Recently I had a serious emergency; and, as a result, my urologist had to perform various procedures on me in the local hospital operating room. I'd give more details of all of that, but it's really not relevant to my question here.
It turns out that the doctor's bill for this came to $3576, out of which my insurance company has allowed a grand total of $316. I'm appealling this determination; which, under the circumstances, is nothing but absurd. But in the meantime, of course, I'm stuck owing a $3260 balance!
I honestly feel the doctor is, in fact, indulging in a bit of bill padding in this case, and I'd like to negotiate with him in an attempt to lower the bill. My idea is to ask him to accept what Medicare allows in my area for the procedures he performed. Now, the American Medical Association website has a service where you can input procedure codes and it tells you what Medicare will allow for the procedure. When I do that for the procedures my doctor has billed, I get the following output:
Non Facility $1965.87 Facility $592.12
Anybody know what this means? Does it mean Medicare would allow $1965.87on a doctor's bill and an additional $592.12 to the hospital (the facility where the procedure was performed)? Or does it mean they would allow the total of the two ($2557.99) to the doctor because he performed the procedures in a facility (the hospital)?
Any help on this would be appreciated. It would be good to know what I'm talking about when I bring up the issue of this bill with my doctor. Thanks.
Hopefully I can help...Medicare will allow $592.12 to the Facility since it was done there. It's all according to where the procedure was performed. If the procedure had been done in the Dr's office, then Medicare would pay for the non-Facility. I work at an insurance company and I'm not 100% positive of that, but that is what it sounds like to me. Is there a reason your insurance only paid $316? Was there pre-existing conditions involved? The amount doesn't sound right to me. So you have Medicare primary or secondary? If Medicare is primary, usually the other insurance pays what Medicare doesn't, leaving the member liable for only the co-insurance or copayment. But I'm not sure of the whole situation. Sorry if I only confused you
If the procedure was done in a facility, they would allow $592.12 to the physician. If it was just done in the office, then they would allow $1965.87 to the physician. The reason for this is because the facility would get reimbursed separately for the technical component (TC) which includes the cost of the room, equipment, supplies, etc.
If it's done in an office setting though, then it's billed with a global CPT Code which contains both the TC and PC components, which is why they would allow so much more. They give the doctor more for supplying the equipment, room, supplies, etc.
So if this doctor's bill came to $3576 then there might be some padding there but that's hard to say without knowing what specifically was done and the circumstances behind it.
$316 also does seem a bit low but that also depends on other factors. Was the physician in-network? What's your deductible/co-pay amount? Was that the contracted amount in-net or the R&C cut out of network? If you feel comfortable posting more info please do.
JWMC, thanks for your explanation of the two Medicare amounts; I was also able to confirm this with an administrator at another doctor's office. She told me exactly the same thing. So, it looks like if this bill were submitted to Medicare, rather than to private insurance, they would allow $592.12. My insurance company (FirstCare Blue Cross Blue Shield) stills seems low, but probably not as bad as I first assumed.
The procedures performed correspond to cauterizing a bleeding vein in the prostate; irrigating bladder and urethra to remove numerous blood clots; and inserting an irrigating catheter. These things were done in a hospital operating room on an emergency basis in the middle of the night (3 - 5 am). At the start of the procedures my urinary tract was completely occluded and the bladder significantly distended with fluid and blood. The emergency room officially evaluated me as being in a state which was a threat to life or to a vital bodily function. My doctor has submitted other charges for hospital care and evaluation of a complex medical situation which I'm not addressing in this post because they were more adequately compensated by the insurance company.
With the low allowance for this operating room work, I tend to believe the insurance company is attempting to "punish" an out of network doctor. This particular doctor redrew from all private networks about two years ago, telling me, but not in these exact words, that he was tried of being an indentured servant. Insurance companies don't like this to happen. If a significant majority of doctors redrew from the networks, the doctors would likely regain pricing power, thus threatening the companies. So, there is a struggle going on between doctors and insurance companies. The out-of-network doctor submits a high bill in an attempt to extract more money; the insurance company responds by punishing the doctor with a low allowance; and, of course, the patient is stuck in between these warring factions.
I personally feel that even the $592.12 Medicare figure is not really adequate in this case. Coming out in the middle of the night, losing essentially a whole night's sleep, and doing exacting work at 4 am with someone's life and well being in the balance deserves somewhat more, I would think. But, by the same token, it's tough to pay these sums out of one's own pocket. If I have to dig into my own pocket to pay my doctor a fair amount, what am I paying health insurance premiums for?
Last edited by Fulton99; 03-27-2008 at 08:01 AM.
Reason: change some wording
Medicare rates are abysmally low for some procedures. If a doctor had to sustain a practice on Medicare patients alone, they'd never make it.
It's still hard to say whose more at fault here, your carrier or the physician without being able to see what CPT Codes he billed, etc. There's a lot of coding issues that could be going on; if he submitted multiple surgical codes for instance, sometimes the primary procedure is paid at 100% and the rest are paid at a reduced rate, usually 50%. He could have unbundled and billed two codes when he only should have billed one, and your carrier could have denied the second code.
Just as hard to say is what your carrier's reasonable and customary rates are. Most companies use data from Ingenix, which is owned by UHC, to establish R&C. It's supposed to be an average of what doctors in your geographical region are billing for the same procedure, and then usually the R&C is supposed to be anywhere from 70 to 90 percent of that. As you might have seen in the news lately, Gov Cuomo in NY took 16 insurance companies to court claiming they were shortchanging doctors because the data was faulty. Whether your carrier was one of them or not I don't remember offhand. There's enough debate going on whether those numbers are truly faulty or if it's just an election year.
But R&C isn't meant to punish out of network physicians (or at least, it shouldn't be), it's there so one doctor can't charge $500 for a 15 minute office visit while his buddy down the street only charges $150. There has to be some limit, an average. If there was no R&C and carriers had to pay whatever number the doctors threw out there...if you think your premiums are high NOW...
Contracted rates for in-network physicians also vary widely depending on the HMO/PPO. Some are terribly low while others are really good. I see wide variations just with the different PPOs at our place. It's hard for physicians who don't participate with HMO/PPOs just because patients don't want to be stuck with OON costs (and in an HMO they have no choice but to stay in-net).
I think your best bet right now is to file a formal appeal with your carrier over the R&C. Write a rational, detailed letter explaining the circumstances and the work your physician did and see how they come back. They might have more information about the situation than you're aware of and maybe you can take that to your doctor as well to negotiate a better price. If he is upcoding or unbundling or something like that--and not saying he is--there are other options out there yet. Likewise if the carrier's R&C still seems low, you can file a complaint with your state's insurance commissioner (or whatever state your plan might be written out of). I don't really know how far that would go, though, but it might show your carrier you mean business.
Let me know if you need anything else. Unfortunately it is the patient that gets caught in the middle of these struggles.
Thanks very much, JWMC. Your discussion helps quite a bit to lift some of the vast fog that surrounds medical billing and reimbursement. I do think an appeal is in order and perhaps a complaint to the appropriate issurance commision if the appeal gets nowhere.
A couple of thoughts, questions: If doctors could never make it receiving Medicare level allowances alone, how do they, in fact, survive? Does private insurance of younger people actually pay significantly more? Or are people both young and older, paying considerable sums out of their own pockets?
Also, patients are systematically disempowered in this whole area. The main way this is accomplished is by limiting their access to information on how the system works. For example, I feel the need to negotiate a bit with my doctor. His bill for certain things is eleven times what insurance allowed! I naturally feel he's somewhat high and insurance is somewhat low - they both need to give some. If they do, I'm happy to pay the difference, but I really don't think it would be fair for me to have to pay more than the insurance company! In any case, to discuss this with the doctor I certainly need to know fairly precisely what he billed for and what industry standards are for it. And this, indeed, is essentially impossible to find out. The insurance company, which is in a perfect position to help me, won't even disclose the the codes the doctor submitted. They know very well that the less information given to a person, the weaker they are, the less effective they can be in representing their own interests.
So, this difficulty in getting information is truly one of the most exasperating aspects of the situation; and that's the reason I appreciate your posts so much.
You're welcome. An appeal is always the first place to start. All it costs you is some time and postage (or sometimes even a phone call, but with the outsourcing nowadays, trust me you're better off writing a letter).
Doctors make up their income from other patients...or at least, some do. Physicians will tell you that not only is CMS gouging them but so are the HMOs/PPOs and like you said, sometimes the doctor's charges seem too high and the insurance reimbursement seems too low so there has to be a middle ground. One that unfortunately has never really been established yet.
In fact physicians are pushing to be able to balance bill CMS patients; meaning that if the CMS rate is $100 for an office visit and the doctor charged $300 for it, they now want to be able to balance bill the patient the other $200. Problem is, most people getting Medicare are disabled and/or elderly, people whose incomes aren't astronomical to begin with. The limits were put in place on CMS patients to avoid the very thing you're experiencing. Granted, maybe CMS rates are too low but it's hard to feel sorry for a physician who makes $150,000 a year complaining he's not making enough when his CMS patients are living on say a $20,000 a year or less fixed income. So again, there has to be a middle ground.
The only way for that to happen is again to do what you're suggesting; transparency in pricing. Why is it you can get estimates for repairs done to your car but not your body? Some physicians/hospitals will tell you if you ask, others won't. It's a business decision and some decide not to tell patients because if they did, they would probably scare away the patients. That's not meant sarcastically, I've seen claims where doctors have charged $600 for a 40 minute office visit. That's $15 a minute. If you knew that going in, would you go to that doctor? Probably not. Least I know I wouldn't. Some physicians/hospitals prey on your ignorance just as much as some insurance companies do, unfortunately.
You can ask your insurance company for the R&C for the CPT codes your physician billed (some will give it to you, some won't) but the problem with that is, your physician probably isn't going to take it very seriously. He'll just say that the insurance company is lowballing what it really costs, though you might be able to use it as a starting point for negotiation. Also take the CMS rates to him; usually 125% of the CMS allowed amount is considered fair reimbursement.
Well, after you appeal to your carrier. See what they have to say about it. Feel free to post any response you get and we'll take it from there.
We've all had a hand in the mess that is health care now. I do think one of the problems is though that the general public just doesn't know how the system works. Unless you're in the business either through insurance or in health care, it's like trying to decipher Egyptian hieroglyphics sometimes. It can even get that way for those of us in the business.
I'd be happy to be out of a job tomorrow if everyone could get fair coverage at reasonable rates. But there's just many different problems out there making this mess what it is and insurance is only one part of the equation.
Thanks again for the informative post. I do have the CPT codes that were billed and the AMA site allows one to determine what the CMS allows for those codes, so I do have a good idea of that. The 125% of the CMS allowance, therefore, sounds like a good talking point, if it comes to that; but,
if what I was told at my first meeting with the doctor's billing person is correct, an actual negotiation may be avoided.
The doctor's administrator told me that because 1) this treatment was due to a genuine medical emergency; 2) I went to a hospital that is in-network; and 3) because the hospital called the urologist on-call to handle the emergency, and I had, therefore, no choice as to which doctor was going to do the work; the insurance company is required by a federal mandate to cover 100% of the doctor's bill and that co-pay and co-insurance requirements do not apply. For the time being she was happy to accept the amount the insurance has already paid me as partial payment of the bill; and advised me to ask for a reprocessing of the claim, rather than to file an appeal. In addition she gave me, in effect, a script to follow when asking for the claim to be reprocessed. It outlines the points above, mentions the federal mandate and says I should ask them to reprocess the claim for a "non-participating balance bill."
I expressed doubt about the requirement of covering 100% of a bill, but she assured me it was true; and that Aetna, in fact, had had a several million dollar judgement go against them on this issue.
So, I will give this a try and see what happens. It still doesn't make a lot of sense, though. If true, it means the government has given out-of-network doctors who are pressed into emergency service a blank check with private insurance companies. The US Government doesn't do things like that. I suspect that if there is a requirement, it is along the lines of mandating that the insurance company, in this situation, treat the claim according to their in-network policies. This would still give them leeway as to how much they will allow for the procedures, however.
Does anyone have any insight into this? Do you think it might be connected to the Emergency Medical Treatment and Active Labor Act (EMTALA)?
It's better news but I wouldn't get your hopes up yet that the issue is completely resolved. If those were the circumstances then yes, your charges would be considered what's known as ancillary and--depending on your plan--deductible and co-pay wouldn't apply assuming you didn't have an IN-network co-pay/deductible (some plans do).
But that doesn't mean the carrier is going to cover 100% of whatever the physician billed. It will still be subject to R&C, so if the physician billed $2,000 and the carrier's R&C is $1,000, the physician can still bill you for the remaining $1,000. I'm not aware of any federal or a state that has a mandate which states carriers can't apply R&C in those circumstances because they're well aware the physician could then just charge $20,000 a procedure and the insurance company would be required to pay it in full and then everyone's premiums would spike.
Some places will just write that off, some won't so that's hard to say, but I wouldn't necessarily rest on your laurels right now based on what this woman said. Sounds like she was trying to appease you for the moment but that bill for the R&C difference will more than likely still come in the mail after the claim is reprocessed.