At international healthcare conferences, arguing that a certain proposed policy would drive some country’s system closer to the U.S. model usually is the kiss of death.
—UWE REINHARDT
Insurance companies rarely feel like an ally. Most of us feel powerlessness and dread each time we’re forced to pick up the phone and call one.
It may be this warped power distribution that leaves medical care without the privileges and rights implied and exercised in other consumer relations—despite the fact that we invest in it substantially over a lifetime. Insurance, private and public, is also an odd setup, as patients are a sideline to the economic exchange. A middleman pays your provider, so the bulk of the money doesn’t come directly out of your pocket; but the majority of us indeed pay—in deductibles and premiums, and the portions of income employers siphon off our paychecks. All the while, we cross our fingers that colossal bills won’t show up in our mailbox unannounced.
Almost 90 percent of Germans receive coverage through a national public system, and these numbers are comparable in France and Canada. These countries have equitable systems with high access and quality, with the majority of healthcare coverage financed by the government, plus regulated competition in the private sector that drives quality and innovation without affecting patient spending. All in all, citizens can enjoy the ambient peace that comes with knowing that when something goes wrong, they will be taken care of.
Of course, that is not the case from where I write this book. The United States is a mixed bag—some private insurance is offered through employers, single-payer Medicare covers those over sixty-five, state-managed Medicaid is available to some, and semi-affordable coverage options exist through the Affordable Care Act Marketplace. And about twenty-eight million people are still uninsured.
The following sections break down various components of the insurance model to make it more approachable and easier to navigate. They include practices you can adopt on the front end to reduce costs, and they highlight ways to incorporate insurance checkpoints into your monthly routine so bills don’t spring up on you.
Most of the time, the frustrations that arise when calling insurance companies are rooted in communication issues. You may have found that the most difficult part of a phone call to your insurance is the act of explaining what you need help with. It’s a tall order to sit on the line with a stranger and catch them up on the minute details or impossibly confusing predicament you find yourself in, and to tell them what you already know (so they don’t repeat it) and what you need to know. And you may not even be sure what it actually is you need to know, when you don’t speak insurance language.
Medical coding is how practitioners communicate with their billing staff, and how billing staff in turn communicate with insurance companies.
The process goes like this: A provider will walk into a room, discuss things with you, and maybe order various tests, conduct exams, or provide a medical treatment or intervention on the spot. The encounter is then transmuted into codes—procedural codes, diagnostic codes, medication codes. These codes are then transmitted to various parties to file away so they can settle up bills.
I won’t bore you with a list of codes and how they’re classified, but I will emphasize one thing: Whenever dealing with a medical bill of any sort, potential or otherwise, use the codes. Without them, trying to dispute a claim can induce a headache.
The codes are sort of like using a reference number for a customer service item or to pay a water bill—they ensure that you and the person on the receiving end are talking about the same thing. When you’re setting off to determine a fair price for a procedure (see here), have the code for that procedure on hand. You can ask your provider during your appointment, or call the office later. When you’re calling an insurance company to find out whether something is covered, use the code. If you’ve found a mistake on your medical bill, use the code to communicate with the call-center representative.
If you want to ensure that codes on your bill are accurate, you can look them up using the Physician Fee Schedule search feature on the Centers for Medicare and Medicaid Services website (http://cms.gov/apps/physician-fee-schedule/search/search-criteria.aspx).
Studies show that often the main culprit of avoiding care is that the patient does not understand basic insurance terms or provisions of the Affordable Care Act, and therefore does not understand what they are eligible for or what care will cost. Lack of basic health insurance literacy on this front causes people to miss preventive screenings or checkups, simply because they don’t know that they’re covered.
Here is a bare-bones, to-the-point explanation of the many things you pay the insurance company for and the expenses they share with you.
Deductible: The amount you must pay, out of your own funds, for healthcare services before your plan kicks in. This amount begins anew every year.
Premium: The amount you pay your insurance company every month to keep your plan active.
Co-pay: An established, flat fee you pay for appointments and prescriptions. It typically covers generic services like primary care appointments, specialist visits, and drugs. It kicks in once you’ve paid your deductible.
Coinsurance: The portion of expenses you are responsible for, outside of co-pays. For instance, if you have a hospital stay, your insurance might pay 80 percent and you would pay 20 percent, the coinsurance.
Maximum out-of-pocket: The maximum amount you could have to pay for healthcare services in a year. After you’ve paid this dollar amount, the coinsurance no longer applies and the insurance company pays 100 percent.
In-network: In-network providers are affiliated with the insurance network. Seeing them will cost you considerably less than seeing out-of-network providers.
The type of insurance plan that’s best for you will vary based on where you are in life. The decision (if you have a choice) should factor in your health status, income level, dependents, and options available to you based on your vocation. At a glance, all plans may seem exorbitantly expensive and tricky, so it’s easy to divert your attention elsewhere and pick one without much consideration. The information outlined below can help you determine what you really need from a plan (beyond coverage in the event of an emergency) and how to get it in the most economical fashion.
HMO: HEALTH MAINTENANCE ORGANIZATION
Pros: Generally lowest costs and lowest premiums
Cons: Limited to in-network providers; need a referral to see a specialist
This plan is a good option for you if you are young and generally healthy, have a PCP in the plan’s network, and need an economical plan.
PPO: PREFERRED PROVIDER ORGANIZATION
Pros: Large range of providers to choose from, and you can go out of network; do not need a referral to see a specialist
Cons: Generally higher costs
This plan is a good option for you if you need access to specialists, including if you have a chronic illness and want to be able to see specialists without a referral.
HDHP: HIGH-DEDUCTIBLE HEALTH PLAN
Pros: Low premiums; plans typically arranged with employers; can deduct healthcare spending from taxes using a Health Savings Account.
Cons: Highest deductibles (at or above $3,000)
This plan is a good option for you if your employer offers it and you’re in good health.
Did you know a strep test for you or your child could cost $16, or closer to $80? That MRIs and CT scans have some of the greatest price variations of all medical services, costing more at hospitals and less at freestanding clinics? That artificial insemination typically costs around $160 per treatment, but some clinics charge upward of $450 each time?
Just like for cars, there is a blue book for healthcare procedures, and it’s a brilliant source of help when you’re determining whether a fee for a test, procedure, or treatment is fair. It can save you tens of thousands of dollars with a few phone calls.
Prices are notoriously mysterious to patients. We know that a dress at Neiman Marcus costs tenfold what a dress at Target costs, and we anticipate higher prices on bread, milk, and dog food when we go to an organic market instead of a chain grocer. But we are not so privy to this price fluctuation in healthcare, and it can be astronomical (sometimes upwards of 500 percent). We’re asked, When do you want to do this? Monday or Thursday? but never How much do you want to pay for this?
The rest of the story goes something like this:
Have the procedure. Get the bill. Panic. Call the insurance company. See if there’s been a mistake!
Instead, handle the money side of things up front with a few phone calls. It will take you approximately half an hour.
Every time your provider orders a test or schedules a procedure—from mole removal to endoscopy to brain surgery—follow these three steps. It’s my hope that you adopt this protocol and become so familiar with it that it will be like cooking without needing a recipe.
Before you start, ask your provider for the specific name and CPT (current procedural terminology) code for what you’re having and, most important, where they are sending you. (Literally the building, facility, or testing center.) If your provider is rushed, someone in the office can give you this information.
Step 1: Call the facility. Say the following:
“I’m scheduled to have a/an . The code is . My insurance plan is . I am calling to inquire what the cost will be.”
If you are not using insurance, let them know you’ll be paying up front and ask for a discount. (Yes, like you’re bartering at a flea market!)
Step 2: Go to the Healthcare Bluebook, http://www.healthcarebluebook.com. Using this free resource, you can enter a test, hospital stay, surgery, exam, lab, medication, or imaging service, and then get a fair price quote based on your zip code. The results include a range and an explanation of the cost, even a breakdown of which portions go to the provider, the hospital, and other parties. You’ll see that the facility, not the provider, is often the culprit of cost variation. Compare the quote against the price the facility gave you.
Step 3: If the quote from the facility satisfies you, you’re good to go. If it doesn’t, go back to your provider, explain the cost differential, and ask where else you can have the procedure done. They will have an alternative. If they’re doing the procedure, often they will make their initial recommendation just based on which facility or hospital they are operating at on that day of the week. Choose a different day and see where else they have privileges.
In my household, receiving medical bills in the mail falls somewhere near running into a bitter ex on the things-to-dread scale. We are good at evading the situation until it’s staring us in the face and we are staring back, as Joan Didion says, “with the nonplussed apprehension of someone who has come across a vampire and has no crucifix at hand.”
Medical bills are rife with error. Studies indicate four out of five bills contain at least one.1 It could be clerical, as minuscule as a misspelled patient name or an incorrectly entered digit—which could lead to an improper code, a denied claim, and a bill redirected to you. Procedures and tests can be inadvertently duplicated (meaning they are listed twice—and thus you are charged twice). Errors can come in the form of a mismatched diagnosis and treatment, as coded by the provider’s office or the hospital. They can also occur when a provider’s notes are sparse and the insurance company claims insufficient medical necessity.
Insurance coding is tricky, and each transfer through the call center to the billing department can make you feel more and more like you’re playing a game of telephone. Who is looking out to make sure everything lines up? No one, if not you. The provider’s job is only to submit the bill, and the insurance company has no problem passing it on to you if there’s a mistake. Research estimates that billing errors amount to roughly $150 billion in overcharges annually—about $1,000 each year for a family of four.
Still, it’s a tedious job to sleuth through a medical bill and look for errors. Below is an easy set of instructions for preventing and then fixing errors. Take a few minutes to do these each time you get a medical bill, especially if you weren’t anticipating the amount.
Use the information found here to understand your insurance plan, at least at a basic level. You should have a general understanding of what charges to anticipate—such as co-pays and deductibles—so it’s easier to catch things you shouldn’t have been charged for.
Each time you have a medical encounter, be sure your name and date of birth are correct on the forms. Even an incorrect middle initial can lead to billing problems.
Look for duplicates, both within the bill in front of you and between that bill and one you have already received or paid.
Look for and save the Explanation of Benefits portion of the bill. You may need it when you’re on the phone with the insurance company or the provider’s office.
If you think there has been a mistake, call your insurance company and review the bill with them until you’re satisfied with an answer.
Have independent medical billing experts review your bill. Use an online platform such as Simplee (http://www.simplee.com) or HealthCPA (http://www.healthcpa.com) to automatically search your bills for error. These services have apps through which you can upload snapshots of your bill.
A quick note about in- and out-of-network providers
Even with planned, scheduled procedures, things may change in the final hour, causing an out-of-network provider to become involved without a patient’s consent. This can result in four- or five-digit bills landing on unsuspecting patients. Many states are passing laws to prohibit these “surprise” costs.
Providers should be either in network or out of network, but it’s not always that simple. Some can be in network for certain procedures but not others. Always check with the provider up front about whether any service they provide is not covered, or go straight to the source and ask your insurance carrier.
Over-the-counter savvy is not directly related to insurance, but it is related to economics. Possessing it can save you enough money over the years to take a trip to Aruba.
As you’ve likely picked up on by now, capitalism rules the healthcare industry just as it does other aspects of our lives. From sea to shining sea, from capsule to cream to pill. We see as many advertisements for Tylenol as we do for Subarus, Tide, and Snickers.
Even when it comes to medications, marketing is always at play. Brand names carry nostalgia, which translates to comfort, and what more do you want when you’re sick? When I was a baby, it was Vicks VapoRub and a nap on the sheepskin rug. When I was in school, it was packets of Luden’s cherry throat drops tucked in my desk. To this day, I’m convinced those products are the ticket.
It’s hard to transcend the power of branding, but when it comes to over-the-counter medications—be a cool customer and buy generic. Each and every drug has a trade or brand name and a generic name. Tylenol is the trade name for acetaminophen and Claritin is the trade name for loratadine, for example. You can check here for a list of common brand names and their generic counterparts, but you can usually also turn a package or bottle around, look at the label, and find the active ingredients. The active ingredients in the generic, less-expensive version of a medication are usually identical to those in the brand-name version.
We can thank Benjamin Franklin, who paved the way for the United States Pharmacopeia (USP). The USP verifies a drug’s identity, potency, purity, and performance. All drugs sold on the US market must meet its standards.
Unlike for drugs, though, compliance with USP standards is optional for vitamins, minerals, and supplements, so it’s important to look for the USP stamp on them. For example, these products are not required to conduct clinical trials prior to market entry. Do your research to find the best brands. If you’re not sure where to start, Labdoor (http://www.labdoor.com) is an excellent, well-designed resource for determining how to best spend your money on dietary supplements—from creatine to fish oil—whether they are recommended by your doctor or taken by personal choice.
Last, if your primary care provider recommends a particular dietary supplement or if there’s one you go through regularly, ask for a prescription. Going this route can be significantly less expensive, even without insurance.
Getting Care When You’re Uninsured
People without insurance used to be able to use emergency rooms as their de facto PCP whenever a health issue arose. ERs cannot turn anyone away and must provide care regardless of the patient’s ability to pay. Today, though, it’s not so simple. If you’re uninsured, you can still go to the ER, of course, but you may be crushed with a bill a few weeks later. This is why when you’re admitted, someone always collects your contact information. It’s a friendly version of we know where you live.
If uninsured, once you arrive, never let a hospital reroute you to another facility because you can’t pay. Demand that you’re treated where you are, and if you’re met with resistance give everyone a gentle reminder of the law—because sending you elsewhere and delaying your treatment is not only unethical but also illegal.
If you’re uninsured or between coverage and need general care, you may be inclined to wait it out until your situation changes. But there are resources available to you that can help, and the sum of their parts is almost as solid as an insurance plan when it comes to preventive care.
Private-practice clinics: More often than not, a primary care provider will see you even if you don’t have insurance. The caveat (and it’s Mafia-esque, I know) is that you have to pay in cash up front. Call clinics near you and ask if this is an option, and what discounts they offer if you pay this way. Most will offer a discounted rate, and you can get that in writing before services are rendered.
Urgent care: For a detailed explanation of when and how to use urgent care, see the section “Choose Urgent Care If . . .” Urgent care centers accept payment without insurance, and their fees and wait times are much less harsh than those of emergency rooms.
Walk-in clinics, community clinics, nonprofit clinics: Larger hospitals often have satellite clinics in medically underserved communities and in large urban settings. Services at such clinics are typically low-cost or done on a sliding-scale basis. Find Care (http://www.findcare.org) produces a list of all free and low-cost clinics in your vicinity based on your zip code.
Hospital events: In most cities, major hospitals and medical centers consistently engage with their communities via open-to-the-public events. Most boast multiple flu-shot clinics during fall months, provide free cholesterol and blood pressure readings, and offer all kinds of health screenings to catch and prevent diseases from breast cancer to melanoma. Sign up for newsletters from the major hospitals in your area, and you will get updates about all the free clinics and screenings you can take advantage of as a community member.
If paying for medications is a hardship or a barrier to care, patient assistance programs may help. Many state and corporate prescription assistance programs help patients obtain free or nearly free medicines if they qualify. Apply online at http://www.pparx.org.
Unfortunately, and not by coincidence, some of these programs make the application confusing and difficult to fill out, which deters most people. But community centers, churches, and charity organizations may offer resources to help you fill them out. Call them up and ask if they have people or groups that can help you fill out an application.
Another way to save money on medications is to ask your provider if you can get a higher dose and cut the pill in half. This often saves patients substantial money out of pocket.