June 1, 2008 | By LORA HINES | The Press-Enterprise
State officials, hospitals and doctors are locked in a dispute over whether some patients can be charged if they are taken to an emergency room outside of their health care network. For some, that bill can be a couple of hundred dollars, but for others it can reach into the thousands.
The ban proposed by the California Department of Managed Health Care would affect members of HMOs, such as Kaiser Permanente, not members of other kinds of insurance plans. The department only regulates HMOs. Administrators and hospital-based doctors say the state should be targeting insurance companies.
Statewide, thousands of people get pressed for payment by doctors and hospitals, typically after they are taken to an emergency room outside their insurance plan. Doctors and hospitals that think health care plans and insurance companies have shortchanged them on payment for treatment then try to make up the difference by going after patients who already paid their share. It's called balance billing.
Karla and William Gledhill, of Chino Hills, understand the practice well.
The couple got hit with a $53,000 bill from Arrowhead Regional Medical Center in Colton after their insurance company, Anthem Blue Cross, paid about $25,000. Their 16-year-old son, Ryan, was flown to the hospital after a serious dirt bike crash in Lucerne Valley.
Karla Gledhill said she racked up late-payment fees and bill-collection threats as she repeatedly wrote letters and made telephone calls to the hospital and insurance company. Last week, the insurance company agreed to pay the bill.
Gledhill said she thought she would have to hire an attorney, which sometimes is a patient's only recourse, hospital officials say.
The hospital and insurance company said privacy laws prevented them from commenting on the family's claim.
"You don't know anything about balance billing until you're stuck in the middle, trying to hammer out what's right," Gledhill said.
Balance Billing
More than 1.75 million insured Californians who visited emergency rooms in the past two years were asked to pay more, even after their co-payments and deductibles, according to the California Association of Health Plans. The professional organization represents 40 health care plans that cover an estimated 21 million Californians.
The average balance bill was $300, which added up to about $528 million that patients spent in addition to their co-payments and deductibles, the association said. More than half of the patients who were balance billed paid.
"The practice needs to be banned, period," said association spokeswoman Nicole Kasabian Evans. "The patient shouldn't be placed in the middle. That's what the insurance companies and health care providers are doing."
In July 2006, Gov. Schwarzenegger ordered an end to balance billing after he realized many residents were being charged for medical expenses they didn't owe, said Cindy Ehnes, director of the state Managed Health Care Department. But the department couldn't come up with a suitable solution to HMOs and providers, she said. So, the department decided to merely ban the practice.
"We have tried many other approaches to solve this problem," Ehnes said. "We have decided to go back to our first job, which is to protect consumers."
Ehnes said she had hoped lawmakers would have passed legislation regulating balance billing. At least seven states have balance billing laws, including Colorado and Florida. Meanwhile, state Sens. Don Perata, D-Oakland, and Leland Yee, D-San Francisco, have introduced balance billing legislation.
HMO Vs. Hospital
The ban comes as Kaiser, the state's largest HMO, got a temporary restraining order earlier this month from Los Angeles County Superior Court against Prime Healthcare Services Inc., of Victorville, to stop it from collecting money from thousands of Kaiser patients or reporting them to credit agencies. A hearing is set for Thursday.
"This has been an ongoing dispute for a year or year and a half," said Dr. Ben Chu, president of Kaiser's Southern California region. "... They threatened to trash their credit ratings if they didn't pay."
Earlier this year, Prime Healthcare sued Kaiser, claiming that Kaiser owes $25 million for its patients who were treated at eight of Prime Healthcare's hospitals, including Desert Valley Hospital in Victorville, Chino Valley Medical Center and Montclair Medical Center.
Prime Healthcare attorney Michael Sarrao couldn't be reached for comment.
Prime Healthcare has accused Kaiser of delaying payments by repeatedly demanding patient medical records, claiming that care provided was unnecessary and requiring transfer of members to Kaiser hospitals.
Chu disputed the claims.
"It's not about delaying payment," he said. "It's about substantiating claims."
Calculating Health Cost
Dr. Richard Frankenstein, president of the California Medical Association, said the organization, which represents 35,000 doctors, will fight the state Managed Health Care Department's ban.
"They ought to be regulating the insurance companies, not the doctors, which it does not have the authority to do," he said. "We see this as a $500 million transfer from patients to insurance companies, and the insurance companies aren't paying the bill."
On average, Frankenstein said, insurance companies pay all but about $30 of a doctor's bill.
"If that doctor sees 50 to 60 patients, that $30 does add up," he said.
Some specialists may not work on-call emergencies if insurance companies refuse to pay and they can't bill patients, Frankenstein said.
Frank Arambula, Arrowhead Regional Medical Center's chief financial officer, said the hospital compares its costs to those of other facilities, which are reported to the California Office of Statewide Health Planning and Development. The data are posted on the agency's Web site.
"We set our rates based on market-driven prices," he said. "We think it's a fair assignment and the payer is going to pay those charges."
Conversely, insurance companies rarely show patients and health care providers how they determine what to pay for service, Arambula said.
In a written statement, Anthem Blue Cross spokeswoman Peggy Hinz said the company reimburses out-of-network hospitals for what it considers reasonable and customary costs. It is changing its reimbursement policy to protect members who require emergency care, she wrote.
"It was not the intent of our reimbursement policy to increase out of pocket expenses for our members, who do not have a choice in selecting the place where health care services are performed, such as in the case of an emergency," Hinz wrote.
Anthem Blue Cross bases its reimbursement rates on factors including submitted charges for payment, comparisons of charges for services offered at other hospitals, and service costs that are reported to the state, Hinz wrote.
Fighting the Bill
The Gledhills didn't care whether Arrowhead Regional Medical Center was in their Anthem Blue Cross preferred provider organization network. Their son needed surgery on his pancreas.
"Worst case, we thought we would owe $6,000," said Karla Gledhill, whose husband owns a small Anaheim business.
Anthem Blue Cross first determined the Gledhills owed the hospital $53,273.17 after it paid $25,121.28, according to a claim recap. It paid another $12,606.15 after Karla Gledhill complained to the California Department of Insurance.
The Gledhills still faced a $40,667.12 bill and no explanation of how Anthem Blue Cross determined what it would pay.
"How could I fight a fair fight if I didn't have all the information?" Karla Gledhill asked. "I didn't think Arrowhead's charges were exorbitant for the care my son received."
On May 21, Anthem agreed to pay the rest of Ryan Gledhill's hospital bill after the company "made a one time administrative decision to remit payment," according to the letter the Gledhills received.
The letter did not include further explanation, and Hinz said privacy laws prevented her from offering one.
Reach Lora Hines at 951-368-9444 or lhines@PE.com
Online Help
California Office of Statewide Health Planning and Development: www.oshpd.ca.gov
California Department for Managed Health Care: www.hmohelp.ca.gov
California Department of Insurance: www.insurance.ca.gov
Showing posts with label Usual Customary and Reasonable. Show all posts
Showing posts with label Usual Customary and Reasonable. Show all posts
A look at the presidential candidates' health care proposals
Sunday, June 8, 2008
As candidates campaign for the nation's highest office, they make promises about reforming health care. Actually delivering on those promises can be another matter entirely.
A visit to the Cape Girardeau Senior Center revealed that most retired people there that day had Medicare and a supplement and were, for the most part, satisfied with them. Some have found they unexpectedly had to dip into their savings to pay for health care costs.
Brenda Hargrave, part-time administrative assistant at the center, has looked at the health care proposals from candidates John McCain, Barack Obama and Hillary Clinton. She said that while she has not yet decided whom she will vote for, she believes Obama has the best proposal.
But any real kind of health care reform will not come from anyone running for office, Hargrave said.
"While [Obama] addresses concerns, there are things going on that if they would enforce what they already have in place, the government would be out a lot less money now," she said.
Hargrave said she has 30 years' experience in medical billing, collecting and management. She has seen first hand where reform needs to take place, she said.
Health care reform, she said, should start with the "usual and customary rates," or UCR, established by Medicare and Medicaid. Medicare/Medicaid providers say they will pay 80 percent of an insured person's medical costs, but in fact pay an amount based on what they consider "usual and customary," often less than what a doctor or hospital charges. Physicians and hospitals write off the difference and recoup it from patients with private insurance or uninsured patients who are expected to pay full price for procedures, often in advance of being treated, Hargrave said.
"If doctors participate in Medicare they're not allowed to charge more than a certain amount. Some doctors refuse to take any new Medicare patients because they know they can't get any more money," she said. "They leave room on their schedule for other patients with private health insurance because they know they will get more money."
"Everybody needs the same UCR, whether private, Medicare, Medicaid or whatever. No insurance should be charged more than the UCR; UCR should be established across the board."
Better oversight on Medicare/Medicaid billing could save hundreds of thousands of dollars, Hargrave contends.
"I have personal knowledge of one Medicare patient who had a problem with Medicare," she said. "I kept billing, trying to get them to pay. When they did pay, they paid 20 times for the same office procedure. The money went in that patient's account as a credit. I was told not to return credits until somebody found them."
When she made one company aware of double billing for a one-time procedure, she said "nothing was done about it. That's why insurance costs are out of line."
Hargrave said more people should monitor their doctors' office billing procedures and codes and compare what is being charged with the work actually delivered.
"If we could get that done, then health insurance will be within reason and the government will have a lot more money," she said.
Hargrave said she would like to see part-time employees have access to the same insurance as full-time employees. For a semiretired person not yet on Medicare, the cost of health insurance leaves little money for other living expenses. Yet some companies, she said, will hire several part-time people to avoid the cost of providing insurance for a full-time employee.
Monitoring costs and codes would be frustrating and time-consuming for most people. Karen Riley of Cape Girardeau said she and her husband, Dean, are both on Medicare and have a supplemental policy. Both Medicare and the supplement pay for mammograms.
"I called Southeast Missouri Hospital to see if it is in the network," she said. "They said yes. But the doctor who read it was out of network. Since Jan. 15, both insurance companies are arguing over who is going to pay the bill. It has still not been paid."
Riley said she and her husband pay high premiums for their supplemental insurance, partly because she has a pre-existing condition. They dipped into their savings to pay for medical costs and insurance premiums after her husband, who worked at Southeast Missouri State University in the facilities management department, required knee surgery and retired early as a result. While he was working, the university covered the cost of his health care premiums. Until both qualified for Medicare, their monthly costs after he retired meant "we were paying money we could have spent on something else," she said. "It's got to stop somewhere. We can't keep on paying and paying and paying. You can save for retirement, but when you're saving you don't anticipate your medical costs going up and up and up."
Nor did she anticipate that just changing doctors would result in the second doctor asking for lab tests that had already been done not long before that, "so they can get more money."
Riley said she believes Clinton has the best health care proposal.
"She is saying lower premiums and give better quality insurance," Riley said.
Harry Floyd, a retired business owner, said he was considering dropping his supplemental policy because he could pay out of pocket for health expenses for less than his $145-a-month premium. His table companions urged him to keep it, saying they envied him that low premium and warning him that his medical expenses could go up drastically with one illness. Floyd is one of the few not adversely affected by health care costs. He said he supports Clinton because "she has the background. Her husband was president, so she knows a little bit about the ins and outs.
"I figure most wives know what their husbands do and she has a little insight."
Hargrave said that at whatever level health care reform comes, it has less to do with whomever is elected than with the person at the bureaucratic level chosen to implement and manage it. She said she told that to U.S. Rep. Kenny Hulshof when he campaigned at the senior center in his bid for governor.
"I told [him] if anybody is going to reform the health system, it needs to be somebody who knows what he is doing and knows what the program is all about, not somebody who donated money to a campaign," she said.
This article was printed in the June edition of TBY (The Best Years), a special publication of the Southeast Missourian.
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