As a graduate student in the health field I often get phone calls from various family members and friends asking what I happen to know about different drugs, procedures, and devices. I was having one such conversation with my younger sister last spring. She had just completed her undergraduate education, started a new job, and was very proudly financially self-sufficient for the first time.
We were talking about birth control. Her yearly exam was coming up and she was considering the therapeutic and cost efficacy of different forms of contraceptive. I had recently attended a class where the intrauterine device had been discussed as a cheap, effective form of contraceptive that is underutilized in the United States. A few strokes of the keyboard and my sister and I were able to find that with no insurance, the hormonal IUD costs $843.60. We quickly calculated that at 20 bucks a month for the pill, after 5 years, the IUD would end up being significantly cheaper – even before taking her insurance in to account.
A few weeks later my sister excitedly told me that she had discussed the IUD with her doctor who had informed her that it would only cost around $200 with her type of insurance. She had already scheduled her appointment to have it placed.
While the procedure itself went off without a hitch, the next phone call I received was of a decidedly different tone. She had just received her bill in the mail – a bill for $1100!
“How is it possible that it cost so much more than they said it would?”
“I don’t know!”
“Did you call the insurance company?”
“Yes. They covered some of it, but the $1100 left is for me to pay.”
My sister was frantic. As a new graduate just entering the workforce, she was living pay check to pay check. There was no way she could come up with an extra $900 at the drop of a hat.
But something didn’t add up. How could this device and the procedure cost so much more than all the information had said it would? “Let me talk to them for you,” I said.
After weeks of un-returned phone calls and department transfers, I was finally able to secure a billing inquiry. The inquiry itself took months. By the end of the process my sister was fending off collection calls from the hospital trying to explain that we were disputing the charge. In the end it all came down to a coding error on the part of the physician. The visit had been erroneously coded as an inpatient procedure. The amount of the correct bill? One hundred and fifty dollars.
While it would be easy to chalk this up as a happy ending, I think the moral here is a bit different. My sister did everything right. She researched the procedure on her own, discussed it with her doctor, and called her insurance company when the bill was different than she expected. I am not sure many of us could claim to be that involved in our own healthcare and yet had circumstances been even slightly different, she would have ended up paying $900 more than she was supposed to.
I, like most Americans, didn’t even know what medical coding was or how it worked until I started working in the field. Yet when I go to the grocery store, or buy plane tickets online, I know exactly how much it is going to cost me before the sale is final. It seems to me that if providers, patients, and payers all had access to the same cost information up front, it would drastically improve communication, reduce the potential to overlook errors, and better allow patients to play a more decisive role in their own health care.
Michaela Dinan, a PhD student in health policy and management at the University of North Carolina.
On Labor Day Costs of Care, a Boston-based nonprofit, offerred $1000 prizes for the best anecdotes from doctors and patients that illustrate the importance of cost-awareness in medicine. Two months later we received 115 submissions from all over the country – New York to California, Texas to North Dakota, Alaska to Oklahoma. We feel these stories are poignant because they put a face on some of the known shortcomings of our system, but also because they unveil how commonplace and pervasive these types of stories are. To learn more about the contest and read more of our stories please visit www.CostsOfCare.org (Twitter: @CostsOfCare).
I agree with your details , fantastic post.
My new insurance does not cover preventive yearly physicals so I did not make an appointment when I normally would have. Then I got a letter from my doctor’s office that he could no longer refill prescriptions unless I came in for tests so I did. Now the insurance is denying payment and so far I have been unable to get the office to re-code the charges as doctor ordered. Now a collection agency is threatening my credit.
What Is Guardian Life Insurance Trying to Hide?
Guardian Life Insurance Company of America, through its outside counsel law firm, Leader & Berkon LLP, deposed a non-party witness, John Zaher of The Public Relations and Marketing Group, LLC. The deposition, which was sought under the guise of determining if a confidentiality agreement was violated, had no legal basis related to Dr. Berton Forman’s $12 million lawsuit against Guardian, but was instead held merely to harass and intimidate Dr. Forman and Mr. Zaher as a way to prevent them from exercising their rights to free speech and to educate the public about the tens of billions of dollars in insurance fraud that occurs overall each year.
The attorneys at Leader & Berkon LLP — the law firm representing Guardian — sought a deposition of Mr. Zaher late last year, but, after initially granting a temporary restraining order in preventing the deposition from going forward, the court subsequently granted them a very limited deposition. On January 28, the deposition was held, during which the attorney representing Guardian continuously sought to go beyond the limited scope authorized by the court and to harass and intimidate Dr. Forman and Mr. Zaher. Meanwhile, the law firm was presumably billing Guardian at a rate of hundreds of dollars per hour. The deposition, lasting several hours, was pointless and did not deal with the facts of the case. Rather, it only served to increase legal fees to benefit Leader & Berkon and to create a chill on Dr. Forman and Mr. Zaher’s rights to free speech. Rather than stick to the issues such as healthcare fraud, Guardian’s outside counsel went on a fishing expedition, asking Mr. Zaher questions that were irrelevant to the case and outside the scope granted by the court.
Guardian had earlier attempted to dismiss Dr. Forman’s lawsuit but the New York State Supreme Court denied the motion. Guardian later appealed the decision, which was upheld by The N.Y.S. Supreme Court, Appellate Division, First Department, finding that the suit could proceed to trial on each and every count — a major blow to Guardian and its efforts to sweep Dr. Forman’s lawsuit under the rug and proceed with business as usual.
Dr. Forman, a 25-year veteran anesthesiologist and owner of a patent for healthcare fraud software, was engaged by Guardian over a six-year period to find overbilling and fraud on the part of doctors and hospitals, for which Dr. Forman would receive a fee of 25% of all recovered funds. Upon reviewing hundreds of thousands of claims provided by Guardian, Dr. Forman identified tens of millions of dollars in overbilling and fraudulently paid claims. He discovered that large hospital groups were, in many instances, triple billing or using incorrect codes on claims they submitted to Guardian for payment. Considering that his patented software is able to discover fraudulent billing for anesthesia, the case reveals just how rampant insurance fraud is, when you take into account other areas of medicine, amounting to tens of billions of dollars per year, according to health industry experts.
The lawsuit alleges that Guardian failed to pursue the unrecovered monies due to its having entered into separate contracts with Preferred Provider Organizations (PPOs). Despite entering into such agreements, Guardian asked Dr. Forman to perform audits of claims from providers that were part of the PPOs’ plans. Guardian’s contracts with the PPOs effectively precluded any possibility of recovery by Dr. Forman for nearly all of the claims that Guardian asked Dr. Forman to audit.
“This deposition was only to harass and intimidate myself and PRMG,” Dr. Forman said. “But it begs the question: What does Guardian have to hide? What is it about the case that Guardian doesn’t want its ratepayers or regulators to know about?”
A key point is that EVERYONE does not have access to the same information and is not even charged the same for identical procedures and office visits. And often the health care provider does not even know all the other fees and costs that will be billed to the patient! This is why, as much as I would like to, I do not choose a health plan where I can “shop around” for various services even though it would cost less – both for me and my employer. There is no way for me to know if I am paying a fair market value nor to have defined ahead of time all the additional fees and costs that may be added to a bill. As a result I pay extra for a plan with deductibles and copays and a defined list of providers. However, the insurance company and my employer cover the bulk of costs and I do not have to argue over bills that are $100s or $1000s of dollars more than I expected – at least most of the time. A single-payer system would eliminate all these issues.
“It is a good thing we don’t use a coding system to buy food.”
What is the nutritional info on the back? I love the one on water showing how poor for your health drinking water is. FDA? USDA coding your beef. What size eggs do you prefer? Are you into certified organic? Can you make champaign anywhere but france?
The correct question is how can food be so requlated and suffer under so much labeling, reportinm, and inspection yet still not outpace inflation like healthcare? Maybe it has something to do with people, in most cases, buy their own food?
It is a good thing we don’t use a coding system to buy food. We would all starve waiting for the glitches to get solved.
” The section on injections alone is 150 pages. And federal regulations stretch for 150,000 pages in small print.”
Medicare patients getting IUDs? Wow.
As I said…
“I think the real travesty here is that nobody at either the physician’s office or the insurer would pick up the phone”
Sounds like this was all done through a large hopital/physician complex. The doc may not even have been on the same continent as his billing department. Lots of posters here hate small practices, but there are advantages to a situation in which the doc talks to her insurance clerk multiple times daily.
Oh please – funny how a story like this can be used to justify any number of positions – from the evils of HIT, “Obamacare”, and the power of “consumer-driven” care. All I see are a bunch of people all shifting blame to someone else. No one is willing to take any responsibility for improvement of the health system. Its always someone else’s fault.
Sounds like consumer-driven care works. The money was coming out of her pocket, so she took the trouble to get it corrected.
“No law says you have to join PPOs and bill on patients behalf, you can always go back to cash.”
Am gradually moving in that direction with more patient groups. Works great for me. But the horror stories I hear from patients about trying to get reimbursed by their insurers are unbelievable, and now there’s nothing I can do to help them.
Looks like the author got a real life lesson in ‘healthcare policy and management’. Hopefully she can find a way to help change an absurdly dysfunctional system.
pcp are you really saying assignment of benefits doesn’t help the doctor? Undo that and the patient would have been given a bill when she was leaving. She would have passed out at the price and as soon as they revived her it would have been fixed. I seem to recall doctors haveing a pretty big hand in assignment becoming the norm. No law says you have to join PPOs and bill on patients behalf, you can always go back to cash.
I think the real travesty here is that nobody at either the physician’s office or the insurer would pick up the phone and resolve the issue for the insured / patient, presumably, because neither considers it part of their job. It’s as though neither providers nor insurers ever heard of the concept of customer service. For those with employer provided health insurance, the patient is not the customer in the insurer’s eyes. The employer is.
” I’m looking forward to a time when I can find out what it costs before I leave the property”
As long as you want to have your charges handled by a third party, the insurer, that is not going to happen.
The current system, as described above, does not benefit either patients or doctors. Hmmm . . . I wonder whom it does benefit?
This, my friends, is all about the dangers of HIT devices, though this was a mere billing error. There are patients who did everything right who are dead prematurely because of misclicks and cognitive errors associated with these care record devices, not to mention deaths due to the defects and flaws in these devices.
Does any one know why the FDA has not enforced the F D and C Act?
Glad that finally the mistake was fixed.
The doctor’s mistake doesn’t surprise me. I remember interviewing the CEO of Mayo, and he complained Medicare regulations were 1500 pages long. The section on injections alone is 150 pages. And federal regulations stretch for 150,000 pages in small print.
I cannot understand why in an era of electronic record-keeping and billing medical and insurance records take so looooong to get processed. The few times I have had medical attention it seems to set in motion a daisy-chain of paperwork that in some cases is still in motion three or four months later. If auto repair were billed similarly I would be getting billed separately not only from the place where the car is serviced, but separately by the mechanic, the parts supplier who furnished needed parts, the courier who brought them and the valet who brought the car from the parking lot to the door to be picked up. I realize medical care is complicated, but I’m looking forward to a time when I can find out what it costs before I leave the property. Credit transactions happen in the twinkling of an eye and when the ATM machine disburses cash it vanishes instantly from my account. Mistakes are easily, often instantly, rectified by phone lest customers take their business elsewhere. Large and small operations that expect to stay operational never overlook good customer service.
Medical care, however, is sui generis in the world of accounting.
Mistakes occur in every line of work. But it seems when they happen in medical care they glitch they system worse than a fire in the kitchen of a restaurant or an armed robbery at a bank. I want to think this anecdote is an exception, not the norm, but I know better. If I had the answer I would gladly furnish it but I don’t. As a “consumer” (forgive the term… it seems providers and insurers are consuming more than clients) I’m hoping that the concept of ACO’s will eventually bring meaning to the word “Accountable.” As in doing more businesslike accounting.
Good point in regards to upfront knowledge of costs. Glad to hear it eventually got ironed out.
An all too common and frustrating story. It’s happened to me, too. But I’ve also benefited from it: I’m still waiting for bills and EOBs for one hospital stay from about three years ago and a visit to an ophthalmologist over a month ago!
Congratulations to Costs of Care for sponsoring the “competition”.
However, I think we still haven’t identified the culprit here. The flaws and frustrations are characteristic of “insurance” pure and simple. Claims adjusting is always painful, and there are good economic reasons to explain it. That’s why insurance should be rare and only for catastrophic, unanticipated events.
The law notwithstanding, health insurance should not cover birth control or the costs of normal childbirth, which are events for which we can plan.
Obamacare, needless to say, takes us even further in the wrong direction.
Many commentors are missing what I believe is a core issue here, and its not just a wrong code:
“After weeks of un-returned phone calls and department transfers, I was finally able to secure a billing inquiry. The inquiry itself took months. By the end of the process my sister was fending off collection calls from the hospital trying to explain that we were disputing the charge”
This is (in large part) the real travesty here. A health care system that is totally opaque with regard to information about services and payment. I have had a different version of this exact story happen. In the end, after almost a year of wrangling, I never did find out what I had been charged for. What pains me is the number of people who simply pay the bill. This isn’t about fraud, its about a system entirely disconnected from the cost/quality/value equation. This isn’t about doctors, who I believe for the most part are oblivious to all of this. Generally its the finance and billing people who do all of this stuff. On a related note; I challenge anyone to make sense of an EOB.
My bet is that this was an unintentional error that had unfortunate results. Most likely the physician or a coder unknowingly clicked “IUD insertion, inpatient” instead of “IUD insertion, outpatient.” Errors are bound to happen from time to time, but this is an example of how electronic records/coding can make it all too easy to mess up.
In my mind the greater systemic problem is the difficulty an individual has in determining exactly when and where the error occurred, and how to promptly correct it.
Yes, an all too common and very regular occurrence. By the time it is straightened out there is a ‘blemish’ on your credit report, which will require explanation if you are applying for a loan, car loan, mortgage, etc. The non-system is set up to favor the insurer, collection agency, hospital, and merchants. At one time it was rare for a hospital or health care provider, entity to send anyone to collections.It was considered immoral, and a stain on a professional to do so. Usually a call to the billing entity would straighten the matter out or at least delay collection until the matter was settled. This is just another feature of our sick society.
The coding issue benefits the AMA (copyright). At one time there were no codes. Just a written or type statement with the diagnosis and procedure code. It worked well for a long time. The bill was understandable for all concerned. Medicare and computers have brought us to this point.It is far too easy to send out an incorrect bill, and let the system do the rest. It really is just common sense….we are in a system that has self destructed, and the microchip is supreme…we are just along for the ride.
I work as a broker and we see this happen all the time. I think it is becoming noticed more now because most people have gone from paying only a small copay to a deductible and coinsurance. No one questions who gets paid or how when it is $20 but when you get a bill for $1000 or more, it is a whole other story.
I’m glad she got the bill fixed! Small errors can lead to huge bills!
Gov’ts invented diagnostic codes, the AMA invented the CPT (procedure) code to assure physicians were fairly paid for services. Now we shift to the 10 digit ICD-10 diagnostic/procedure codes. As long as people must enter the codes there will always be the opportunity for error–transposition of digits or simply mis-coding based on illegible medical records or poorly dictated physician notes.
Health care is complicated and when it works, miracles happen and when it goes wrong it goes very very wrong and it takes forever to correct. In between remember the patient is ALWAYS responsible for the bill. NEVER assume your provider knows the code! I always ask the billing office to show me the code(s). It makes them double check their coding.
Yeah, and if you listen to the fraudulant chants for “go after the medicare fraud providers and we will reclaim billions of dollars to add to the savings of this PPACA legislation”, this doctor would at best be served a summons to court or a monkey trial Medicare tribunal, at worst be jailed and lose a license because “this is fraud and the tip of the iceberg of doctors like this!”
Innocent mistakes that get claims adjusters for the government foaming at the mouth. Guilty before innocent is how this systemt is working, folks, and just google “doctors and false accusations of Medicare fraud” and read the stories of good intentions screwed by government bureaucracy without soul.
And this is what will be part of PPACA. I await my challengers’ retorts!
Good post; unfortunate story.
Complications in healthcare informatics – including 5-digit CPT® code mistakes as well as foul-ups that involve physicians’ “voluntary” 10-digit National Provider Identifier numbers – ALWAYS grant insurers more time to pay past-due bills owed to their clients and their clients’ doctors.
Dr. David Edward Marcinko MBA