Impending Issues with Increased Enrollment in High-Deductible Health Insurance Plans
Here is a concerning thought...As many Americans enroll for health insurance coverage under the Affordable Care Act (ACA), a large percentage may choose to enroll in the high-deductible health insurance plans associated with low monthly premiums offered through the exchanges. What is going to happen when these patients receive bills from their hospitals and doctors that they cannot afford to pay?
While there has already been an uptick over the last decade in enrollment in high-deductible plans by insured Americans, many analysts foresee that the numbers will increase exponentially in 2014 and beyond with the enactment of the ACA.
The plans we reviewed on the exchanges for 2014 offered deductibles between $1000 and $6350. Even with good intentions of choosing a plan that is affordable, a low income family could easily find it difficult to pay their medical bills under their new plan with a $1500 deductible along with the associated monthly premiums and copays. They may have misunderstood what their financial responsibility would be when they enrolled in their plan. Or they may have enrolled in a plan with a high deductible because it costs less on a per month basis making it more affordable and appealing.
What is the likelihood that a young healthy adult, who is now required by law to enroll in healthcare coverage or face a penalty, will choose a more expensive plan with a higher monthly premium and a lower deductible? What about a low income individual? What about a low income family?
As selling point for the new healthcare law, the Obama administration proposed that having more Americans covered under insurance policies would alleviate much of the uncompensated care hospitals are currently dealing with today. Unfortunately, the reverse may be true and hospitals are likely to see an increase in the number of patients that cannot afford to pay their bills.
So what might happen?
Individuals who are sick may put off care only to become sicker and require more expensive care as their health deteriorates further.
More Americans may find themselves having to deal with collection agencies, lower credit ratings and an increased need to file for medical bankruptcy.
Hospitals facing an increased burden of uncompensated care will look for ways to make up those costs. Could this lead to even higher hospital pricing in the future or new charges for services not previously seen? Perhaps more patients will take the time to fill out the paperwork necessary to take advantage of the charity care hospitals offer.
What other issues could arise? We shall soon see. Please share your comments with us.
Related news and articles:
“Hospitals worry they'll be stuck with more bills under Obamacare's high-deductible plans”
By Timothy Magaw
Crain’s Cleveland Business
October 27, 2013
“Hospitals fear Obamacare plans could mean more bad debt”
By Lora Hines
Houston Chronicle Health
October 27, 2013
“Out-of-Pocket Healthcare Costs Soared 25% in First Half of 2013”
By Bob Herman
Becker’s Hospital Review
November 5, 2013
“Hospitals worry about cost-sharing in ACA health plans”
“Experts: Low-income residents are likely to choose high-deductible plans”
The Daily Briefing at the Advisory Board Company
June 17, 2013
High-Deductible Plans Are a Growing Problem for Both Patients and Hospitals
The enrollment in high-deductible health insurance plans is becoming more and more commonplace as employers are searching for ways to curb their ever increasing spend on healthcare benefits for their employees. Employees covered under high-deductible health plans find themselves spending more out of pocket on healthcare than ever before as more of the financial responsibility is shifted to them.
A recently released Kaiser survey reported that in 2006 only 4% of employees in employer sponsored health benefit plans were enrolled in high-deductible plans where today 20% are enrolled in these plans. That is a significant increase. The launch of the Affordable Care Act in 2014 is expected to further raise the number of enrollees in high-deductible plans.
The minimum deductible of $1250 for an individual or $2500 for a family is required as of 2013 to be designated as high-deductible health plan however the average deductible for a family is between $5000 to $10,000 dollars. A major illness or the need for expensive surgery can create a bill too large for the employee to afford when deductibles of this size must be reached before the insurance begins to pay for even a percentage of the care.
We get calls every day from individuals who are insured, but they cannot afford the bills they are receiving from the hospital and wondering what options are available to them.
On the flip side, hospitals are experiencing difficulty collecting from patients with high-deductible plans who sometimes find themselves unable to pay their hospital bill. This is a growing concern for all hospitals, but can be a real issue for hospitals that do not have enough cash flow to handle patient bad debt.
One article we read recently used a small, rural hospital in Florida as an example. The CFO pointed out the hardship the hospital was facing paying their bills each month. It is expensive to run a hospital and a real challenge when care has been given, but the hospital cannot collect balances from their patients.
Providers can utilize programs offered by many insurers that track a patient’s deductible throughout the year. The patient can then be informed what their out of pocket expenses will be up-front. This can help the collection process opposed to relying solely on billing after care has been given.
However, a study released this year by Health Affairs reports a concerning trend. Many Americans enrolled in these high-deductible plans, particularly those with low socioeconomic status, are putting off much needed healthcare. This can lead to increased illnesses as well as increased hospitalization. The authors of this report suggest that policy makers and employers should not only better educate their employees on the coverage their plans offer, but also consider offering a means-based deductible plan.
Links to articles on this topic:
2013 Employer Health Benefits Survey
The Kaiser Family Foundation
August 20, 2013
More Employee Responsibility, More Unpaid Bills? The Rise of High-Deductible Health Plans and What it Means for Hospitals
By Helen Adamopoulos
Becker’s Hospital Review
September 26, 2013
More High-Deductible Plan Members Can’t Pay Hospital Bills
By Jay Hancock
Kaiser Health News
August 12, 2013
Low-Socioeconomic-Status Enrollees In High-Deductible Plans Reduced High-Severity Emergency Care
By J. Frank Wharam, Fang Zhang, Bruce E. Landon, Stephen B. Soumerai, and Dennis Ross-Degnan
The Individual Mandate of the Affordable Care Act
Will it Stay or Be Delayed??
Based on the July 2, 2013 decision by the Treasury Department to delay the Employer Mandate of the Affordable Care Act (ACA) for one year, there is a lot of speculation that the administration may decide to postpone the implementation of the Individual Mandate as well.
So far the Obama administration and insurance companies nationwide appear to be ramping up for open enrollment into the Individual Insurance Exchanges for the uninsured population of the U.S. Open enrollment is set to begin in October of 2013 with coverage taking effect on January 1, 2014.
The administration and insurance companies are feverishly preparing to market the exchanges to the American public. This will certainly be no easy task. By most reports a large percentage of the uninsured Americans are still very confused and uncertain if the law pertains to them or not. And they have no idea how to apply for insurance on the exchanges and how to choose the plan that best suits their budget and healthcare needs. Even worse, according to several recent surveys and polls many Americans have never heard of the "Affordable Care Act” or the law’s nickname “Obamacare”.
Additionally, it is said that the success of the insurance exchanges is heavily dependent on large numbers of participants enrolling into the program from a very broad client base consisting of young healthy adults, older at-risk adults, and those who are sick and previously uninsured. If there are not enough enrollees, the program may fail. If a large percentage of the participants are sick or elderly, it may be too much of a burden for the new program whose success is dependent upon young healthy enrollees to offset the cost of the ailing participants.
The delay of the Employer Mandate has cast concern over the fairness to force implementation of the Individual Mandate while deciding to delay the requirements of the Business portion. How it is fair for businesses to have an additional year to comply, but not the American uninsured population?
Although the ACA passed as a federal law in 2010, the regulations and requirements to implement the law have not all been written causing frustration, confusion, and a “wait and see” mentality across America. Therefore the Employer delay is seen as the Obama administration’s admission that they are not prepared for such a huge overhaul of our healthcare system and that too many flaws still exist to implement either Mandate at this time.
Some critics have suggested that the delay of the Employer Mandate was done, in part, to force higher enrollment to the Individual Insurance Exchanges. If large employers (50 or more workers) choose not to offer insurance to their employees until 2015, then those uninsured workers must obtain insurance through the exchanges or face penalties in 2014.
With the October 2013 insurance exchange enrollment date fast approaching, it won’t be long before we see if the administration will decide to delay the Individual Mandate just as they did the Employer Mandate. The House is now scheduled to vote on a delay next week.
There is no lack of news while politicians, officials, experts, and reporters argue the topic.
But for now, America’s insurance companies, employers, benefits managers as well as many state and federal government entities are making many tough, complex changes and preparing for implementation as fast as possible.
“White House delays employer mandate requirement until 2015"July 2, 2013
By Sarah Kliff
The Washington Post
June 28, 2013
“Many uninsured Americans unaware of Obamacare mandate, poll shows”
By Stephanie Condon
“Obamacare’ Poll Finds 42% of Americans Unaware It’s Law”ABC News
By Sarah Parnass
April 30, 2013
“56% Favor Delaying Individual Health Care Mandate, 26% Opposed”
Rasmussen Reports, Public Opinion Polling
July 12, 2013
“House to Vote Next Week to Delay Individual Mandate”ABC News
By John Parkinson
July 11, 2013
Less Than 80 Days for Obamacare Exchanges July 14, 2013
By David Morgan, Reuters
The Fiscal Times
Employer Mandate of Affordable Care Act Delayed until 2015
In a surprising move, the Obama administration decided to delay the enactment of the Employer Mandate portion of the Affordable Care Act (ACA) until 2015 leaving Americans (supporters and opponents) with many questions and an increased uncertainty about the entire healthcare law.
The ACA was made into law on March 23, 2010. With almost 4 (FOUR) years to phase in implementation any delays are indicative of the challenges the healthcare overhaul faces. This delay is seen by some as the administration’s admission that they are not prepared and that the law contains too many flaws.
The Employer Mandate requires that medium to large employers who have 50 or more full-time employees provide health insurance for all of their full-time their workers or face stiff fines…in some cases $2000 per worker. Full-time is defined as a 30 hour or more work week.
The administration claims that less than 0.2 percent of all firms, about 10,000 out of 6 million businesses in the U.S., will be affected by the Employer Mandate.
Even though it actually affects few employers in the U.S., this Mandate and its challenging requirements has spurred outcries as well as changes in many employers’ policies across the country. Many companies have been scaling back on hiring, cutting their full-time workers’ hours to below 30 hours per week, planning to pay the fines rather than provide health insurance, providing insurance with poor healthcare coverage, or using contract workers in place of hiring employees.
And workers who are employed by companies affected by this delay are expected to obtain health insurance through the exchanges even if the company they work for plans to provide health insurance in 2015 when the Mandate is implemented.
This delay also presents an interesting twist because this Employer Mandate portion of the ACA will not be implemented until after the 2014 Senate elections. Depending on the outcome of the election and whether the majority of the Senate resting in the hands of Democrats or Republicans, the mandate could be delayed further, changed considerably, or eliminated completely.
Either way the cost of Healthcare in America remains a volatile, hot topic. And hospital charges have not been curbed by any means. So our assistance in getting hospital bills reduced is needed now more than ever.
Here are a few related articles regarding this recent ACA delay:
“New Winners and Losers in the Obamacare Delay”
By David Francis, Eric Pianin, and Josh Boak
July 09, 2013
The Fiscal Times
“FAQ: What Workers And Employers Need To Know About The Postponed Employer Mandate”
By KHN Staff
Kaiser Health News
July 03, 2013
“Obamacare delay has foes focusing on flaws”
By Noam N. Levey and Chad Terhune
July 04, 2013
Contracted Discounts Don’t Always Equate to Fair Payments
Chapman Consulting Can Help
Our Hospital Bill Review Provides Defensible Means to Fair Charges, Part 1
Payors of medical claims are, of course, accustomed to paying their bills according to the rates or percent discount set forth in the contracts with facilities. But with the rapid rise in hospital charges seen over the last five years or more, how does the payor KNOW the negotiated discount is a fair rate today?
Hospital charges have recently risen at such an incredible rate that a 10% discount offered in the 90’s would require an adjustment of approximately 76% to equal a 10% discount today.
Marc Chapman of Chapman Consulting believes you cannot measure your success by the discount percentage. He stated “For example we may get a claim from one hospital whom I know the discount will not be a large number. Their charges are not as over inflated as other providers in the country. This is why in some case we may be satisfied with a 20% discount with one claim, but are demanding an 80% discount from a claim in Florida that charges $5,000 for a CAT scan.”
As prices have escalated more payors are questioning the fairness of what they are expected to pay on these claims and searching for a solution. Many times the claims end up in litigation in an attempt to resolve the issue. The high dollar claims naturally garner a lot of attention due to the sheer size of the expected payment, but a large volume of smaller claims unfairly paid at too high of a rate certainly adds up too and can make an impact on your bottom line.
At Chapman Consulting we are contacted daily by attorneys and payors searching for a valid, defensible approach that will result in a fair payment in today’s marketplace.
We can assist with any high dollar insurance claim where the payor is frustrated with the inadequacy of the contracted discount and is insistent on a fair price for the services rendered. Larger medical claims including Workers’ Compensation and Texas Non-Subscription, which is an alternative to Work Comp in Texas, many times have the potential for us to negotiate much fairer pricing.
If you are unsure if we will be able to assist with a particular claim, send the claim to us and if we cannot help you we will tell you at no charge. We work hard to get the fairest reduction possible for all of our clients in the fairest way possible!
Study: Affordable Care Act May Result in 32% Increase in Claims Cost
As concerns and speculation continue to rise over the effects and impact of the Affordable Care Act (ACA) on healthcare, studies such as one recently released by the Society of Actuaries seem to support a real need for concern. Media coverage is ablaze as the report causes alarm and the Obama administration attempts to rebuke the actuaries’ findings this week.
The Society of Actuaries, a group of professionals who assess long term costs of risk associated with business, financial and societal issues, released this new study on March 26, 2012. The purpose of the study to was to estimate the cost of adding the uninsured to the individual insurance market and assess the impact of the ACA’s attempt to reduce the number of uninsured in the U.S.
Cost of claims was the focal point of the study as it is the most important factor in determining health care insurance premiums.
When the main provisions of the ACA begin in October of this year the number of insured individuals is expected to more than double. While some of the additional insured will be young healthy adults, many will come from state high risk pools, from very sick individuals who could not previously afford coverage, and from individuals who will leave their employer plans either because the employer no longer offers coverage or because the employee prefers the benefits of the individual market over the employer’s plan.
Cost savings measures put into place by the ACA will have little effect with such a tremendous increase in the number of high risk individuals entering the market and their associated health care costs.
This study suggests health claims costs will increase an average of 32% nationally for insurers by 2017 which will inevitably lead to increases in insurance premiums across the country. This is, however, a general statement as the estimates varied greatly from state to state.
States that currently have high individual claims costs are expected to see a reduction while states that currently have lower individual claims costs can expect those costs to skyrocket. This increase is expected to be so large it is predicted to offset the ACA’s overall goal of reducing the cost of healthcare.
So while the implementation of the Affordable Care Act will result in more uninsured being insured, the costs are expected to greatly exceed today’s current costs.
Society of Actuaries’ press release and other related news articles:
“ACA-Driven Changes in Individual Market Composition Could Lead to 32 Percent Average Increase in Cost; Wide Variability among States”
Society of Actuaries, Press Release
March 26, 2013
“Study: Health law to raise claims cost 32 percent”
By Ricardo Alonso-Zaldivar, Associated Press
March 27, 2013
“Expected price of Obamacare mounts”
“The Affordable Care Act could boost the cost of underlying claims by 32%, with worst-hit states including Ohio and California.”
By Aimee Picchi
March 27, 2013
Growing Shift to Self-Insurance Among Small Businesses
Affordable Care Act Spurring Changes in Insurance Landscape
Until recently, if small businesses could afford to provide health insurance coverage for their employees, they would typically do so through a fully insured plan offered by an insurance carrier. In this case the insurance company assumes all of the risk associated with paying the medical claims for the employees. Small business owners consider the costs of the premiums for the coverage and what plan benefits to offer.
Historically, larger employers were more likely to consider the option of self-insurance (also referred to as self-funding) opposed to traditional insurance coverage. When self-insured, the employer assumes all of the risk of paying the medical claims for their employees. Larger employers are more likely to have the necessary cash flow to pay the medical bills, pay for administration of the plan, and afford stop-loss insurance coverage.
Stop-loss coverage is recommended when employers are self-insured to pay for catastrophic or very expensive medical bills. The coverage has “attachment points” or monetary thresholds at which the stop-loss coverage will take over paying the medical claims. For example, an employee’s medical claims may have to reach attachment point of $100,000, $50,000, or $30,000 before the stop-loss coverage takes over for the employer thereby protecting them from extraordinary expenses that could ultimately close the business. States regulate the limits allowed by insurance companies for stop-loss coverage.
Implementation of the Affordable Care Act’s health insurance exchanges will begin in 2014. Businesses will have a choice to provide insurance through the insurance exchanges or by self-insuring.
There is a sudden increase in the number of small businesses deciding to self-insure across the U.S. Several factors are at play in their decision making. The Affordable Care Act will impose insurance taxes, dictate coverage benefits, and require new regulations on fully insured products. Premiums are expected to rise and no one knows just how much.
Self-insuring is also becoming more enticing to small businesses with insurance companies marketing stop-loss coverage with attachment points as low as $20,000 and $10,000 enabling smaller businesses to consider self-insurance like never before. And with a younger, healthier workforce, small businesses stand to save in healthcare expenses in self-insured plans.
This unexpected shift toward self-insuring is creating a possible, but debatable predicament for the Affordable Care Act.
Smaller businesses employ very young, healthier individuals on average than larger employers. The fundamental feature of the insurance exchanges is to spread the cost of insuring sick individuals and healthy individuals throughout the pool of insured in that particular exchange. If enough smaller businesses pull out of the exchanges, the pool will be made up of a larger portion of older sicker individuals.
In addition, it is suggested that small businesses might be inclined to choose a self-insured plan while employees are healthy, but switch to the exchanges if an employee becomes very ill. This could potentially break down the affordability of the insurance exchanges.
Some states are considering ways to deter small businesses from jumping into self-insured programs such as setting higher attachment points to stop-loss insurance, but would that be fair?
We will continue to monitor the effects of this and other topics related to the Affordable Care Act.
Related news and articles:
“Some Employers Could Opt Out of Insurance Market, Raising Others’ Costs”
By Robert Pear
February 17, 2013
New York Times
“Some small businesses choose to self-insure”
By Jay Hancock with Kaiser Health News
March 14, 2013
Beware: Urgent Care Clinics May Charge Emergency Room Rates
Insist on knowing charges and billing practices before treatment
The Urgent Care Association of America released a report in 2011 estimating there are 9000 urgent care clinics in the U.S. with 300 new centers opening each year. Use of these clinics has gained in popularity due to many factors such as not requiring appointments, short wait times, open 7 days a week, offering a wide range of non-emergency non-life threatening services, and billed charges are similar to a physician office visit.
Freestanding urgent care clinics are a common sight in shopping centers all over the US and smaller clinics are now seen in big-box stores such as Wal-Mart and Target as well as some pharmacy chains around the country. Consumers are so accustomed to seeing these clinics and knowing they can receive quick care that they may overlook what they are really walking into.
Emergency care facilities, freestanding emergency rooms (ER’s), and hospital owned urgent care clinics are frequently mistaken for basic certified urgent care or primary care clinics. All of these facilities vary in billing practices and charges depending on what services are offered and the level of physicians and nurses they have on staff. For example, the clinic may bill all of the services at lower primary care rates. Or some services may be billed at ER rates. Or the clinic may bill a facility fee along with a separate physician fee billed at ER rates. Either way, this can result in being charged ER rates for basic services which, of course, comes as a huge surprise to the unsuspecting consumer.
What is so confusing? Clinics associated with hospitals can sometimes be named in a manner that can confuse or mislead a consumer into thinking they are walking into a basic urgent care clinic. The simple fact that the clinic is a freestanding facility can be confusing as well. Consumers sometimes assume if the building is not attached to a hospital, it must be a clinic. Patients may not see the signage stating that the facility operates as an extension of an ER with high level services and staff. Or they may overlook or misinterpret disclosures on paperwork stating that part or all of the services provided may be billed to insurance at emergency room rates.
So what is the solution? Awareness, asking the right questions, and insistence on clear answers.
Publicity over outrageous billing practices in the U.S. healthcare system is greatly increasing consumer awareness. Patients are compelled more than ever before to ask about a facility’s charges before any services are provided. And a push for price transparency in healthcare has given consumers an edge when asking providers to reveal their prices.
Consumers expect to pay more for a trip to the ER and considerably less for urgent care services. We urge consumers to evaluate the freestanding urgent care clinics near their home so they know what to expect before a need arises. And feel comfortable asking questions up front to determine if the services at an urgent care clinic are priced within their expectations. If not, another clinic is probably just around the corner that may charge a whole lot less.
“Warning: Not all standalone clinics the same”
By Jeff Ehling of Action 13 News
ABC. Action 13. KTRK-TV, Houston TX
January 25, 2013
“St. David's urgent care centers scrutinized over ER-style billing”
By Mary Ann Roser
August 9, 2012
“Hospital urgent-care centers may charge big, like ERs”
“Patients may be shocked when bill arrives”
By Bob LaMendola of the Sun Sentinel
March 25, 2011
“ER billings from urgent care clinic draws complaints”
“Wheaton Franciscan practice peeves patrons”
By Alex Morrell of the Journal Sentinel
JSOnline, Milwaukee Wisconsin Journal Sentinel
Nov. 27, 2010
Time Article - Bitter Pill: Why Medical Bills Are Killing Us
"Bitter Pill: Why Medical Bills Are Killing Us"
By Steven Brill
Time Health & Family
February 20, 2013
Rarely do we see a health care related article cause such a stir. This well researched article written by Steven Brill is a must read. Colleagues sent us emails making sure we read it. Twitter, LinkedIn, and other social sites had thousands of reposts. And just after one week, many related articles and commentary have quickly been published based on Brill’s research and report. Of particular interest to all readers is the lack of transparency in hospital charges. But Brill’s research exposes the lack of relevance of the hospitals’ “Chargemaster”.
The Hospital Bill Reviews we perform at Chapman Consulting regularly reveal the outrageous fees some hospitals charge payors for services, procedures and/or medications. Our clients are aware of the unreasonable charges on the bills they send to us either before or after we perform our reviews. But the research Steven Brill completed for his article points out the absurdity of some charges to the general public who may not have personally experienced or even noticed charges such as this for themselves. The point being that EVERY hospital bill should be scrutinized for mistakes and unreasonable charges. And anything questionable should be investigated.
Below is the link to Brill’s Time article, but we are including the link to several other related articles you may find interesting with commentary and opinions from other industry authorities.
Click on the link below to read Steven Brill’s Time article:
Link to ABC News related article by Ron Claiborne titled “Time Study Finds Some Hospitals Bill Patients Many Times More Than Actual Procedure Cost”:
We are ringing in the New Year with positive attitudes, optimism, and excitement about what’s ahead for our company. As we continue to broaden our business contacts in the marketplace and continue to receive positive referrals from our clients, a marked increase in the volume of claims and consulting work keeps coming our way.
The complexity surrounding most high risk bills, the level of expertise required to support litigation, and the lack of businesses that can defend their work with their own data in our industry has lead to a new level of demand for our services.
We welcome the growth as well as the ability to help ALL of our customers with the issues they are facing…large or small. We love a challenge and the gratification of making a positive impact as we work toward the fairest outcome for both payors and providers. Yet some of the greatest satisfaction comes from simply providing a few suggestions to an individual lost in the claims process.
So as the New Year begins we thank our customers, welcome new business and wish our friends and family a Very Happy New Year!
Hospital Bill Contains Huge Error
Insurance Company Pays the Bill
the Patient Catches the Mistake
"Action 9 investigates Melbourne man's $770K hospital bill"
WFTV News Station, Action 9, www.WFTV.com, Central Florida
November 1, 2012
Can you imagine how shocked you would be if you received a hospital bill after a 4 day stay in the hospital for bypass surgery and the bill was nearly $800,000.00? Wouldn’t you think something must be wrong?
Now how shocked would you be after contacting the hospital only to find out that your insurance company had already paid the bill and there is no balance due?
This is exactly what happened recently to a patient in Florida.
After requesting and receiving the itemized bill, the patient was able to quickly detect the mistake. The hospital bill included charges totaling $685,000 for 5,400 needles. At that point, the hospital agreed to re-issue the corrected bill to the insurance company.
The insurance company in this case, Florida Blue Cross, stated it is customary to pay the charges and then perform an audit to determine if there should be any adjustment.
What a system! We see a few big problems and we see them regularly.
1) Hospital bills regularly contain errors large and small. Consumers are urged to request the itemized bill and review it. Or contact a company like ours to assist in the review.
2) Insurance companies should have policies in place to review large hospital bills for accuracy before they are paid.
3) Apparently this Florida hospital charges $126.85 for one of these particular needles. What is their cost for that needle and what is the markup?
Chapman Consulting has a trusted, supported, and defendable methodology that exposes mistakes and overcharges thereby bringing transparency to hospital charges. We determine a much more fair and reasonable amount for the payor to pay the hospital.
Our company, Chapman Consulting, deals with these issues every day. Our database of financial information on every hospital in the US provides us with the tools we need to negotiate the bill to a much more fair and reasonable amount the hospital and payor will both agree to.
Click on the link below to read the article:
Chapman Consulting, Hospital Bill Review,
provides Fairness and Price Transparency
in Hospital Charges
If you want to buy most anything in the U.S. it is relatively easy to shop, compare prices and make an informed decision to purchase based on several factors including price options. But shopping is not so easy when it comes to hospital procedures and services. However, you may see more transparency emerge in hospital charges as consumers, consumer advocate groups, and the media continue to apply pressure on hospitals for greater transparency.
Although the requests for procedure pricing may be gaining in popularity, it has been difficult for hospitals to accurately get that information for patients. There can be wide variances between the actual cost of a procedure and the hospital’s list price for a procedure. Because of that gap, the provider may not be able to give the patient accurate information.
We all recognize that our healthcare system is a complicated and expensive system; one of the most expensive in the world. Hospital charges for identical procedures and surgeries can vary greatly depending on many factors such as the facility location, competition, accreditation, and the type of hospital.
For example, we see hospital operating room hourly charges across the U.S. range from $2000.00 to $24,000.00. What are they basing their charges on?
Chapman Consulting provides the data and expertise needed to bring fairness and transparency in hospital charges for our clients. And our results are fully defendable.
If you need expert assistance with hospital billing, charges, or liens, please give us a call and let us guide you. Price transparency and fairness is not common yet, but Chapman Consulting can make a difference for you today.
Your Price May Vary
Geographic Variation in Hospital Charges in California
CALPIRG Education Fund
Elizabeth Ridlington and Travis Madsen,
Mike Russo and Emily Rusch,
CALPIRG Education Fund
The dramatic rise in the cost of healthcare in the U.S., which is far greater than the rise of inflation, is having a tremendous negative effect on individuals, businesses, and our government. Hospital charges for like procedures vary greatly from one geographical location to another. However, the degree of difference in charges does not equate to variations in quality of care.
This thorough and detailed report just released by CALPIRG Education Fund illustrates the striking difference in hospital charges for identical or like surgeries in various regions of California. Studies such as the one highlight cost saving opportunities for payors and advocates.
Here is a sampling of intriguing findings from the report:
· In 2009, health care spending per Californian was $6,238, 79 percent more than just 10 years earlier. Family insurance premiums rose by 113 percent from 2001 to 2009.
· Employers who provide insurance to their employees now spend 12 percent of employee compensation costs providing health insurance. Growing health care costs have added to the financial troubles of government: California spent 19 percent of its general fund monies on health care in 2009.
· Hospitals in the hospital region with the highest prices charged 2.7 times as much as hospitals in the lowest-priced region in 2010, according to our charge index.
· Surgery charges were highest in the Alameda and San Mateo areas. The Fresno and Orange County regions charged the least.
· The typical knee replacement surgery performed in a Fresno-area hospital in 2010 was charged at $46,800, versus $127,500 in an Alameda-region hospital.
· In the Sacramento area, the charge for a typical patient having a hysterectomy through the abdomen was $47,500, compared to $34,400 for a typical patient in the Orange County area.
· San Jose-area hospitals listed the charge for angioplasty for a typical patient at $144,900, while hospitals in the Bakersfield region listed the charge at $44,400.
· In the Orange County region, which has relatively low surgery charges, the typical charge for a Cesarean section birth at the most expensive hospital, Saddleback Memorial Medical Center, was $31,000 in 2010, whereas it was less than half that at Hoag Memorial Hospital Presbyterian.
· The typical charge for knee replacement surgery in the Alameda County area, which has high surgery charges, ranged from $59,800 at Alameda County Medical Center—Highland Campus to $164,400 at Washington Hospital—Fremont.
· Higher payments per patient are not necessarily driven by higher quality care, according to research in Massachusetts. A study of per-patient hospital payments by insurers concluded that payment variation between Massachusetts hospitals had no correlation with the quality of care provided by those hospitals.
· Patient income and health status do not explain variations in price. In California, regional patterns of high spending do not follow regional income and health patterns.
· Regional differences in the cost of living only partially explain the regional variations in common surgery charges. Whereas the cost of living in the San Francisco–San Mateo–Redwood City area is 46 percent higher than in the Fresno region, hospitals in the San Mateo and San Francisco regions charge 2.1 to 2.7 times as much as in Fresno.
To say that healthcare in the U.S. today is complicated is an understatement. Complex issues require expert attention to achieve a solid resolution. This study illustrates how essential it is to retain an experienced, knowledgeable medical bill review company such as Chapman Consulting when any payor needs assistance with large, complex hospital charges. Our proprietary database, expertise, and experience allow us to reprice medical charges to the fairest amount possible and fully defend those reductions for our clients.
For more information or answers to any questions, email us at firstname.lastname@example.org or call 800-906-8085. We will do our best to assist you if possible.
Click on the link below to read the report in full:
Patients take frustrating, labyrinthine journey
to uncover hospital costs
By Mary Ann Roser
July 21, 2012
This article is full of specific points that exemplify the high price of hospital charges in the Austin, TX area particularly for the uninsured patient and how difficult it is to navigate and comparison shop due to the complexities of the system. Transparency in hospital prices or charges is also discussed along with the wide range of prices of services within the same hospital or in a geographical area.
The chart at the bottom of the article shows highs and lows of common procedures and treatments in the Austin, TX area from information reported in 2009. The price ranges for the same procedure comparing one facility to the next are staggering.
A self-employed uninsured writer, Walter Simonds, had a large kidney stone leading to a visit to the emergency room at Seton Medical Center Austin. His experience is presented as a case study in the article. One quote from Simonds is not only entertaining, but unfortunately a reality: “If a restaurant were run like Seton, the menu would have no prices, the waiter would bring you appetizers you didn’t want and bill you $1000 per appetizer, and they would send you to another restaurant for the entrée.”
Very few patients are able to navigate the system effectively and obtain truly fair results for themselves. With years of experience reducing and negotiating hospital bills combined with our robust database to support our recommendations, we are here to help you. We will provide you with the information you need for a much more successful outcome or, if you prefer, we will work with the hospital on your behalf.
Click on the link below to read the article in full:
Hospital Bill Review, Chapman Consulting –
Defendable, Defensible Reports, Reductions, & Results
July 12, 2012
Repeatedly we are hearing from our clients, particularly our attorney and law firm clients, that Chapman Consulting’s hospital bill review services are one of a kind. One key reason for this is that our numbers, results and reports are all fully defendable and defensible…something every client benefits from whether an attorney, an insurance company, a TPA, or an individual.
The reason we can fully stand behind our results is simple:
1) Our Database: We have developed and continually updated our proprietary database of financial information on every hospital in the U.S. giving us unrivaled leverage and results when negotiating with the hospitals for a reasonable fee. We do not base our numbers off of Medicare nor do we recommend it.
2) Our Expertise: With previous experience in hospital administration roles and having been in the industry for over 25 years, Marc Chapman fully understands the ins and outs of hospital finance, hospital billing, and the negotiation process. He acts as an expert witness for attorneys proving reasonableness of hospital charges in either case.
3) Our Individualized Attention: We give specialized and focused attention to each client and each claim. We cater to the client that needs assistance with the larger more complex cases rather than repricing thousands of claims per month.
Give us a call today and let us help you achieve better reductions with your claims as well.
Toll Free in the US: 800-906-8085
BMO Insurance Study:
Canadians Without Travel Insurance
Risk Unexpected Vacation Costs
Toronto, Ontario, July 05, 2012 (MARKET WIRE)
BMO Insurance, Summer Travel Insurance Study
The results of a recent Summer Travel Insurance Study by BMO Insurance (Bank of Montreal) demonstrates that while many Canadians love to travel, only 41% travelling to the U.S., overseas, and within Canada purchase proper travel insurance coverage regularly. Yet 4 out of 10 Canadian travellers or someone with them have experienced a need for medical attention while travelling at some point in their lifetime.
· Only half of Canadians (50 per cent) correctly identified that those travelling outside of Canada without medical insurance are themselves responsible for covering the vast majority of medical expenses
· Two in ten (21 per cent) believe their provincial or the federal government pays the bill
· Eleven per cent believe their workplace healthcare plans pick up the tab when somebody gets sick on the road
Chapman Consulting assists in the reduction of medical bills incurred in the U.S. If you or someone you know has a medical emergency while in the U.S., please contact us. We will be glad to discuss your case and determine if we can help.
Toll Free in the U.S. 800-906-8085 or 512-852-8265.
Click on the links below to read about the BMO press release:
Observation vs Inpatient:
Maximizing Reimbursement for
By Marc Chapman
The way work comp patients are classified as “observation” or “inpatient” can have an effect on the amount the hospital is reimbursed. We reviewed one claim that was classified and billed as an inpatient to a work comp carrier, where the patient was in the hospital a total of 4 hours. In the same day we reviewed another claim from a different State which was classified as an “observation” or outpatient, where the patient was in the hospital a total of 5 days. In both cases the hospitals had submitted the claims in a way that maximized their reimbursement under the state fee schedule. By identifying and correcting each claim we were able to find additional savings for the payer.
This topic has been discussed recently in multiple articles. Below you will find links to a few of those.
In the Hospital, but Not Really a Patient
By Paula Span
New Old Age blog, New York Times
June 22, 2012
Outpatient status spikes seniors’ hospital costs
By David Orenstein-Brown
Futurity.org, Health & Medicine
June 5, 2012
Medicare patients get stuck with bills
By John A. Lynch
MetroWest Daily News
June 24, 2012
Medicare: Avoid big rehab bills
By Amanda Gengler
Negotiations can be Very Effective
with Expensive Medical Bills
Most of our business at Chapman Consulting involves reducing high dollar hospital bills to fair charges that are more reasonable for our client and acceptable by the hospital. Whether working for an attorney, a TPA, a claims manager, an uninsured traveler, or an uninsured U.S. citizen, our success in the negotiation process is largely due to our experience combined with the utilization of data we have on every hospital in the U.S.
Often we are hired to negotiate on behalf of our clients, however, some individuals, attorneys and claims managers ask us to provide the information they need to work with the hospital themselves. Our database provides us with benchmarks showing what hospitals are willing to accept from various payors for a wide array of procedures. Our clients are then armed with that information resulting in much more successful negotiations.
It has been common practice for years to negotiate hospital charges in the insurance and bill review industries. Becoming more commonplace is the individual patient taking on the process themselves especially with the cost of healthcare rising at a rate much higher than inflation. And with greater media attention consumers are taking notice. The point is that negotiating hospital bills is an option and our company can verify your charges for you and recommend next steps.
Finally, no matter who is doing the negotiations, the information we have regarding accepted payments by hospitals for services will help achieve a greater reduction on a medical bill.
Chapman Consulting is here to assist and will gladly discuss our services and your options.
Feel free to contact us at 1-800-906-8085.
Patients in the Dark on Medical Costs,
By Christopher Tokin, M.D., ABC News Medical Unit
April 23, 2012
Hospital’s prices no longer have any correlation to their actual cost. At Chapman Consulting, we have recently seen CAT Scans priced at over $12,000.00 and an appendectomy for $110,000.00 for example.
In this article, which is based on a study published in the Archives of Internal Medicine, a patient went to a local hospital for an emergency appendectomy only to find out later that the hospital was out-of-network and his total bill after one night’s stay was $60,000. He found out later that if he had gone to a different hospital the charges would have been closer to $10,000.
It is this topic, the escalating and unfounded charges for hospital procedures, that is the basis for most of our claims reductions and negotiations…arguments in favor of fair pricing for our clients including individuals, attorneys, insurance companies, and municipalities.
Our expertise and experience in the marketplace coupled with our analytics leads to significant but fair reductions our clients deserve and we are able to fully support and defend.
Here are some excerpts from the ABC News article by Dr. Tokin we would like to highlight:
The vast difference in costs among hospitals for similar procedures was the focus of a new study by researchers at the University of California at San Francisco, whose findings were published Monday in the journal Archives of Internal Medicine. After reviewing charges from more than 19,000 patients, the researchers found that the cost for treatment of uncomplicated appendicitis ranged from $1,529 to a whopping $182,955. To put this in perspective, the price of a new Maserati is $130,000.
Health care transparency has been a topic of great debate. In a country where most of price-setting for other products is influenced by consumers, many experts said when it came to health care, U.S. consumers had no power. This, they said, was because they lacked fundamental knowledge necessary in a free-market economy -- the cost of the services for which they were paying.
The reasons for this are many. Few people understand the complexities of health care reimbursement, because how hospitals establish what patients are charged is only abstractly related to actual cost.
"There is no standard in the United States for reasonable prices or reference pricing," said lead study author Dr. Renee Hsia, associate professor of emergency medicine at the University of California at San Francisco. "If you go to a hospital, they can charge you whatever they want. Negotiated rates are trade secrets," she said.
To read the article in full, click on the link below:
The case study on the online journal Archives of Internal Medicine:
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