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This is the story of Y.L., a patient stuck with an outrageous liability that is totally legal.
The charges are based on the contract rates between the health facility that rendered services and a major insurance carrier. The patient’s employer, a national bank, set those contracted rates.
While the patient is eager to pay her share, the excessive allowances she has been made responsible for prompted her to hire me as her patient advocate to negotiate them down.
Her story is the story of so many others in this country. A spotlight should be placed on these practices because they add to the burden of patients, companies and the health care system in general.
Consider the simple group of blood tests called the comprehensive metabolic panel. Usually reimbursed at around $15 to $20 by Medicare and commercial carriers, the panel is as commonplace as they come and is widely and easily performed.
Why, then, would the insurance company calculate an allowance of $808.99 in this case? Why would this hospital charge $1,244.60 for this test? Why would this patient be required to pay more than $800 for something the corner lab or doctor’s office could have run for 40 times less?
Next is the $42.02 allowance for one dose of Zofran, a common generic drug. The patient was billed $64.65 for one dose/unit, but the Medicare reimbursement is 16 cents, and the reimbursement of commercial carriers is a few pennies more.
This bill has more charges like these. Yet this hospital is inflexible, categorically refusing to even consider adjusting balances down or extend commonplace discounts that other facilities routinely offer to their customers.
Billing representatives and supervisors brandished “the policy” as a shield, while higher executives never responded to messages. The media department proved unable to accept phone messages and did not respond to online inquiries. An insurance representative even called to ask for a review and a possible discount, but both requests were rejected.
The sad truth reflected by this case is that self-funded employers, the ones with final decision about the benefits and reimbursements to be included in their insurance contracts, may not have much experience in setting those prices. Maybe they don’t understand the financial limitations their employees face. Maybe they don’t care because the company can afford such rates. Do all employees enjoy salaries that would allow them to cover such bills without a second thought?
Management should scrutinize such financial matters as long as employees must pay deductibles and out-of-pocket expenses. Linking contract rates for a self-funded group to those of the average contract in a specific state is often done. Calculating reimbursements based on published data, such as Medicare rates, is not an insurmountable task. As a longtime billing manager, I often noticed how unions and smaller, self-funded groups were well aware of all allowances on their plans. When money counts, one pays better attention.
In the end, I had to give up — for the first time ever. The Explanation of Benefits is a legal form, used to bill the patient according to the terms of the policy. There is no arguing that the facility acted within its rights.
The patient will now make small payments over 60 months. What is the cost of sending so many statements? What about burdening the books for five years? Would a “prompt pay” settlement not have saved operating costs? Would this not be a smart business move, embraced by many others?
I wish someone at that hospital had answered my multiple requests for a talk. I think the patient will follow through with sharing her story and exposing these practices, letting the court of public opinion rule. Good luck to her.