Evan Dudik got severe sticker shock after his wife broke her ankle last year. Not only did his high-deductible medical plan put the family on the hook for the first $5,500 in charges, but Dudik also had to sort out a number of discrepancies in the bills.
All told, the 61-year-old self-employed management consultant from Vancouver, Washington, says he was charged $1,300 more than he should have been for an out-of-state emergency room visit. It was only after a long battle that he recouped that money and other overcharges for follow-up care.
Millions of Americans, roughly 18 percent of workers, are now in this world of high-deductible plans. With that coverage, patients and their families must pay at least $1,250 per person before the insurer takes on any charges, according to benefit consultant Mercer.
More and more employers are steering workers toward high-deductible plans, and they are likely to be the choice of a large percentage of people shopping on the public insurance exchanges just launched as part of the U.S. Affordable Care Act.
The idea is that consumers who have to pay for their own healthcare will make better decisions and incur lower costs. But they also need to become billing experts because they must pay so much out of their own pockets.
"These plans are putting people in the driver's seat, but without GPS," says Maribeth Shannon, director of the market and policy monitor program at the nonprofit California HealthCare Foundation.
To make sure you are paying a fair amount, here are three key elements to check:
GET YOUR DISCOUNT
First and foremost, wait before you whip out your checkbook.
"Our guidance is to not pay until you get your explanation of benefits," says Mark Smithson, vice president of provider process and services at health insurer Humana Inc.
Insurance companies put every claim through a repricing engine, where they figure out the difference between what the provider charges and the negotiated discount rate, and that is supposed to happen even if you have not met your deductible.
Yet sometimes people get bills from doctors and pay them without thinking about it.
"Consider any bill from a provider as the beginning of a negotiation rather than like a bill from a plumber or Visa," advises Dudik.
And sometimes the repricing never happens. Pat Palmer, founder of Medical Billing Advocates of America, says she has seen cases where insurance companies did not bother to put bills through repricing, since they were not paying them anyway.
"They take whole amount and apply it to deductible, and they neglect to put on the explanation of benefits that there is a different amount that you should be paying," Palmer says. "We have had some insurance companies tell us that 'it costs us money to put a claim through repricing, so we just process the claim.'"
That simply goes against Humana's policy, Smithson says. His advice to customers for avoiding all billing problems: Stay in-network whenever possible, because the insurer has a closer relationship with those providers and can exert more control over billing practices.
ARGUING ABOUT THE NETWORK
The definition of "network" is another problem, one John Certalic faced after he had heart trouble while on vacation in Florida earlier this year.
Certalic, a 64-year-old charity manager from New Berlin, Wisconsin, had a plan with a $7,500 deductible from HIRSP, which operates the high-risk pool in his state.
However, the hospital he went to was not an included provider because it was out of state. When patients go out of network, insurers usually cover just a very small amount, and the patient is responsible for the rest. The bills at full charge totaled more than $55,000.
Certalic turned to Medical Billing Advocates, which eventually found a clause in federal Medicaid regulations that required the hospital visit to be covered. The bills were reduced to the insurance company's negotiated rate.
HIRSP processes all claims blindly to look for errors, regardless of the deductible, Chief Executive Officer Amy Goldman says. People who have further disputes can file a grievance or appeal, or have a case reviewed by the state insurance commission.
Dudik's insurer, LifeWise of Washington, says it has a financial accuracy rate of 99.8 percent on claims, but notes that out-of-network charges like his may get confusing to customers. "When a member sees a doctor outside the network, the member is responsible for paying the doctor and then submitting a claim to LifeWise," says spokeswoman Melanie Coon.
OVERCHARGING FOR SERVICES
Certalic looked mostly at the bottom line, but Dudik dug into the coded language of his bills and noticed what looked like a lot of mistakes: duplicate charges, mysterious service fees, overbilling for nonemergency services and overcharging for common equipment.
"One of the most eye-opening mistakes for consumers on high-deductible health plans is not checking for the right service level," says Katie Vahle, founder of medical billing advocate CoPatient, which helped Dudik. "We see that all the time."
CoPatient got the coding changed on some of Dudik's care from emergency management to follow-up, which reduced one bill from more than $2,000 to just above $500.
"You have to look at the bill, and if it's not clear, you have to ask for explanation," Dudik said. "But don't expect to understand it. You have to get somebody who knows how to push back."
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