Our real world example of a healthcare billing fiasco and what you can learn from it
After 28 years in the healthcare industry I thought I knew everything about health insurance. Well, turns out not as much as I thought I knew. I certainly had an advantage being an insider but looking back I learned that the health insurance process in the United States is not an easy process for anyone to navigate.
In my role as a healthcare administrator I took the perspective of ensuring that the payment for a procedure the hospital did was protected. That meant collecting cash upfront by estimating what the patient might owe for the service.
In my role as a caregiver I took the perspective of getting the best care for my wife without regard to insurance plans rules or money. Who thinks about the money impact while taking care of a loved one?
Having the experience of seeing both sides of this I now have what I think is a more balanced view. Some lessons learned are below to help you navigate the wild world of health insurance. The key to all this is understanding your health insurance plans before you need it!
While you are actively getting your health taken care of no one wants to talk about money. You are focused on getting better and when the person asks you about your insurance and collecting money you are certainly in no mood to talk about that – which is understandable.
The healthcare industry is a unique one – you can get the care you need without fully paying for services at the time you receive those services.
Try to do that when getting a haircut or buying groceries at the store – I’ll pay you later for what you provided me today. Patients need to think of this like receiving services with a promise to pay – either when you are in the office or after you leave. The people asking you for money are not trying to be mean or insensitive – they are just doing their job that their bosses (like I used to be) expected them to do. Now, those people need to be caring and sensitive when they talk with you about this and if they are not, please speak up and let someone know.
If you have not read my post that explains basic healthcare insurance billing terms, please pop on over to open the post on Changing Benefits. This post will help you through many of the terms you will encounter as your healthcare services are used.
After your visit, your healthcare provider will bill insurance, and in turn the insurance plan will send you what is called an ‘explanation of benefits (EOB).’ Do not just throw this away assuming your insurance plan and providers have got it right – I know this from firsthand experience! The EOB is your insurance plan’s point of view related to how the plan is processing your co-pay, deductible, co-insurance and out of pocket maximum. Some EOBs will be straight forward and others not so much. Since this is money out of your pocket, you need to read, understand and push back when EOBs are incorrect. Even when the insurance plan EOB is correct, there may be an issue with your provider’s billing and collections.
For instance, for a simple office visit with a $25 co-pay, the EOB will show the amount the physician billed to insurance, the allowable amount (amount insurance will pay the physician) and the co-pay amount ($25 you owed as a co-pay). Other times, the EOB can get complex due to the triggering of deductibles and co-insurance OR due to the order in which the insurance plan processes your claims. Lastly, the EOB may be more confusing due to special codes and explanations from your insurance plan as to why something was not paid.
Let me walk you through a real situation as it relates to Mrs. R2e’s care. At the time I worked for a hospital, however, I deliberately wanted to see what would happen to an ‘average patient’ and their experience with the insurance coverage. I allowed the process to flow normally to experience firsthand what would happen, though eventually I did step in since I was owed a fair amount of money back due to the way the EOBs were processed.
When Mrs. R2e finished her first round of chemotherapy, she was then scheduled for following up imaging tests to check on her cancer. She had a CT-Scan completed which led to an MRI to confirm results of the CT. The MRI came back ‘clean,’ which then led to her colostomy reversal surgery. From a billing and EOB perspective all was good – the co-pays were collected and applied correctly and the deductibles were fine (at the time my employer healthcare plan did not have any co-insurance amounts).
Then we rolled into a new calendar/new benefits year. Mrs. r2e had her three month check in and had another CT-Scan done. We received “the call” to have an MRI test done since the CT was indicating there may be something on her liver. She then had the MRI done and it was confirmed that there were spots on her liver that indicated her cancer had spread. We then met with liver surgeon specialists and a PET CT was ordered. The result of the PET CT scan confirmed the cancer had spread and the specific locations on her liver.
Less than a week after the PET CT, Mrs. r2e followed up with the liver surgeon and was in the hospital having major surgery to remove the right lobe (side) of her liver. I dutifully paid (after calculating them myself) the co-pays and deductibles for all the multiple visits leading up to surgery and then also the amounts due for the actual surgery and then the hospital inpatient stay. For the next month after her surgery I was focused only on her recovery and did not pay attention to the EOBs I started getting. Then it got stupidly complicated from a billing perspective.
I reviewed the EOB for her PET CT that was done first (date order), the one I paid the co-pay for upfront. I was also reviewing the billing statement from the anesthesiologists involved with her surgery (the anesthesiologists are not part of the hospital so they bill separately). That led me to look at the hospital billing and EOB statement for her surgery and inpatient stay.
Well, it turns out that the PET CT was never authorized by insurance, though it was performed as scheduled. And it also turns out that my wife’s lifesaving liver surgery was not authorized by insurance either. Side note – I believe these two ‘insurance denials’ were more about rushed timing than about the clinical need for the two procedures (Insurance companies are notoriously slow in approving high cost procedures). I will have a future post on my blog on the topic of “insurance authorizations.”
So, in any case, when we paid the co-pays and deductibles for the PET CT and surgery, since those were ‘denied due to no authorization’ it was like they never happened and the insurance company said we owed nothing as a patient. Making this more fun, the anesthesiologists, who we paid nothing to upfront, submitted their bill and the insurance company tagged that service with the deductible on our plan – resulting in a bill from them. So, the hospital was not paid but the doctors at the hospital were – for the same surgery.
I spent the next 4 to 6 months trying to straighten out the billing part. I mentioned my approach to let it work its way through the ‘process’ – we are in a position where we could afford that, however, it got to a point where my frustration took over and I then escalated the issue to others at the insurance plan and hospital. I actually had to get all of the EOBs from my insurance plan and then I created a small spreadsheet that summarized everything by date and by healthcare provider. I shared this with the insurance plan trying to get assistance. I also escalated this to my personal contacts at the hospital (something the average person does not have access to). Eventually we received refunds from the hospital and we paid the anesthesiologist and the whole thing was settled.
Here are six things you can do when it comes to handling healthcare billing:
1. Pay your simple co-pays due.
When you have a straight forward co-pay due, pay it at the time of service (or if not asked, wait until you get the EOB). If you cannot pay it, work with the healthcare provider to pay it in installments. ALWAYS review your health plan documents so you know what your co-pay is. Primary care preventative visits may have $0 co-pay, other visits may be $25. Seeing a Specialist may be $50.
2. Only partially pay deductible or co-insurance amounts upfront
Yep. The guy that used to focus on having patients pay cash up front is now saying to patients “Don’t pay in full upfront.” When it comes to deductibles and co-insurance, based on your individual situation, I recommend you tell a healthcare provider you will pay after you receive the insurance plan EOB, or at the very most pay half of what they are asking for. There are too many variables in the healthcare billing process that can and will impact the estimates they are asking you to pay. Consumers are not aware that calculating deductibles and co-insurance before billing is not precise, it is an educated guess.
Having recommended this approach, I will also say that it is your responsibility under the insurance plan agreement you bought (or have) to pay in full once you agree with the EOB – so pay it. Also to note – if your procedure is deemed ‘elective’ and not covered by insurance, expect to have to pay 100% upfront.
3. When you have a lot of visits to multiple providers in a short time it will get complicated.
Like I mentioned with Mrs. r2e’s experience with multiple visits to multiple providers over a short time period, the billing, and insurance processing, will get complicated. With my insider understanding, it was routine for me to carry Mrs. r2e’s medical information AND also her billing information. If we had back to back appointments, I would show the next provider the receipt for deductibles we just paid to the prior provider.
The issue with healthcare billing is that a provider looks up your plan on the insurance website. If you are having a lot of back to back appointments, that insurance website is not as current as your checkbook/credit card. The provider you are visiting at 1 pm today is not seeing the big deductible you paid yesterday.
4. At a hospital ask for a Financial Counselor
For those without insurance coverage, or those with plans that do not cover much, you need to be aware of something. Unless you ask about it you may never be told about it. Hospitals want (need) to get paid for the services they provide. Even non-profits need to make a profit to continue servicing their communities (non-profits are supposed to use their “profits” to re-invest in the hospital as opposed to for-profits who are beholden to shareholders).
Hospitals employ personnel called financial counselors. Financial counselors can be your best friend as long as you are honest and transparent with them. If you show up at the hospital emergency room and do not have insurance, ask for the financial counselor to assist you. For those not having insurance, there are multiple ways the financial counselor should help you. They most likely will start with gathering some basic information about you, including your income, current job, if you have children, etc. Cooperate with them, they are really trying to help you. They need this information to check so see if you would qualify for state sponsored Medicaid or other government programs (County, City, etc).
If you are not eligible for government programs, then ask the counselor about the hospital ‘charity care program.’ Most, if not all, hospitals will have a charity care program, even for profit hospitals. Some state governments have laws on the books that require hospitals, mainly non-profit, to offer a certain dollar amount of charity to maintain their non-profit status. Charity care programs as designed around federal poverty level rates and are intended to help people that do not have the resources to pay. Again, be honest with the counselor and they will work with you to help get your health insurance bill covered by the hospital charity care program.
Let’s say you are not eligible for a government program or the hospital charity care program, you still have options. Ask the counselor about uninsured discounts for services (remember hospitals want to get paid something so negotiate!). And when you ask about discounts, ask for a bigger discount if you can pay cash right at the time of service. If you cannot pay the entire amount quoted, then ask the counselor if the hospital will set up a payment plan to pay off the bill. To a hospital, some payment now is better than a patient walking out the door with no payment made. All you have to do is ask.
5. Track your payments and closely review EOBs
I never did this until Mrs. r2e’s recent diagnosis. I now routinely spend time weekly to keep track of upfront payments, reviewing EOBs, making “back-end” payments (after the claim is settled).
I download the EOBs from the insurance website and keep copies electronically. I have a spreadsheet that I use to track individual claims, which I also use to track our total healthcare expenses for potential HSA reimbursement. If you don’t understand, don’t assume the people billing you do! I have corrected numerous billing and insurance processing mistakes.
Check your insurance plan website – the insurance carrier we have allows you download claims detail which can be imported into an excel spreadsheet.
6. Consider Hiring a Medical Billing Advocate
If you are really struggling with the bills, consider hiring a medical billing advocate. You would hire this person and pay them to review your medical bills and work with providers and insurance to get it processed properly. They will even review detailed bills to ensure that the provider billed you appropriately. I do not have personal experience with this so just google “medical billing advocate.”