Sucking You Dry
| Tue Oct. 6, 2009 11:06 AM PDT
I've written a bit lately about how banks make a lot of money by exploiting complexity and confusion. This works all the way from the small (overdraft fees) to the huge (weird credit derivatives that no one really understands). Apparently the healthcare industry, which was never exactly a model of straight talk and plain speaking in the first place, is taking lessons. No longer content to simply bill for procedures, they've started including a separate "facility fee" for every visit:
One billing consultant has estimated that the fees could generate an additional $30,000 annually per physician for hospitals.
Critics [...] regard the fees as disguised price increases that ratchet up the cost of care at a time consumers can least afford it. Many say that facility fees underscore the urgent need for transparency in pricing for medical services and exemplify the relentless cost-shifting that is driving more Americans into medical debt and bankruptcy. It is common for facility fees to be applied to an insurance plan's hospital deductible, which can be thousands of dollars higher than a physician deductible.
...."It's like a barber saying, 'That'll be $20 for a haircut and $10 for sitting in my chair,' " said Wisconsin state Rep. Chuck Benedict, a Democrat and retired neurologist from Beloit. Benedict's bill to require hospitals to post notices about the fees and furnish upfront cost estimates was defeated in 2007; he has introduced a similar bill this year. Legislation has also been proposed in New Hampshire.
How do they get away with this? You'll be unsurprised to learn that it's all due to a weird loophole inserted in federal legislation a few years back:
[Facility fees are] the result of an obscure change in Medicare rules that occurred nearly a decade ago. Called "provider-based billing," it allows hospitals that own physician practices and outpatient clinics that meet certain federal requirements to bill separately for the facility as well as for physician services. Because hospitals that bill Medicare beneficiaries this way must do so for all other patients, facility fees affect patients of all ages. Doctors' offices owned by physicians and freestanding clinics are not permitted to charge them.
And how do you find out if the the clinic you're going to is allowed to assess the fee? Good luck! The short answer is that you probably can't.
Anyway, you all know what I'm going to say next, don't you? So I'll say it: the American public is flat out nuts to put up with this. It's not as if France and Sweden have solved all the world's healthcare problems or anything, but at least they've solved this one. If you need medical care in those countries, you just go to your doctor and get it. No games, no tricks, no hidden fees. Why anyone would prefer our fantastically expensive, jury-rigged, insecure, and maddeningly complex system to theirs is beyond me.
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Comments
Medical billing has been
Submitted by Anonymous (not verified) on Tue Oct. 6, 2009 11:28 AM PDT.
Medical billing has been insane for years as any bill from any trip to an emergency room can show you. Separate bills from the ambulance company, from the facility containing the ER, and from each and every doctor in the ER.
In addition to making price transparency and price comparison a big deal in any health reform that is not single payer, I think it's critical to make sure that hospitals, doctors, etc., cannot charge other people to pay for what they believe are underpayments from medicare or whatever. Like medicare and insurance or hate it, it's just completely unfair and should be illegal to charge higher rates to people to cover what insurance companies and medicare is claimed to be gouging out of the docs.
On the other hand, I just bought my daughter a very cute Japanese floral cellphone case from eBay, it cost $3.95 plus $7.95 shipping and handling.
Let me change this: "In
Submitted by Anonymous (not verified) on Tue Oct. 6, 2009 11:42 AM PDT.
Let me change this: "In addition to making price transparency and price comparison a big deal in any health reform that is not single payer"
Price transparency and price comparison are important, even for single payer.
Different fee schedules
Submitted by daCascadian (not verified) on Tue Oct. 6, 2009 4:03 PM PDT.
Anonymous at 12:28pm >"... it's just completely unfair and should be illegal to charge higher rates to people to cover what insurance companies and medicare is claimed to be gouging out of the docs...."
A few years ago I was in another state and ended up in the hospital (no insurance of course) for about two weeks. While I was there the doctors and nurses gave me advise on how to deal with the bills I would receive, particularly that I should not pay any more than what the best insurance plan would have paid (specifically I should offer to pay 80% of that figure which the hospital would agree to immediately). I was billed for something close to $100,000. Didn't pay it of course since I don't have that kind of money.
As time went by I received lots of calls from a "recovery" business (collection agency to we real folks) which I ignored. Then one day a letter came in the mail announcing that a some folks had filed a class action law suit against the corporation that ran the hospital I had been in for charging people w/o insurance more than the insured ones. Of course I signed on. About a month ago I got a letter in the mail announcing that the court had cut my bill by about $26,000.
Still can't pay it but at least I don't owe as much. Ha ha ha.
"Every normal man must be tempted at times to spit on his hands, hoist the black flag, and begin to slit throats." - H. L. Mencken
Maybe that's why...
Submitted by gaardvark on Tue Oct. 6, 2009 12:06 PM PDT.
[Facility fees are] the result of an obscure change in Medicare rules that occurred nearly a decade ago. Called "provider-based billing," it allows hospitals that own physician practices and outpatient clinics that meet certain federal requirements to bill separately for the facility as well as for physician services.
When I had shoulder surgery a few years ago I remember receiving a bill from the "Scalpel Assistant" and I was stymied. I had already had to fight the insurance company to pay for the anesthesiologist who the doctor had picked but was not part of my provider network. Then I got a bill for the Scalpel Assistant.
Of course, the insurance company said the Scalpel Assistant was out of network also.
Anyway, I would like a bill for a procedure that includes all the necessary practitioners, supplies and facilities. It just makes the process complex otherwise and when you're ill that complexity can just be a bit much.
Imagine getting your car repaired and them handing you separate bills for the parts, the mechanic, and btw, this other shop supplied the oil and filter.
Provide a detailed invoice, of course. But provide a SINGLE invoice.
Billing Insanity
Submitted by Anonymous (not verified) on Tue Oct. 6, 2009 12:12 PM PDT.
My wife had an outpatient surgery this summer that had this little jewel inserted in the billing we received. The anesthesiologist billed us for $675 dollars and then added an additional $675 dollars because he was training a nurse who actually administered the anesthesia. Of course the anesthesiologists office is furious that I haven't paid the bill because I told them I'd only pay for one of them. Pick one and I'll pay. They claim it's the insurance company's fault.
Anesthesiology is a
Submitted by alex (not verified) on Tue Oct. 6, 2009 12:46 PM PDT.
Anesthesiology is a notorious racket. I have to admit that your double billing is a new one to me, but a common abuse is for the anesthesiologist not to accept the same insurance as the surgeon. When my wife had an unplanned C-section I had to foot the anesthesiologist's bill since he conveniently didn't accept the same insurance as the hospital and the obstetricians. Obviously the fault is mine as when my wife hadn't delivered 25 hours after her water broke my first question should have been about what insurance the anesthesiologist accepted (not that in the middle of the night in an unplanned procedure I had any choice, but it's the principle of the thing).
A simple fix that our well bought congress won't implement would be to require that all doctors and other "outside" service providers associated with hospital or clinic X must accept the same insurance as X.
Guess who likes the system?
Submitted by dcsusie on Tue Oct. 6, 2009 12:14 PM PDT.
" Why anyone would prefer our fantastically expensive, jury-rigged, insecure, and maddeningly complex system ..."
The guys who make the money from it are the ones who prefer it, and they make enough money to pay off enough lRepublithugs and Democraps to make sure it doesn't change. And to add insult to injury, they then argue that the problem with the system is that consumers aren't careful enough in comparing prices and making prudent decisions when they purchase healtcare.
I'll tell you why
Submitted by tsg (not verified) on Tue Oct. 6, 2009 12:45 PM PDT.
"Why anyone would prefer our fantastically expensive, jury-rigged, insecure, and maddeningly complex system to theirs is beyond me."
Because freedom isn't free. Also, the death panels.
bring out your wealth
Submitted by tpx on Tue Oct. 6, 2009 2:23 PM PDT.
The medical industry of the United States is not in business to provide adequate health care to Americans, but to become rich from sick people. The huge increase in Americans turning to alternatives to standard health care must be partly driven by the greed exhibited by those types of health care providers, who not only charge very high fees, but treat their clients like experimental frogs.
This system is so maddening.
Submitted by Anonymous (not verified) on Tue Oct. 6, 2009 2:30 PM PDT.
This system is so maddening.
I was having a small diagnostic procedure done. I found an in-network doctor. Then, at the doctor's office, they draw blood. And I notice they have "Quest" doing their labs. I wonder if my insurance covers quest. I call my insurance...sure enough, they don't. I have to ask the doctor to send the labs to another testing company. Hundreds, possibly thousands of dollars I'd have been out of pocket, and I only knew this loophole was there because I work in the industry.
I took my insurance to the pharmacist to get a prescription filled. Only to find CVS doesn't take my insurance! It was $11 worth of antibiotics, and it only took half an hour for them to fill it.
Went to get my procedure today. I ran the CPT code with my insurance company (how many of you know what a CPT code is, much less to push back at the staff when they give you a 3-digit code instead of a 5-digit code?), and it should be covered, but you can never really be sure.
EVERY step of this process, another ridiculous bureaucratic hurdle.
Oh, and there's the whole "how many of these tests are actually even necessary" clinical factor.
I HATE THIS SYSTEM! BRING ON SINGLE PAYER HEALTHCARE! At least then, I'd be able to walk into a national chain pharmacy and have them take my insurance.
If you had Kaiser Permanente
Submitted by Art Eclectic on Tue Oct. 6, 2009 5:06 PM PDT.
If you had Kaiser Permanente you wouldn't have gone through that, it all would have been done in-house, even the pharmacy.
Kaiser rocks.
I grew up as a "Kaiser Kid"
Submitted by Anonymous (not verified) on Tue Oct. 6, 2009 8:42 PM PDT.
I grew up as a "Kaiser Kid" and it took me a long time after I left to understand that I was expected to arrange any and all communication between doctors, or even go to some random outside facility for X-Rays and then tote them back to the doctor, even going so far as to having to bring them to the hospital on the day of surgery. How far removed is that from "third world" countries in which patients are responsible for bringing in the meds they'll need?
The Kaiser model (the Mayo model?) in which all the doctors, and all the specialists are in house and know each other and talk to each other and do ropes exercises and other team building exercises together seems so obvious. (Kidding about the ropes exercises stuff.)
(Although regarding the Pharmacy, I do recall waits of hours to get prescriptions filled.)
"Why anyone would prefer our
Submitted by LaFollette Progressive (not verified) on Tue Oct. 6, 2009 2:40 PM PDT.
"Why anyone would prefer our fantastically expensive, jury-rigged, insecure, and maddeningly complex system to theirs is beyond me."
It's easy to see why our fantastically expensive, jury-rigged, insecure, and maddeningly complex system is popular with medical specialists, insurance company executives, drug company executives, for-profit hospital executives, millionaire corporate-sponsored media figures, and members of Congress whose electoral campaigns are subsidized by all of the aforementioned players.
Why anyone ELSE prefers our system is harder to explain. But it's pretty clear that the explanation proceeds from the previous paragraph and rests on several decades of right-wing coalition-building and anti-government propaganda.
Wow. I just recently
Submitted by Lew (not verified) on Tue Oct. 6, 2009 3:17 PM PDT.
Wow. I just recently experienced this. I was going for physical therapy at a cost of $120 per session. A hospital bought the practice and now charges $450 per session. That's right almost a 400% increase. I asked my insurer why they paid it. They said it is not unreasonable. As for my copay I told the hospital to shove it.
There won't be any curve
Submitted by Anonymous (not verified) on Tue Oct. 6, 2009 3:48 PM PDT.
There won't be any curve bending until any plan we get makes costs transparent, comparable, and well known upfront, and yes, gives the individual consumer a financial incentive to compare costs.
That probably means that copays should be 10%, not $10, capped at $50. And I'd also be happy to see any and all plans, including single payer, be such that the consumer is billed with some regulated, machine readable, spreadsheet importable, easy to read, plain as day, completely enumerated bill and then the consumer has to seek reimbursement, even if that reimbursement is similar to france's submit it, and the rest is paid within three days. Still, it should be the consumer who has to look at the bill, see the cost, and transfer it on.
Not because I want to penalize consumers, but because I want to empower the citizen.
Treatments and Plans, including all insurance plans I know of today, that hide the costs from the consumer, are going to naturally grow in known costs and hidden costs.
Maybe. But then the insurance wouldn't insure you from sudden, unpredictable, debt. Which was the original idea...
Why do I pay $40 for each of my prescriptions and not $40 a month? Who knows? Why do they cover one medicine but not the one that keeps me from needing the hospital? Who knows? (I'm glad it's the cheapest thing, but still, it's the principle.)
Crissa, with all respect,
Submitted by Anonymous (not verified) on Tue Oct. 6, 2009 4:54 PM PDT.
Crissa, with all respect, why do you pay $40 for your prescriptions when Walmart/Costco/Target/Walgreens will charge you $4? (If it's on *their* list)
But the theory behind copays is explicitly to penalize you some reasonable amount to make sure you are going to the doctor for a *good* reason. It is healthcare rationing. But presumably a good one to stop moral hazard. But it's not all good:
http://en.wikipedia.org/wiki/Copayment
Now what that copay is differs between plans from $0 to $10 to $20 to $50 to who knows....
But I have to admit that for myself my $10 copay means nothing to me, and I'll take me and my kids to the doctor over very little, where I would find a $50 copay very high and would hate going to a doctor.
I don't think people should have copays set so high that they can't pay them relatively easily. But I don't like fixed copays either that are handed out along with some mysterious slip that will be sent to the insurance company for god knows what.
I think copays should be a percentage and handed out with a bill, so that people are notified that today's appointment was twice as expensive as last week's and ask why, and can tell that everything on the list is supposed to be there, and see that a new facility fee has been added.
I do agree with the various libertarians/conservatives that the power of the market, the power of competition comes in when those costs are made explicit and not hidden.
So give the patient a bill, assess a percentage copay with a cap, and make the patient send the bill into the government single payer insurer.
Sort of the open source many eyes approach meets free market health care.
Doctor told old lady I know
Submitted by Luther on Tue Oct. 6, 2009 10:43 PM PDT.
Doctor told old lady I know to bring her cheap meds to hospital so hospital wouldn't charge her. Hospital wouldn't let her use her own meds, but charged $1600 for "pharmacy," un-itemized.
I'm surprised liberals get it. Reform should start with costs rather than more spending leading to greater incentives to cheat. It seems to have become accepted that part of medical costs is out and out fraud.
Don't fall in love with the idea of universal care before reading all 1000 pages of the bill. If the Dems don't keep it secret, of course.
Another miracle, a non-liberal for more regulation
Submitted by SRW1 (not verified) on Tue Oct. 6, 2009 11:42 PM PDT.
Hey Luther, her is a 'liberal' who is ever so happy to see a non-liberal like yourself argue so stringently for more regulation and oversight. What has happened? Have you lost your believe in the sacredness of the free market? Well anyway, how far are you prepared to go?
Should insurance companies, who obviously have a place in the first row of the show to witness all of this 'out and out fraud' up close, and who undoubtedly have the expertise to understand what is happening, but obviously are perfectly happy to go along as long as it doesn't touch their profits, should those insurance companies continue to have a role?
Maybe we have the beginning of a wonderful dialog here.
Incomplete perspective?
Submitted by SRW1 (not verified) on Tue Oct. 6, 2009 11:07 PM PDT.
Why anyone would prefer our fantastically expensive, jury-rigged, insecure, and maddeningly complex system to theirs is beyond me.
Well the answer is pretty obvious, isn't it. If you're smart enough to figure it out, then the more byzantine a system, the more options you'll be able to discover that will allow you to exploit it. And the more providers with the ability to hire bureaucratic expertise and the insurance middle men are given free reign in this game, the more they will perfect it at the expense of the bewildered consumer.
There are more participants to the health care industry than only the end user party, Kevin.
Because some people can't see the forest for the trees?
Submitted by PTate in MN on Wed Oct. 7, 2009 6:52 AM PDT.
"Why anyone would prefer our fantastically expensive, jury-rigged, insecure, and maddeningly complex system to theirs is beyond me.
It's beyond me, too. I would change our healthcare system to a single payer system today, if I could. But I also believe in evolution, global warming and competent government.
We are stymied in our desire to have a functional healthcare system by a coalition of people who deny there is even a problem with healthcare in the US. Some of them, as mentioned by others, are fearful that a government that promotes the "common welfare" will restrict their "freedom" to exploit others. Others in this coalition seem to have identities so bound up in the defense of American exceptionalism that their only response to our obvious, measurable failures is denial and aggression.
To minds like these, the only problem with healthcare in the US is that it has gotten some bad publicity from people who hate America.
I went to college, a private
Submitted by Anonymous (not verified) on Wed Oct. 7, 2009 9:15 AM PDT.
I went to college, a private school, and every single bill was sent to me, along with some relatively prominent type indicating how most of my education was being paid for by alumni and other private sources, not by my contribution. I then paid, out of the loans and scholarships that had been deposited in my bank account at the beginning of the year.
I knew much more then about what the costs were and why and where the funding was coming from than I've ever known about health care costs -- which is one reason why prices are so free to rise so high.
And that's why the industry likes all hoops.
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