OR, the patient calls back when they get thier final EOB (explanation of benefits), and NOW are TICKED that the insurance company paid the doctor instead of reimbursing THE PATIENT.

________

I could go on and on, but from the insurance side, their are horrible things wrong with how the doctors do business. In the EXACT same way, from the doctors side, there are horrible things wrong with how insur. companies do business. And BOTH of them get screwed over by the govt.

I absolutely agree that healthcare needs to change. This system is broken. BUt I also think you would agree with me that it is broken more from govt. interference than from anything else (Except ignorant lawsuits).

[steelax04]

Originally Posted by 43Hitman

If it's not on locally, which they usually are. I'll go to Sharky's or The Playing Field where there is usually a big contingent of Steeler fans. Where is Glory Days? I'll have to join you for a game.

Take Pump Road south, make a right on Ridgefield Parkway and its in the first shopping center. They have some killer cheese fries. I take in at least 3000 calories each game I go there. Lucky for me I was trying to stay in shape for the Monument Ave 10K and worked them off. One game they had to put the Steelers on the projection screen over the Redskins because there were so much B&G.


Ohsnap... sorry for the hijack... proceed as you were.

[tony hipchest]

Originally Posted by 43Hitman

Actually it's still a bit swollen and is very stiff most of the time. Kinda painful to bend it still. .

i have the same problem with my wang.

This happened in January too. I am not sure if this is normal, but I can't afford to go back to that specialist. It's too expensive right now

my grandpa taught me a great home remedy-

"you need to soak it in cider".

if it works for my wang it cant be bad for your finger.

[43Hitman]

Originally Posted by tony hipchest

i have the same problem with my wang.



my grandpa taught me a great home remedy-

"you need to soak it in cider".

if it works for my wang it cant be bad for your finger.

lol, I knew after I posted that, that someone would jump all over it.

[steelax04]

Originally Posted by tony hipchest

i have the same problem with my wang.



my grandpa taught me a great home remedy-

"you need to soak it in cider".

if it works for my wang it cant be bad for your finger.

Only Tony hijacks a thread by mentioning his wang...