Archive for the ‘Blog’ Category

Drug Prices Are One Focus of Biden’s Push to Boost Competition

WASHINGTON—President Biden’s executive order to promote business competition lays out a series of steps to lower prices for prescription drugs, including taking legal action against companies that cooperate to keep generic medicines off the market and allowing states and Indian tribes to import drugs from Canada.

The administration also is calling for measures to increase the use of generic drugs and other medicines known as biosimilars, which are essentially generic versions of expensive biological drugs already on the market.

Most of the ideas have been urged in the past, primarily by Democrats but also by the Trump administration. Growing bipartisan support for lowering drug prices could give the current push a greater likelihood of success.

What isn’t in the executive order, however, is any mention of giving the federal Medicare agency the power to directly negotiate prices with drug companies. That approach, favored by many Democratic lawmakers, would potentially be more far-reaching than any of the measures in the presidential order.

“Negotiation of prices is the biggest and best solution” to lowering drug prices, said Diana Zuckerman, president of the National Center for Health Research, a nonprofit organization in Washington. The federal Medicare agency is generally barred by law from such direct negotiation for many prescription medicines, a ban many Democrats in Congress have urged be lifted.

While Republicans generally have been less supportive of such a step, “there is pressure from all sides” for legislative change as the public increasingly seeks solutions to high drug prices, Dr. Zuckerman said.

The recent federal approval of the Alzheimer’s drug Aduhelm from Biogen Inc. put a spotlight on concerns about rising drug costs. The company said the medication would have a U.S. list price of about $56,000 a year for the average patient. Amid concerns about the drug’s effectiveness and cost, the Food and Drug Administration this week narrowed the potential pool of patients in new prescribing instructions.

The drug-industry trade association PhRMA didn’t respond to requests for comment on the administration’s executive order.

In his order on Friday, Mr. Biden noted that the FDA hasn’t issued the necessary rules for high-priced hearing aids to be sold over-the-counter in drugstores. He called on the FDA’s parent agency, the Department of Health and Human Services, to issue proposed rules within 120 days to allow such sales. The administration said the four largest makers of hearing aids control 84% of the market, with the devices costing an average of $5,000 and up for a pair. As a consequence, the administration said, only about 14% of the 48 million Americans who have lost hearing are using the devices.

Mr. Biden also urged the government to curtail what are called “pay for delay” deals between brand-name drugmakers and generic companies. These are contractual arrangements in which generic companies receive compensation for keeping their lower-cost drugs off the market.

“The big picture is that the number of such pay-for-delay settlements has gone down,” said Michael Carrier, a Rutgers University law professor and leading authority on these deals. “In the few cases that make it all the way to the courts, for the most part courts are seeing the delay” and taking action, he added.

A 2013 U.S. Supreme Court decision has cut into such arrangements, Mr. Carrier said. And a Fifth Circuit U.S. Court of Appeals decision this year largely supported a Federal Trade Commission action against such an alleged arrangement. “But my sense is that it’s still going on,” Mr. Carrier said.

The administration’s order also pushes for allowing the importation of less expensive drugs from Canada, a measure that has had considerable support, including from the Trump administration.

“This is a very reasonable thing to do,” Dr. Zuckerman said. “I don’t think Canada likes it, because they’re afraid they may run out of drugs.” She points out that the Canadian market is far smaller than that in the U.S., making the likelihood slim that such a step would have a major impact on U.S. prices.

When the Trump administration proposed such a step in December 2019, a spokesman for the Canadian health ministry, Thierry Belair, predicted any such measure would have only minimal effect on the U.S. market.

PUBLISHED BY THE WALL STREET JOURNAL ON JULY 10, 2021

Effort to Decipher Hospital Prices Yields Key Finding: Don’t Try It at Home

Most of the 20 common medical procedures I attempted to compare were among those 70. But a few, from lists of top outpatient procedures provided by the Health Care Cost Institute, were not. I decided to use the more comprehensive, less friendly spreadsheets for my comparisons, since they contained all 20 of the procedures I’d chosen.

Each carried a five-digit medical code known as a CPT, a term trademarked by the American Medical Association that stands for “current procedural terminology.” The transparency rule requires hospitals to include billing codes, because they supposedly provide a basis for price comparison, or in the rule’s jargony language, “an adequate cross-walk between hospitals for their items and services.”

Much to my chagrin, I soon discovered they don’t provide an adequate crosswalk even within one hospital.

My first inkling of the insuperable complexity came when I noticed that Sutter’s Alta Bates Summit Medical Center in Oakland listed the same outpatient procedure with the same CPT code three times, thousands of rows apart, with entirely different prices. CPT 64483 is the designated code for injection of anesthetics or steroids into a spinal nerve root with the use of imaging, which relieves pain in the lower back, legs and feet caused by sciatica or herniated discs. The spreadsheet showed a maximum negotiated price of $1,912 in row 12,718, $3,650.85 in row 19,014 and $5,475.80 in row 19,559 (let your eyes glaze over for just a few seconds, so you know what it feels like). The reason for the triple listing is tied to Medicare billing guidelines, Sutter later told me. I’ll spare you the details.

My head really began to hurt when I decided to double-check some of the prices I had pulled from the big spreadsheets against the same items on the shorter shoppables sheets. Kaiser’s prices were generally consistent across the two, but for Alta Bates, there were large discrepancies.

The highest negotiated price for removing a breast lesion, for example, was $6,156 on the big sheet and $23,069 on the shorter one. The difference seems largely attributable to the estimated cost of additional services, some rather nonspecific, that Sutter lists on the smaller sheet as accompaniments to the procedure: anesthesia, EKG/ECG, imaging, laboratory, perioperative, pharmacy and supplies.

But why not include them in both spreadsheets? And what do the two dramatically divergent prices actually encompass?

“How many bills they really represent and what they mean is difficult to interpret,” said Dr. Merrit Quarum, CEO of Portland, Oregon-based WellRithms, which helps employers negotiate fair prices with hospitals. “It depends on the timing, it depends on the context, which you don’t know.”

In some cases, Sutter said, its shoppables spreadsheets show charges not only for ancillary services typically rendered on the day of the procedure, but also for related procedures that may precede or follow it by days or weeks.

The listings for Kaiser’s ancillary services do not always match Sutter’s, which further clouds the comparison. The problematic fact of the matter is that hospitals performing the same procedures bundle their bills differently, use different medications, estimate varying amounts of time in the operating room, and utilize more or less advanced technology. And physician charges are not even included in the posted prices, at least in California.

All of which makes it almost impossible for mere mortals to anticipate the total cost of their medical procedures, let alone compare prices among hospitals. Even if they could, it might be of limited value, since independent imaging centers and surgery centers, which are increasingly common — and generally less expensive — aren’t required to report their prices.

The bottom line, I’m afraid, is that despite my efforts I don’t have anything particularly insightful to reveal about how Kaiser’s prices compare with Sutter’s. The prices I examined were as transparent to me as hieroglyphics, and I’m pretty sure that hospital executives — who unsuccessfully sued to stop implementation of the price transparency rule — are not losing any sleep over that fact.

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

A Consumer Guide to Understanding Healthcare Price Transparency: What a Healthcare Consumer Needs to Know to Navigate the Pricing Maze

College Tuition Sparked A Mental Health Crisis. Then The Hefty Hospital Bill Arrived…Published By Kaiser Health News

Despite a lifelong struggle with panic attacks, Divya Singh made a brave move across the world last fall from her home in Mumbai, India. She enrolled at Hofstra University in Hempstead, N.Y., to study physics and explore an interest in stand-up comedy in Manhattan.

Arriving in the midst of the pandemic and isolated in her dorm room, Singh’s anxiety ballooned when her family had trouble coming up with the money for a $16,000 tuition installment. Hofstra warned her she would have to vacate the dorm after the term ended if she was not paid up. At one point, she ran into obstacles transferring money onto her campus meal card.

“I’m a literally broke college student that didn’t have money for food,” she recalls. “At that moment of panic, I didn’t want to do anything or leave my bed.”

In late October, she called the campus counseling center hotline and met with a psychologist. “All I wanted was someone to listen to me and validate the fact that I wasn’t going crazy,” Singh says.Article continues after sponsor messagehttps://17cc5c9df4b675a7804451c4378f1b14.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

Instead, when she mentioned suicidal thoughts, the psychologist insisted on a psychiatric evaluation. Singh was taken by ambulance to Long Island Jewish Medical Center in New Hyde Park, N.Y., and kept for a week on a psychiatric ward at nearby Zucker Hillside Hospital. Both institutions are part of the Northwell Health system.

The experience — lots of time alone and a few therapy sessions — was of minimal benefit psychologically, Singh says. She emerged facing the same tuition debt as before.

And then another bill came.

The Patient: Divya Singh, a 20-year-old student at Hofstra University.

Medical Service: Seven-day inpatient psychiatric stay at Zucker Hillside Hospital in Glen Oaks, N.Y.

Service Provider: Northwell Health, a large nonprofit hospital system in New York City and Long Island.

Total Bill: Northwell charged $50,282, which Singh’s insurer, Aetna, reduced to $17,066 under its contract with Northwell. The plan required Singh to pay $3,413.20 of that.https://apps.npr.org/documents/document.html?embed=true&id=20485462-february-2021-bill-of-the-&beta=true

What Gives: Singh had purchased her Aetna insurance plan through Hofstra, paying $1,107 for the fall term. Aetna markets the plan specifically for students. Under its terms, students can be on the hook for up to $7,350 of the costs of medical care during a year, according to plan documents. Singh’s Northwell bill of around $3,413 reflects the plan’s requirement that she pay for 20% of the costs of her hospital stay.

Although such coinsurance requirements are common in American health plans, they can be financially overwhelming for students with no income and families whose finances are already under the extreme stress of high tuition. Singh’s Hofstra bill for the academic year, including room and board and ancillary fees, totaled $68,275.

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From A Millennial To Her Peers: Want to Help The Underserved? Sign Up For Insurance

As a result, Singh found herself beset by a double whammy of bills from two of the costliest kinds of institutions in America — colleges and hospitals — both with prices that inexorably rise faster than inflation.

For hospitals, there is supposed to be a relief valve. The Internal Revenue Service requires all nonprofit hospitals to have a financial assistance policy that lowers or eliminates bills for people without the financial resources to pay them. Such financial assistance — commonly known as charity care — is a condition for any hospital that wants to maintain its tax-exempt status; that status shields the facility from having to pay property taxes on its often expansive campus.

Northwell’s financial assistance policy limits the hospital from charging more than $150 for individuals who earn $12,880 a year or less. It offers discounts on a sliding scale for individuals earning up to $64,400 a year, although people with savings or other “available assets” above $10,000 might get less or not qualify.

The IRS requires hospitals to “widely publicize” the availability of financial assistance, inform all patients about how they can obtain it and include “a conspicuous written notice” on billing statements.

While the bill Northwell sent Singh includes a reference to “financial difficulties” and a phone number to call, it did not explicitly state that the hospital might reduce or waive the bill. Instead, the letter obliquely said “we can assist you in making budget payment arrangements” — a phrase that conjures installment payments rather than debt relief.

Resolution: In a written statement, Northwell said that although “all eligible patients are offered generous financial payment options … it is not required that providers list the options on the bill.” Northwell stated: “If a patient calls the number provided and expresses financial hardship, the patient is assisted with a financial need application.” However, Northwell lamented, “unfortunately, many patients do not call.”

Indeed, a KHN investigation in 2019 found that, nationwide, 45% of nonprofit hospital organizations were routinely sending medical bills to patients whose incomes were low enough to qualify for charity care. Those bills, which totaled $2.7 billion, were most likely an undercount since they included only the debt hospitals had given up trying to collect.

Singh says the worker who took down her insurance information during her hospital stay never explained that Northwell might reduce her portion of the charge. The student adds that she didn’t realize that was a possibility from the language in the bill they sent.

Northwell said in a statement that after KHN contacted it about Singh’s case, Northwell dispatched a caseworker to contact her. Singh says the caseworker helped Singh enroll in Medicaid, the state-federal health insurance program for low-income people. Foreign students are not generally eligible for Medicaid, but in New York they can get coverage for emergency services. With the addition of Medicaid’s coverage, Singh should end up paying nothing if the stay is retroactively approved, Northwell said.

At the same time the caseworker was helping her, Singh received a “final reminder” letter from Northwell about her bill. That letter also mentioned Northwell’s financial assistance, but only within the context of people who completely lack health insurance.

“Send payment or contact us within 21 days to avoid further collection activity,” the letter said.

The Takeaway: Despite stricter requirements from the Affordable Care Act and the IRS to make nonprofit hospitals proactively educate patients about the various forms of financial relief they offer, the onus still remains on patients. If you have trouble paying a bill, call the hospital and ask for a copy of its financial assistance policy and the application to request your bill be discounted or excused.

Be aware that hospitals generally require proof of your financial circumstances — such as pay stubs or unemployment checks. Even if you have health insurance that covers much of your medical bill, you may still be eligible to have your bill lowered or get on a government insurance program like Medicaid.

You can also find documentation online: All nonprofit hospitals are required to post financial assistance policies on their websites. They must provide summaries written in plain language and versions translated into foreign languages spoken by significant portions of their communities. Be aware that financial assistance is distinct from paying your full debt off in installments, which is what hospitals sometimes first propose.

Although the IRS rules don’t govern for-profit hospitals, many of those also offer concessions for people with proven financial hardship. The criteria patients need to meet to get charity care — and how generous the hospital is likely to be — vary among institutions, but many give breaks to families with middle-class incomes. Northwell’s policy, for instance, extends to families of four earning as much as $132,500 a year.

Singh’s family has paid off her fall tuition and half of her spring tuition so far. She still owes $16,565.

Singh says the back and forth over her hospital bill continues to cause anxiety.

“The treatment I got in the hospital, after I’ve gotten out, it hasn’t helped,” she says. “I have nightmares about that place.” The biggest benefit of her week there, she says, was bonding with the other patients “because they were also miserable with the way they were being treated.”

A Consumer Guild of the 70 Shoppable Services Mandated By CMS: In Layman’s Language, What Are They

Telemedicine Is a Tool — Not a Replacement for Your Doctor’s Touch

Earlier in the pandemic it was vital to see doctors over platforms like Zoom or FaceTime when in-person appointments posed risks of coronavirus exposure. Insurers were forced — often for the first time — to reimburse for all sorts of virtual medical visits and generally at the same price as in-person consultations.

This story also ran on The New York Times. It can be republished for free.

By April 2020, one national study found, telemedicine visits already accounted for 13% of all medical claims compared with 0.15% a year earlier. And covid hadn’t seriously hit much of the country yet. By May, Johns Hopkins’ neurology department was conducting 95% of patient visits virtually compared with just 10 such visits weekly the year before, for example.

Covid-19 let virtual medicine out of the bottle. Now it’s time to tame it. If we don’t, there is a danger that it will stealthily become a mainstay of our medical care. Deploying it too widely or too quickly risks poorer care, inequities and even more outrageous charges in a system already infamous for big bills.

The pandemic has demonstrated that virtual medicine is great for many simple visits. But many of the new types of telemedicine being promoted by start-ups more clearly benefit providers’ and investors’ pockets, rather than yielding more convenient, high-quality and cost-effective medicine for patients.

“Right now there’s a lot of focus on shiny objects — ideas that sound cool — rather than solving problems,” said Dr. Peter Pronovost, a national expert in medical innovation at University Hospitals Cleveland Medical Center, who has written about finding the value of virtual medicine. “We know preciously little about its impact on quality.”

Even so, the financial world is abuzz with investment opportunities. In the first six months of 2020, telehealth companies raised record amounts of funding, with five start-ups each raising more than $100 million.

There are now telehealth apps that target niche markets like the mental health of pregnant women. Others provide medicines, like HIV prevention pills, after a virtual consultation with their doctors. You can even do a digital eye appointment, meet with your dentist virtually to monitor your oral health and orthodontic progress, and send a dermatologist a photo of a suspicious mole.

With telemedicine generously reimbursed, many practices are offering — even encouraging — patients to visit virtually. But, intentionally or not, that choice becomes a revenue multiplier, adding to patient expense.

When he noticed a curious rash, a relative was first directed to a practice’s telemedicine portal and billed $235 for a five-minute video appointment. Since rashes are often hard to evaluate in two dimensions, he was told he needed to see a doctor in person for the diagnosis and then was charged $460 more for that visit. I worry that pandemic-era reimbursement practices have taken traditionally free screening calls and rebranded them as billed visits, with no value added.

Going forward, some types of virtual visits will deserve insurance coverage. Think of follow-up appointments to check blood pressure or an arrhythmia, in which measurements can now be collected at a pharmacy or at home and transmitted to the physician digitally.

For most patients, in-person visits were required in large part because it was the only way a doctor could bill. But they are colossal time sucks, and for people with disabilities they created hardship. After a head injury last April — when I couldn’t yet drive — I was grateful for some insurance-reimbursed virtual visits with doctors and physical therapists.

But there are things that virtual medicine can miss, studies suggest.

One study showed that commercial telemedicine services were much more likely to prescribe antibiotics for children’s respiratory infections than a primary care doctor would be at an in-person visit. That’s in part because if you can’t see into the ear to observe a bulging drum, for example, the safer course is to overtreat — even though that’s contrary to prescribing guidelines intended to prevent antibiotic resistance.

An internist depresses the tongue and looks for pus on the tonsils to detect possible strep throat. A surgeon suspects appendicitis by pushing on the belly to see if there’s pain with rapid release.

Can psychiatrists develop a therapeutic relationship with a new patient equally well over Zoom? In some cases, sure. But better diagnosing of my own post-injury gait problems required office visits with hands-on maneuvers, like checking my reflexes and feeling my joints move.

“There is still real value in being in the same room, in touch, in the laying on of hands,” Dr. Pronovost said. Studies show that such interactions build trust, increasing the likelihood that patients will comply with treatment.

Telemedicine also raises new questions of equity. Even though it promises improved access for people in rural and underserved areas, video visits require high-speed internet, which is less common among the same groups. Alternatively, will the poor get mostly telemedicine clinics (cheaper, since no front-desk staff is needed), while those with good insurance have easy access to doctors’ offices?

Insurers are already rolling back their willingness from earlier in the pandemic to pay for telehealth visits. And providers and insurers are battling over reimbursement levels. Is a video call worth the same as an in-person doctor’s visit? If a commercial telemedicine-only doctor determines a patient requires an in-person assessment, is the fee discounted or waived? And how is a smart referral done if that telemedicine provider is thousands of miles away?

There is much to be resolved and fast, with scientific evidence and doctors, hopefully, driving the decisions. If we allow the market to make the choice, we risk preserving those telemedicine services that make money for business and providers — or save it for insurers — and lose those that most benefit patients. COPY HTML

Hospitals get 1st CMS warning on price transparency failure

CMS has started issuing its first round of warning letters to hospitals not in compliance with the hospital price disclosure rule, a CMS spokesperson confirmed to Becker’s May 5. 

The CMS final rule, which took effect Jan 1., aims to make hospital pricing information readily available to patients to compare costs and make more informed healthcare decisions. To aid with this, hospitals in the U.S. are required to post both a machine-readable file with the negotiated rates for all items and services and display the prices of 300 shoppable services in a consumer-friendly format. 

CMS said it began proactive audits of hospital websites and reviewed complaints submitted to its website after Jan. 1, but didn’t issue its first round of warning letters until April. 

Hospitals will have 90 days to address the findings in the noncompliance letter from CMS. The agency will then re-review upon expiration of that 90-day window. If the hospital is still not in compliance, it may receive a second warning letter or it may be sent a request for a corrective action plan, CMS said. 

The price transparency rule indicates that if a hospital is noncompliant, the agency may request a corrective action plan, assess a civil monetary penalty of up to $300 per day or publicize the penalty on a CMS website. 

CMS said that while the rule says that once a monetary penalty is issued, it will make the name of the hospital public on its website, “releasing this information prematurely could identify hospitals that have already taken corrective actions and come into compliance after issuance of a warning letter.”

As a result, “CMS does not make the list of noncompliant hospitals receiving warning letters available to the public,” a spokesperson told Becker’s. 

After Accident, Patient Crashes Into $700,000 Bill for Spine Surgery; Published By Kaiser Health News

Mark Gottlieb’s life changed in an instant when another driver crashed into his car, damaging four vertebrae in his upper spine and smashing six teeth.

In the months following that January 2019 crash, Gottlieb got the teeth crowned and, for debilitating neck pain, tried injections, chiropractic care and physical therapy. The treatments were all covered by his car insurance.

New Jersey law, as in 12 other states, requires drivers to buy personal injury protection, or PIP, coverage to pay medical expenses. Gottlieb had the maximum: $250,000.

Unfortunately, Gottlieb’s pain persisted. “Nothing was working. The only other thing was surgery,” he said.

Though he wanted his operation performed near his home, Gottlieb said, staff members at the Bergen Pain Management clinic, where he was receiving care, insisted he go to Hudson Regional Hospital in Secaucus. On April 3, 2020, Gottlieb underwent a complex type of fusion surgery on the herniated discs in his cervical spine. He went home the same day.

His pain improved a bit. Then the bills came.

The Patient: Mark Gottlieb, 59, a marketing consultant in Little Ferry, New Jersey, covered for $250,000 in medical costs by his Geico car insurance. He also has an Aetna health insurance policy, which is secondary.

Medical Service: Anterior cervical discectomy and fusion, a type of neck surgery to replace damaged discs with bone grafts or implants to stabilize the spine.

Service Provider: Hudson Regional Hospital, a stand-alone, for-profit facility in Secaucus, New Jersey, and Bergen Pain Management in Paramus, New Jersey.

Total Bill: Taken together, the hospital and surgeon billed Gottlieb more than $700,000. The hospital billed $445,995 for the surgery, an amount reduced to$133,778 by Geico, which ultimately paid $103,354. Bergen Pain Management billed an additional $264,444 for the main surgeon. Based on a review, Geico reduced that to $141,548. It paid $52,365 toward that before Gottlieb’s medical coverage in his auto policy was exhausted. Then it was up to his health insurer or Gottlieb to deal with the rest.

What Gives: When injuries are the result of auto accidents, car insurance is primarily responsible to negotiate and pay the insurance portion of medical bills. That creates a host of financial landmines for patients.

Gottlieb hit all of them.

With the high charges common in the U.S. for treatment, accident victims can easily exhaust the policy limits of even generous personal injury coverage, leaving some vulnerable to huge bills.

Although it’s rare to hear car insurers complain that they paid a hospital or doctor too much, auto insurers “typically pay more for some of the same services” than health insurers, said Robert Passmore, a vice president at the American Property Casualty Insurance Association, a trade group.

That’s in part because auto insurers generally don’t have broad networks of medical providers who have agreed to negotiated discounts off their billed charges, as do health insurers. So patients end up “out of network,” subject to whatever list price the provider charges.

Gottlieb said he checked with Geico before his surgery but was told it had no information for him about networks. With about $190,000 remaining in his PIP fund at the time, he was not too worried. He said efforts to get cost estimates were unsuccessful.

Instead of network rates, car insurers generally use other payment calculations. Some states set specific payments on fee schedules. But not every medical billing code is listed and, in those cases, they sometimes pay whatever the provider bills.

In this case, that was a lot: Gottlieb’s hospital and surgeon’s charges, even after being reduced by Geico, were about eight times as high as what Medicare would have paid.

While Geico generally pays rates set by the state (which are dramatically lower than what was charged), Gottlieb’s bill included a bunch of billing codes not on the state schedule. For most, the insurer paid exactly what was charged. For example, Geico allowed the full price of $65,125 charged by the surgeon for the removal of a damaged disc and paid the hospital $39,195 for nine surgical screws.

By September — with bills from his various providers still rolling in — Gottlieb’s PIP fund ran out after the remaining $52,365 was paid to Bergen Pain Management, short of the $141,548 Geico had recommended as reimbursement for the surgeon.

Insurance pays bills as they are submitted, which is often not in the order in which the treatment was rendered.

“It appears that Bergen Pain Management is still entitled to the $89,183 balance of the billing from your procedure,” Geico wrote in a September letter to Gottlieb, which added that he could submit that balance to his health insurer or pay it himself.

When he submitted the surgeon’s bill to Aetna, he discovered neither the doctor nor hospital was in his insurance network. He had not checked before the operation since he never dreamed that outpatient surgery would exhaust the auto policy.

That means Aetna did not have a negotiated rate with his providers, which might have knocked the charges down dramatically.

Instead, Aetna said it would allow an out-of-network payment of $4,051 for the surgeon, according to a Jan. 28 email to Gottlieb. In a written statement to KHN, Aetna spokesperson Ethan Slavin said that amount was based on Gottlieb’s policy terms, which set physician payments about 10% above Medicare rates for out-of-network care.

Because he had not yet met his annual out-of-network deductible, Gottlieb himself would have to pay the $4,051. He withdrew his request for Aetna to pay. Because out-of-network surgeons frequently go after patients to pay the balance of such bills, Gottlieb is waiting to see if Bergen Pain Management — which has already been paid $52,365 for the surgery — will come after him for more.

Neither the Bergen clinic nor the surgeon has sent him to collections or sued for the amount. Neither responded to multiple emails and phone calls placed by KHN seeking comment.

In a written statement, Hudson Regional spokesperson Ron Simoncini said the hospital “charged the state-mandated fee” where applicable, and where there was no such mandate, “the charges were reasonable.” It is not seeking additional payment.

Citing policyholder privacy, Geico declined to answer KHN’s questions, including how it determines what it will pay.

Did the auto insurer pay too much?

Geico had set an allowable reimbursement of $141,548 as the surgeon’s fee.

“That is an outrageously high surgeon’s fee for this type of surgery,” said Dr. Eeric Truumees, a professor at Dell Medical School at the University of Texas-Austin.

“I do a tremendous amount of complex cervical spine surgery and never had a fee that high even for complex surgery that takes 10 hours,” said Truumees, president of the North American Spine Society. He had no direct knowledge of Gottlieb’s case.

Altogether, Geico recommended and partly paid nearly $245,000 to the hospital and surgeon for the procedure.

In contrast, Medicare would have paid about $29,500 for the entire procedure, with about $1,800 of that going to the surgeon and the rest to the hospital, according to researchers at Rand Corp. who analyzed Gottlieb’s bills at KHN and NPR’s request.

The surgeon’s bill was also high compared with what private insurance usually pays, according to Barry Silver of Healthcare Horizons Consulting Group in Knoxville, Tennessee. Silver compared Gottlieb’s bills with hundreds of similar claims from two carriers that administer employer-based health insurance nationwide. The total Geico paid the hospital was in line with what employers paid and was actually less than the two highest fees seen in his data. But the highest allowed charge in Silver’s database for the surgeon’s fee was $87,549, far less than the $141,458 Geico recommended.

Resolution: Gottlieb remains in the dark about whether Bergen Pain Management will seek the remaining $89,000 toward his bill.

Previously, Gottlieb sued the driver who caused the accident — and won a substantial “pain and suffering” court settlement. He wants to preserve it for future medical needs.

He has filed numerous complaints about his bills with state regulators, lawmakers and his insurers. Aetna sent his surgeon’s bill to its internal Special Investigations Unit following his complaint.

But, “based on our investigation, we determined there was no further need for action,” spokesperson Slavin said.

The Takeaway: Most people are unaware that auto insurance kicks in first after an accident and that it works very differently from health insurance — so you have to pay attention to how the policies coordinate.

That’s especially true if the accident requires major treatment.

If you have a low amount of personal injury coverage in your car policy, your medical bills may well kick over to your health policy. So when you sign up for nonemergency treatment — especially if it’s extensive, like surgery — it’s important to make sure the providers are in your health insurer’s network.

Some auto insurers have networks. Ask whether yours does.

Try to get cost estimates in writing for nonemergency care and compare that with what you have left in your auto policy coverage.

“If it’s more than you have left, it may be possible to negotiate with the hospital or doctor to reduce their charges,” said Silver at Healthcare Horizons.

CMS Hospital Mandated: Their 70 Shoppable Services: A Listing of the Services with the Appropriate CPT or DRG Codes Consumers Need to Know

Trump Rule Gives Small Companies a New Tool to Help Workers Buy Health Coverage

Until October, Andrea LaRew was paying $950 a month for health insurance through her job at the Northwest Douglas County Chamber & Economic Development Corp. in the metro Denver area.

Her company didn’t contribute anything toward the premium. Plus, LaRew and her husband had a steep $13,000 deductible for the plan. But the coverage and the premium cost were in line with other plans available to the company since options for such a small work group — just LaRew and another employee wanted to enroll — weren’t plentiful.

Now they’re trying a new approach. Instead of a traditional plan, the chamber established an “individual coverage health reimbursement arrangement” (sometimes referred to as ICHRA) to which it allocates $100 a month per employee that they must put toward comprehensive coverage on the individual insurance market. These employer contributions may be used to pay for expenses such as premiums or cost sharing.

The reimbursements don’t count as taxable income to workers.

Proponents of the plans say they’re a good option for companies that may not feel they can afford to offer a traditional plan to workers but want to give them something to help with health care expenses. But consumer advocates are concerned they may shortchange some workers.

These small businesses can’t afford to offer health care coverage as the premium prices rise, said Garry Manchulenko, a principal at GMBA Advisors Group in the Denver metro area, who suggested the arrangement to the chamber. “They want to help their employees, but they can’t sustain these increases, particularly at the small-group level.”

Manchulenko said he’s suggesting the new setup for some of his clients, noting that in certain places premiums on the individual market are lower than those for group plans.

LaRew, 48, bought a plan similar to the group plan, but with a monthly price tag of $730 after she factors in the company’s contribution, a savings of more than $2,600 a year.

“It’s still super expensive for two healthy people,” said LaRew, who oversees many of the chamber’s administrative functions. But she appreciates that her premiums are deducted from her pretax income, just as when she was on the group plan.

She also liked having her pick of several plans. “I could choose my own individual plan that suits my family best, and not be tied to a group plan that works great for a co-worker but not for me.”

The new coverage option was established through a rule issued by the Trump administration last year. It could be helpful for workers like LaRew whose income is too high to qualify for the Affordable Care Act’s tax credits that help pay for policies sold on the individual market. It may also be attractive to part-time or seasonal workers who don’t qualify for their employer’s coverage, according to insurance brokers and policy experts familiar with the new option.

But consumer advocates warned that it could encourage employers who had offered a traditional insurance plan to switch to the new arrangement because of the cost savings. That might leave their workers with a more cumbersome enrollment process and less generous coverage.

“I do think there are pitfalls for employees,” said Jason Levitis, a nonresident fellow at the USC-Brookings Schaeffer Initiative for Health Policy. “There’s confusion about the ICHRAs themselves.”

“And even if you know you need an ACA-compliant plan, how do you find one?” he asked, noting the prevalence of deceptive marketing of plans that don’t meet ACA standards.

In addition, because of a quirk in how the new rules work, lower-income workers who bought ACA marketplace plans because their employer didn’t offer coverage could lose the federal subsidies for their marketplace plans if their company puts an ICHRA in place.

Here’s how that could come into play. Only people earning 400% of the federal poverty level or less (about $51,000 for one person) are eligible for premium subsidies. In addition, in order to qualify the coverage offered by an employer must be considered unaffordable to the worker. If an employer offers an individual coverage health reimbursement arrangement, that means workers who would otherwise meet the poverty threshold would also have to contribute more than 9.78% of their income to buy the lowest-cost individual silver plan on the exchange. That amount would be based on the plan’s cost after factoring in the contribution from an employer.

If the worker’s contribution is lower than that standard, then the only assistance they are eligible for is through the ICHRA contribution. Federal rules don’t allow workers to accept both ICHRA contributions and premium tax credits.

“My concern is for people who are out there with a premium tax credit” who might lose that subsidy if they don’t meet the federal standard, said Peter Newell, director of the Health Insurance Project for the United Hospital Fund in New York, who authored an analysis of the new coverage option in October.

There are affordability caps in the ACA for regular employer-sponsored coverage, too, but those caps are generally lower than the caps for ICHRAs. As employers move to offer ICHRAs instead of traditional coverage, some workers will lose their premium tax credits because of the higher affordability threshold, Newell’s analysis found.

If this sounds complicated, it’s because it is, and brokers and advocates agree that many workers will need assistance figuring out what to do. In addition to running the numbers, people may need to work through where to buy a comprehensive plan that complies with the ACA. Such plans can be purchased on and off the exchange, but if workers want the company to deduct their premium costs from their salary, as LaRew did, they must purchase a plan outside of the exchange.

“There are so many paths to take and so many points of confusion, it’s super, super important that employees have some support going through this,” said Cat Perez, co-founder and chief product officer at Health Sherpa, whose technology platform helps people enroll in marketplace plans. It has incorporated information about ICHRAs.

Colorado is working with the broker community to drum up interest in the new product, said Kevin Patterson, chief executive officer of Connect for Health Colorado, the state’s insurance exchange.

“If we can get more people into the individual marketplace that makes it stronger,” Patterson said.

In theory that makes sense, but some analysts worry that the adoption of these new arrangements could drive up marketplace premiums by encouraging employers with sick workers to shift them into the individual market.

“This is a way to offer a lower premium option to some employers, but with the consequence of increasing premiums in the individual market and costs for the federal government via higher premium tax credits,” said Matthew Fiedler, a fellow in economic studies at USC-Brookings, who co-authored an analysis of the new offerings.

Still, larger employers aren’t currently very interested in embracing these new arrangements, said Jay Savan, a partner at human resources consultant Mercer.

The federal rules don’t allow employers to offer an employee both a traditional plan and an ICHRA simultaneously, and most large employers aren’t ready to replace their traditional plans.

“As long as it’s black-or-white, there are precious few employers of size that are willing to take that leap,” he said. COPY HTML