Archive for October, 2019

Hospitals made $21B on Wall Street in 2016, but are patients seeing those profits?

By Martha C. White, NBC Business News; February 7, 2018

The booming stock market has been good for ordinary Americans with retirement accounts, and it also has enriched another class of investors to an extent some find problematic: Some medical economists say that nonprofit hospitals are using lucrative Wall Street portfolios to fatten their bottom lines rather than lower what patients pay for health care.

“The tenor and the responsibility of hospital CEOs has now changed over time,” said Gerard Anderson, a professor of health policy, management and international health at the Johns Hopkins University Bloomberg School of Public Health. “They focus on the bottom line and … they get performance ratings based on profitability,” he said.

Stock market growth and what it means for America

Gary Young, director of the Center for Health Policy and Healthcare Research at Northeastern University, said that “some hospital systems are fairly profitable, but many are not.”

“A general principle is that about one-third have margins that are above zero,” he said. “Probably about one-third of hospitals are pretty close to zero, particularly when you talk about patient care, and about one-third are running in the red.”

Sam Richardson, a health economist at Boston College, said, “It’s kind of tricky because the most profitable hospitals are extremely profitable, but there are a lot of hospitals that are losing money.”

“Smaller hospitals and those in rural locations, as well as a number of large teaching colleges, struggle just to break even, he said. “The question is, how can we pay the profitable ones less without bankrupting the ones that are not profitable or losing money?”

An Axios financial records analysis found that the largest nonprofit hospitals earned a collective $21 billion in investment income last year, money that nearly tripled their 2.7 percent operating profit on patient care. The 6.7 percent profit margin these hospitals earned more than doubled from the previous year.

“There’s nothing wrong with doing that — it diversifies the risks they face associated with patient care revenue,” said Martin Gaynor, professor of economics and health policy at Carnegie Mellon University. “But the overall question, if a hospital, particularly a not-for-profit hospital, has earned a lot, is, what are they doing with those profits?”

The largest nonprofit hospitals earned a collective $21 billion in investment income last year.

William Gentry, an economics professor at Williams College, said there are valid reasons for nonprofit hospitals to hold investment portfolios: Lenders need to see that they have funds on hand before hospitals can take on debt to expand, buy new equipment or make other investments.

“They would say it’s because they want to have a reserve when things go bad,” Anderson said, but added that the current unprecedented bull market has some questioning whether patients should also be deriving some benefit.

“Overall, it’s a good thing — we want the hospitals to be financially viable. However, it’s not clear to me that they’re channeling those profits to give patients lower prices,” said Ge Bai, an assistant professor of accounting at the Johns Hopkins Carey Business School who studies health care economics. “We’re not seeing that.”

As far as patient care costs go, hospitals are locked into a Byzantine system in which the price of anything from an aspirin to an angioplasty is determined by who or what is responsible for picking up the tab.

“The idea of costs in the hospital sector makes no sense,” Anderson said. In general, hospitals lose money on Medicare and Medicaid patients, but make up for that by charging private-sector insurers more.

“It’s not clear that they’re channeling those profits to give patients lower prices.”

“You’re basically cross-subsidizing because of case mix,” Gentry said. Ideally, these patient-care income streams will balance out, but that’s not always the case, he said.

The upshot is that patients, especially those without insurance, can get stuck in the middle. “If you have a small rural hospital that’s Medicare-dependent or an inner-city hospital that’s dependent on Medicaid, they’re losing money. That’s why rural hospitals are in trouble right now,” Gentry said.

Health economists describe the current dynamic as a sort of arms race, with health care providers and insurers each trying to gain market share to get more negotiating leverage.

“If you get a lot of market power on the health insurance side, they’re going to be able to negotiate lower payment rates with hospitals if the hospitals don’t have a lot of market power, but then they’re not passing those savings along to the enrollees in their insurance plans. They’re just pocketing the profits,” Richardson said.

Hospitals have an incentive to reinvest Wall Street income into growing their networks in order to compete. “To acquire hospitals you need to have money. If you want to be the biggest hospital system in your community you have to have a lot of money,” Anderson said.

But bigger hospital networks don’t necessarily mean better, or cheaper, health care for patients.

“There’s no one factor behind that, but lack of competition is certainly an important one,” Gaynor said. “In many areas of the country, hospitals don’t face a lot of competition.”The complications of evolving health care costs

There isn’t a simple answer for resolving this, experts say, in part because the trends shaping how Americans get and pay for health care have been evolving for decades, although the increasing cost of care and the growing extent to which that is borne by patients today have brought the industry to a tipping point.

“When health care costs more, that means health insurance premiums are higher and when premiums are higher, employers pay more,” Gaynor said. “Employees indirectly pay for most of that,” he said, either by receiving less in wage increases than they would otherwise, or shouldering higher premiums, deductibles and co-pays. “All of those things have been happening.”

And unlike most other types of purchases, the opacity of the health care marketplace means Americans can’t shop for a tonsillectomy or knee replacement the way they would for a car or a computer. “We don’t have the robust consumer market we’d like to see for shopping for health care service… There are still a lot of barriers for consumers to really shop effectively,” Young said. “We see a lot of variations in prices of providers that cannot be explained by quality of care considerations.”

The rapid growth of high-deductible health plans has forced the issue into sharper focus. Especially in the early part of the calendar year before deductibles have been met, people face more aggressive billing and collections departments, and policies that may demand they pay for surgeries or other procedures before they even take place.

“If people are paying more out of their own pockets, that’s not necessarily a bad thing, but there is a concern that, when faced with higher expenses, people might forgo care, cut back across the board even on treatment that they should be getting,” Gaynor said. “If somebody lets a heart condition go untreated, that potentially could be serious.”

Healthcare Insurance Premiums Reach All Time High

$20,000 is the new annual premium for employer sponsored health plans. This is a 5% increase compare to last year and 54% over the last decade.per the Kaiser Family Foundation. Plan deductibles have increased 162% since 2009. Wage increases can not keep up with these types of increases.

LocationEmployee ContributionEmployer ContributionTotal Annual Premium
United States$5,431 $14,134 $19,565
Alabama$5,278 $12,723 $18,001
Alaska$4,501 $16,967 $21,468
Arizona$5,786 $13,089 $18,875
Arkansas$5,728 $12,267 $17,995
California$5,376 $14,191 $19,567
Colorado$4,963 $13,351 $18,314
Connecticut$5,352 $15,383 $20,735
Delaware$5,715 $14,383 $20,098
District of Columbia$6,358 $15,452 $21,810
Florida$5,908 $13,026 $18,934
Georgia$5,846 $12,729 $18,575
Hawaii$5,475 $12,444 $17,919
Idaho$5,211 $12,368 $17,579
Illinois$5,378 $15,029 $20,407
Indiana$4,551 $15,000 $19,551
Iowa$5,143 $13,049 $18,192
Kansas$5,248 $13,577 $18,825
Kentucky$5,382 $13,895 $19,277
Louisiana$6,288 $13,006 $19,294
Maine$5,375 $14,180 $19,555
Maryland$6,177 $13,060 $19,237
Massachusetts$5,693 $16,108 $21,801
Michigan$4,280 $13,962 $18,242
Minnesota$6,190 $13,137 $19,327
Mississippi$5,680 $11,704 $17,384
Missouri$5,003 $14,246 $19,249
Montana$5,208 $14,402 $19,610
Nebraska$5,414 $13,601 $19,015
Nevada$6,252 $12,105 $18,357
New Hampshire$5,535 $15,003 $20,538
New Jersey$6,253 $16,041 $22,294
New Mexico$4,723 $13,138 $17,861
New York$5,006 $16,898 $21,904
North Carolina$5,948 $12,263 $18,211
North Dakota$4,982 $12,355 $17,337
Ohio$5,016 $14,624 $19,640
Oklahoma$5,306 $13,439 $18,745
Oregon$5,913 $13,064 $18,977
Pennsylvania$5,111 $15,144 $20,255
Rhode Island$5,493 $13,130 $18,623
South Carolina$5,301 $13,983 $19,284
South Dakota$5,810 $13,920 $19,730
Tennessee$5,514 $12,149 $17,663
Texas$5,964 $13,496 $19,460
Utah$4,594 $13,458 $18,052
Vermont$5,334 $14,795 $20,129
Virginia$6,597 $12,915 $19,512
Washington$3,862 $14,921 $18,783
West Virginia$4,371 $16,338 $20,709
Wisconsin$4,952 $14,603 $19,555
Wyoming$5,205 $14,169 $19,374

US hospitals are now required by law to post prices online. Good luck finding them

Published by Quartz Obsession January 15, 2019

Thanks to new US law, we now know the standard price for a cotton ball at the New York Presbyterian Hospital is $1.15. The list price for a skull X-ray at Orlando Health is $695 and NYU Langone’s average charge for a heart transplant is $1,698,831.13.

Under the Centers for Medicare and Medicaid Services’ price-transparency law that took effect on Jan. 1, all hospitals operating in the US are required “to make public a list of their standard charges via the Internet in a machine readable format, and to update this information at least annually, or more often as appropriate.” The landmark legislation expands on a previous requirement that required hospitals to present their standard price lists, or “chargemaster,” upon request.

The new requirement is intended to address the country’s notoriously complex and shadowy healthcare-billing practices, explains CMS administrator Seema Verma. Being able to access a menu of prices will, in theory, allow patients to compare prices across health institutions, which is something Americans haven’t been able to do without a lot of time and effort.

“If patients don’t know the cost of care and can’t compare prices across providers they cannot seek out the highest quality services at the lowest cost, as they do in any other industry,” Verma explained at a Jan. 10 press briefing. She noted that it’s not unusual to see a 50% to 70% price discrepancy for health services between two providers within the same region. “Unlocking price information is essential to enabling patients to become active consumers.”

“If you’re buying a car or pretty much anything else, you’re able to do some research,” Verma explained in an interview with HealthITAnalytics last year. “You’re able to know what the quality is. You’re able to make comparisons. Why shouldn’t we be able to do that in healthcare? Every healthcare consumer wants that.” Following Verma’s logic, uninsured residents of San Antonio, Texas can now decide whether to get a flu shot from Baptist Medical Center for $53.70 or Methodist Hospital for $86.67.

It turns out, it’s not that simple.

The agony of finding the price list

The spirit behind the US government’s push for price transparency is commendable, but the ambiguity of the actual law foils its best intentions.

For one, because CMS vaguely requires that standard prices be published “on the internet,” they are often very difficult to find. Quartz surveyed the websites of 115 of the largest US hospitals, which together account for 20% of all Medicare and Medicaid funding to hospitals. After spending an inordinate amount of time clicking through pages, we eventually found the lists of 105 hospitals. (Direct links to all of these can be found at the bottom of this article.)

In addition, we were eventually able to track down the price lists for six hospitals who hadn’t seemed to make them directly accessible from links on their website by using Google. In general, performing a Google search often provided a shortcut to the rates, but not always. CMS gives hospitals total leeway on the format and the categorization of the lists. We searched for the name of each hospital, along with the terms “price list,” “standard charges,” “standard prices,” and/or “chargemaster” (as well as using the alternative spellings/phrasings “charge master” or “charge description master”).

We called or emailed the remaining four to ask where their lists were. Going through the phone trunkline or public mailbox resulted in excruciating wait times and no definitive answers. We got the quickest response by contacting the hospitals’ media departments—a service not available to most consumers. An agent at the billing department at the University of Minnesota Medical Center initially told Quartz a price list wasn’t posted on the website, and offered a custom quote instead. After publication, Eric Schubert, Director of Communications and Public Engagement for Fairview Health Services, which operates UMMC, contacted Quartz and directed us to its price list. The three others—Hackensack University Medical Center in New Jersey, Lehigh Valley Hospital in Pennsylvania, and Washington Hospital Center in DC, did not reply to inquiries as of writing.

Even among those hospitals that are technically compliant with the new rule, the vast majority don’t make it especially easy for the average person to find their pricing information. We found that most price lists are buried under many sub-menus or at the very bottom of a long page scroll. Nearly 75% of hospital websites in our study required three or more clicks to find the information.

But some lists require hundreds of clicks to find a particular item. Kentucky’s Norton Hospital price index has 1,560 pages, with three separate pages dedicated to “treatment rooms.”

In many instances, the price list is published on illogical pages. Most hospital sites have a “billing” section, but, for example, the Methodist Hospital in San Antonio decided to put its standard rates on the legal page while Indiana University Health has placed it under the Frequently Asked Questions section of its website. Baptist Hospital in Miami published their chargemaster as fine print. Using small, nearly illegible type on websites is particularly dubious because there is no real reason not to use easily readable formatting, giving there are no space limitations (unlike print publications, for example)—especially when the information is meant for people who need medical care. There are often additional barriers. At least five hospitals required the user’s email, and sometimes name, in order to access the data.

Most of these tactics can be categorized as inadequate user experience (UX) design practices. While good UX seeks to improve someone’s experience, poor UX, sometimes called “dark UX,” can misdirect, frustrate, or confuse users. Though it’s impossible to say whether the dark UX in these cases was intentional or not, “the intention of the business is pretty well-reflected on its website,” explains Khoi Vinh, Adobe principal designer and host of Wireframe, an illuminating podcast that tackles usability matters. “Generally, if a business wants something to be found, they’ll make sure it’s easily findable. The more clicks required, the less likely that people will go through them.” Upon reviewing some websites included in our survey, Vinh suggested that some hospitals may not want the information to be found or, perhaps, they didn’t consider the information important enough to highlight.

Unless you’re a machine, good luck reading the prices

After locating the list, there’s the matter of understanding it. To comply with the law, many hospitals published their entire chargemaster, a list that contains thousands of items—from a cotton ball to an organ transplant—written in terms and codes unintelligible to most consumers. A chargemaster is essentially an internal document that hospitals send insurance companies to negotiate the amount they’re going to receive. The prices listed are typically higher than what most patients actually see on their medical bills, unless they’re uninsured.

The majority of hospital administrators say that CMS’s new law actually makes things more confusing for consumers. Jenni Alvey, senior vice president and chief financial officer of Indiana University Health argues that putting the price transparency burden on hospitals is misguided. “This data is not as useful to patients as it can be in understanding their healthcare costs,” she says. “To further help patients, the Medicare requirements should involve health insurance companies so that they also have a role in price transparency efforts for consumers,” she says in a statement emailed to Quartz.

A spokesperson for Baycare Hospitals echoes Alvey’s concerns: “We much prefer that folks call us or use the online estimator tool. That way, our team is able to talk to them about their specific circumstance and specific insurance.” she says. “Unfortunately, in the US healthcare system, everybody pays something different [even for the same procedure].”

Another problem is the format of the price lists.“I’m completely shocked. In some ways this is actually harmful to patients.”

The law calls for the data to be published in “a machine readable format” that can be easily imported and aggregated. Reader-friendly PDFs, for instance are not compliant, but Excel spreadsheets and, even worse, markup languages like XML, are. Despite what Verma, the CMS administrator, says about the goal of increasing patients’ ability to make patient-oriented price comparisons, the raw pricing data is meant for algorithms, not humans. In the Jan. 10 press briefing, Velma expressed hope that third-party companies might get involved to help translate the data in consumer-friendly formats.

“I’ve been following this, and I’m completely shocked,” says Emily Ryan, a Washington, DC-based UX advocate. “In some ways this is actually harmful to patients because you’re now giving them false information. In this age of fake news, we have to be very careful as UX and content stewards on what we put out there.” She says that false expectations about pricing can even compromise a hospital’s credibility. “Once we lose trust, it’s very hard to get it back.”

“[Healthcare] is one of the most sacred areas we design in and we have to be very careful,” says Ryan. She adds that any efforts to improve transparency goes beyond publishing prices. It must also include translating the medical jargon to plain, user-friendly language.

CMS needs a UX design bootcamp

Perhaps the most vexing aspects of the hospital-price transparency law is that there are no penalties for non-compliance. CMS also has no mechanism to monitor how and if every US hospital has published their rates. CMS says they’re soliciting ideas from the public on how to enforce the law. Verma declined to comment to Quartz’s query about the timeline on when this might happen.

With any luck, CMS will invite a UX design expert on its advisory panels. Clearer empathy for how users parse information will strengthen agency-wide efforts to promote transparency in prices and quality of care.

“There are many, many interesting opportunities for design to improve the scenario,” suggests Vinh.” The fact that data is being made available, potentially someone can come along and create a meta price index that’s truly usable,” he says. (Start-up idea!)

“It’s crazy that we have this enormous healthcare system, and it’s so complex and you’re expected to negotiate it on your own with no help,” says Vinh.

Hospital chargemaster pages
Atlanticare Regional Medical Center
Aurora Health Care Metro Inc.
Baptist Health System (San Antonio)
Baptist Hospital (Miami)
Baptist Medical Center (Jacksonville)
Barnes Jewish Hospital
Brigham and Womens Hospital
California Pacific Medical Center
California Pacific Medical Center R.K. Davies Medical Center
Carolinas Medical Center
Cedars-Sinai Medical Center
Central Dupage Hospital
Chippenham and Johnston-Willis Medical Center
Cleveland Clinic Hospital
Communityu Regional Medical Center
Cooper University Hospital
Covenant Health System
Crozer Chester Medical Center
Dallas County Hospital District
Doctors Medical Center of Modesto
Duke University Hospital
Florida Hospital
Geisinger Medical Center
Grady Memorial Hospital
Grossmont Hospital
Hahnemann University Hospital
Henry Ford Hospital
Hospital of the University of Pennsylvania
Huntsville Hospital
Indiana University Health
Jackson Memorial
JFK Medical Center
Kennestone Hospital
Las Palmas Medical Center
Loma Linda University Medical Center
Long Island Jewish Medical Center
Lucile Packard Childrens Hospital
Massachusetts General Hospital
Medical City Dallas Hospital
Medical University of South Carolina
Memorial Hermann Hospital System
Memorial Hermann Texas Medical Center
Memorial Hospital for Cancer and Allied Diseases
Memorial Regional Hospital
Methodist Healthcare Hospital (Memphis)
Methodist Hospital (San Antonio)
Milton S. Hershey Medical Center
Montefiore Medical Center
Morristown Memorial Hospital
Mount Sinai Health System – Beth Israel
Mount Sinai Hospital
New York Presbyterian Hospital
New York University Hospitals Center
North Carolina Baptist Hospital
North Shore University Hospital
Northshore University Health System
Northside Hospital
Northwestern Memorial Hospital
Norton Hospitals Inc.
Ochsner Clinic Foundation
Ohio State University Hospital
Orlando Health
Presbyterian Intercommunity Hospital
Rainbow Babies and Childrens Hospital
Riverside Methodist Hospital
Robert Wood Johnson University Hospital
Ronald Reagan UCLA Medical Center
Rush University Medical Center
Scott and White Memorial Hospital
Sharp Memorial Hospital
Spectrum Health Hospitals
St. Francis Medical Center
St. Joseph’s Hospital (Tampa)
St. Joseph’s Hospital and Medical Center
St. Luke’s Hospital (Pennsylvania)
St. Luke’s Hospital (San Francisco)
Stanford Hospitals and Clinics
Sunrise Hospital and Medical Center
Swedish Medical Center
Tampa General Hospital
Temple University Hospital
The Childrens Hospital of Philadelphia
The Methodist Hospital (Houston)
Thomas Jefferson University Hospital
UC Davis Medical Center
UC Irvine Medical Center
UC San Diego Medical Center
UC San Francisco Medical Center
University Hospital (Lexington)
University Hospitals Case Medical Center
University of Wisconsin Madison Hospitals and Clinics
University of Alabama Hospital
University of Chicago Hospitals
University of Colorado Hospital
University of Florida Health Shands
University of Iowa Hospitals and Clinics
University of Kansas Hospitals
University of Massachusetts Memorial Medical Center
University of Michigan Hospitals and Health Centers
University of Minnesota Medical Center
University of North Carolina Hospital
University of Oklahoma Medical Center
University of Pittsburgh Medical Center Presbyterian Shadyside
University of Texas MD Anderson Cancer Center
University of Virginia Medical Center
Vanderbilt University Medical Center
VCU Health System MCV Hospital
West Jersey Health System
Westchester Medical Center
William Beaumont Hospital – Royal Oak
Winthrop University Hospital
Yale New Haven Hospital

By Anne Quito & Amanda Shendruk January 15, 2019

Quartz Obsession

Published January 15, 2019 by Quartz Obsession

The Huge Waste in the U.S. Health System

The article below written by Austin Frakt identifies the amount of waste in the American Healthcare System.

A study finds evidence for how to reduce some of it, but also a large blind spot on how to remove the rest.

By Austin Frakt

  • Oct. 7, 2019

Even a divided America can agree on this goal: a health system that is cheaper but doesn’t sacrifice quality. In other words, just get rid of the waste.

A new study, published Monday in JAMA, finds that roughly 20 percent to 25 percent of American health care spending is wasteful. It’s a startling number but not a new finding. What is surprising is how little we know about how to prevent it.

William Shrank, a physician who is chief medical officer of the health insurer Humana and the lead author of the study, said, “One contribution of our study is that we show that we have good evidence on how to eliminate some kinds of waste, but not all of it.”

Following the best available evidence, as reviewed in the study, would eliminate only one-quarter of the waste — reducing health spending by about 5 percent.

Teresa Rogstad of Humana and Natasha Parekh, a physician with the University of Pittsburgh, were co-authors of the study, which combed through 54 studies and reports published since 2012 that estimated the waste or savings from changes in practice and policy.

Because American health spending is so high — almost 18 percent of the economy and over $10,000 per person per year — even small percentages in savings translate into huge dollars.

The estimated waste is at least $760 billion per year. That’s comparable to government spending on Medicare and exceeds national military spending, as well as total primary and secondary education spending.

If we followed the evidence available, we would save about $200 billion per year, about what is spent on the medical care for veterans, the Department of Education and the Department of Energy, combined. That amount could provide health insurance for at least 20 million Americans, or three-quarters of the currently uninsured population.

The largest source of waste, according to the study, is administrative costs, totaling $266 billion a year. This includes time and resources devoted to billing and reporting to insurers and public programs. Despite this high cost, the authors found no studies that evaluate approaches to reducing it.

Other categories of waste examined by the JAMA study encompass inefficient, low-value and uncoordinated care. Together, these total at least $205 billion.

With more than half of medical treatments lacking solid evidence of effectiveness, it’s not surprising that these areas add up to a large total. They include things like hospital-acquired infections; use of high-cost services when lower-cost ones would suffice; low rates of preventive care; avoidable complications and avoidable hospital admissions and readmissions; and services that provide little to no benefit.

In addition to wasting money, these problems can have direct adverse health effects; lead to unwarranted patient anxiety and stress; and lower patient satisfaction and trust in the health system.

Here the study’s findings are relatively more optimistic. It found evidence on approaches that could eliminate up to half of waste in these categories. The current movement toward value-based payment, promoted by the Affordable Care Act, is intended to address these issues while removing their associated waste. The idea is to pay hospitals and doctors in ways that incentivize efficiency and good outcomes, rather than paying for every service regardless of need or results.

Putting this theory into practice has proved difficult. “Value-based payment hasn’t been as effective as people had hoped,” said Karen Joynt Maddox, a physician and co-director of the Center for Health Economics and Policy at Washington University in St. Louis and a co-author of another editorial of the JAMA study.

So far, only a few value-based payment approaches seem to produce savings, and not a lot. Some of the more promising approaches are those that give hospitals and doctors a single payment “as opposed to paying for individual services,” said Zirui Song, a physician and a health economist with Harvard Medical School.

“Savings tend to come from physicians referring patients to lower-priced facilities or cutting back on potentially lower-value care in areas such as procedures, tests or post-acute service,” he said.

There is evidence of savings from some bundled payment programs. These provide a fixed overall budget for care related to a procedure over a specific period, like 90 days of hip replacement care. Accountable care organizations also seem to drive out a little waste. These give health groups the chance to earn bonuses for accepting financial risk and if they reach some targets on quality of care.

The final area of waste illuminated by the JAMA study is fraud and abuse, accounting for $59 billion to $84 billion a year. As much as politicians love to say they’ll tackle this, it’s a relatively small fraction of overall health care waste, around 10 percent. More could be spent on reducing it, but there’s an obvious drawback if it costs more than a dollar to save a dollar in fraud.

Because health care waste comes from many sources, no single policy will address it. Most important, we have evidence on how to reduce only a small fraction of the waste — we need to do a better job of amassing evidence about what works.

Austin Frakt is director of the Partnered Evidence-Based Policy Resource Center at the V.A. Boston Healthcare System; associate professor with Boston University’s School of Public Health; and adjunct associate professor with the Harvard T.H. Chan School of Public Health. He blogs at The Incidental Economist@afrakt

Did Your Insurance Company Deny Your Claim? Now You are in the Insurance Healthcare Prison.

Experiencing denied claims can be very frightening and frustrating. Your first reaction was how is this possible when I pay for health insurance.  Most of us do not really know what our health insurance covers and what are the procedures to secure payment.  Hopefully, the following can help.

Health insurance companies deny healthcare bills for a variety of different reasons. Normally there is a legitimate reason for the denial.  The healthcare consumer should be prepared for such an event.  They occur more than you may think.  Healthcare providers receive the denials from the insurance company and automatically bill the consumer.  The consumer is now responsible financially for  the bill.  The following are common reasons bills are denied.

  1. Medically Unnecessary Services

The medically unnecessary denial is a denial that insurance companies use when a claim does not meet their medical criteria for payment. This can occur when your healthcare provider has improperly or did not fully document your medical service.

2. Medical Service was not Pre-Authorized

Many healthcare services require the healthcare provider to obtain an authorization from the insurance company, prior to service, to obtain payment.  Healthcare providers sometimes miss obtaining a pre authorization.  If this occurs, the healthcare consumer can call the ordering doctor and healthcare provider to appeal the denied claim.  Most insurance companies will grant a retro pre authorization which means they approve the service after the service was rendered. .  If not, the healthcare provider should not bill you.

3. Non-Covered Charges or Services

Some healthcare services can be excluded for payment as defined in your health insurance policy.  These excluded services are generally those not frequently used by the healthcare consumer or are very expensive procedures.  Before receiving or scheduling services, contact your insurance company to insure they are covered.

4. Wrong Information on the Claim

Healthcare providers and insurance companies can make errors that will result in a denied claim.  Examples for these types of errors are:

  • Wrong Insurance Information
  • Wrong Patient Information
  • Transposed Information on the Claim
  • Wrong Information in the Insurances Companies Computer System

Anything can go wrong.  Be prepared to deal with these situations.

Insurance companies will send the healthcare consumer an Explanation Of Benefits (EOB) that will have specific codes explaining why a claim has been denied.  Take the time to understand the reason for the denial.  The reasons will lead you to the next steps in appealing the denials

Tells us your story…maybe we can help!! Go to the Our Home and select Contact Us.

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