Beware of out-of-pocket costs

 

When you sign up for next year’s health plan during the open enrollment period, beware of out-of-pocket costs.  The key to making an informed decision is to understand the (1) real costs you will be expected to pay and (2) the specific coverage your health plan offers.  Unfortunately, many of the costs are not obvious and you really need to read the fine print to understand exactly what is covered and you will need to ask a lot of questions to know the specific costs you will be expected to pay.

 

With health care costs rising every year, you will be paying more for your health plan benefits in the form of increased monthly premiums, co-payments, co-insurance and deductibles.  Many employers are encouraging workers to select consumer driven high-deductible plans (CDHPs). These plans require employees to pay more out-of-pocket charges for visits and services, but have a much lower monthly premium.  CDHPs can save you hundreds of dollars on premiums per month and very often high-deductible plans are paired with health-savings accounts (tax free dollars)   When you select a high-deductible plan, you will be financially motivated to make the most of your health care dollars and you will be more than willing to shop around for the best value before visiting a provider.  Most people don’t realize this but it is possible, with a high-deductible plan, to actually spend less out-of-pocket dollars during the year.  Here’s how.

 

Plan	Monthly/Annual Premium	Deductible	Co-Pays throughout the year	Out-of-pocket health care costs for  the year	OutofPocket Amount Spent
High-deductible	$300 month,  $3,600/year	$5,000	$0	Premiums + Deductible	$8,600
Traditional plan	$900 month, $10,800/year	$0	7 co-pays @ $35 = $245	Premiums + Deductible + Co-pays	$11,045

 

Here’s what you need to know before choosing a new health plan. 

 

Identify what your co-payment amount is for health care service like doctor visits, hospital stays, outpatient procedures and diagnostic tests.   Be aware of co-insurance charges, which typically require you to pay a percentage of the total cost of service. 

 

Understand what services are NOT covered.   Read the fine print and don’t assume anything. 

 

Before you sign up for a health plan, you should try to understand how your insurance plan’s contracted rates (with health care providers) compares to other insurance plans contracted rates.  In other words, what amount are you expected to pay when you visit your doctor? Is the fee $100, $70 or $50? If you need to have an MRI will your plan require you to pay $600 or $2000? I should warn you that this is very difficult information for consumers to obtain, but it can save you hundreds of dollars on out-pocket expenses when you understand these negotiated prices.  A provider typically has many different prices for the exact same service because insurance plans negotiate different prices for the service.  Your health care dollars will go a lot further if your insurance plan has negotiated low rates with health care providers. 

 

Quest for the true price of an MRI

Why would a consumer overpay for any health care service?  This happens all the time because consumers have no idea what they are being charged for a service, and they have no idea what the fair price is for this service.  Since our health care system doesn't provide consumers with meaningful tools like Amazon.com, Expedia.com or Travelocity.com to research and compare prices/services --consumers are basically on their own to determine the best value.

I just read about a consumer that paid $1900 for an MRI at Wake Forest Baptist Medical Center.  The consumer has BCBS health insurance so we are not talking about an inflated price for someone that is uninsured.  About six months ago I conducted research on "the quest for the true price for an MRI".  I ended up researching 50+ tools available to consumers to help determine the price of an MRI at many providers around the country.  The results:  an MRI (in this example for a knee) can cost a consumer anywhere from $600 (in Milwaukee at SmartChoice MRI) to $3500 (Dartmouth Hitchcock Medical Center in New Hampshire) - for the exact same diagnostic test. An MRI is an MRI is an MRI.  Isn't it?  So why the huge variance in price?  In fact, if you are charged more than $1000 for an MRI I would suggest you negotiate down the price, offer to pay cash at time of service and start negotiating with the price that Medicare reimburses providers for an MRI- which is $463.  You can download a copy of my research here.

To help you make the most of your health care dollars and find the best value for routine services like MRIs, x-rays, mammograms, vaccinations, office visits, lab tests, vision and dental services, I suggest you use OutofPocket.com to compare and share prices of health care services so you know what others are paying for similar type of services.  Information can be powerful.  

Consumers are starting to find more cost-effective options for elective surgery by traveling to foreign countries where they have the procedure done and save themselves tens of thousands of dollars. A Wall Street Journal story in late September reported that an open heart surgery in the U.S. can cost about $100,000 and can be done an at internationally accredited hospital in India for only $8,500. A hip replacement surgery in the U.S. averages $45,000-$50,000 but can be performed for $12,000 in Singapore.

According to the Deloitte Center for Health Solutions, 750,000 patients traveled abroad in 2007 for in-patient and outpatient procedures. A private health-care provider in Singapore says the number of U.S. patients they treated in 2007 doubled from a year earlier.

What’s interesting is a growing number of insurers are starting to realize the cost-savings of medical tourism. Not only does the insurer save money, but the employer and the employee also benefit from the reduced costs. For the complete story on Paying Workers to Go Abroad for Health Care, be sure to read the article in the Wall Street Journal

When it comes to saving money and shopping around for the best value when purchasing groceries, books, electronics, clothing, automobiles, and vacations - you have the tools you need to help you find the best value. You know how to compare costs, clip coupons, look up prices and research recommendations to determine value. But do you know how to save money on your prescription drugs, contact lenses, dental care and doctors visits?  CNN.com recently published an article to help you save money on drugs and doctors. The article covers tips on:

Dental Care: Have you considered using dental schools for your next dental check-up? These schools charge a lot less than regular dentists. The American Dental Association publishes a list of accredited dental schools you can review.

Contact Lenses: Why pay more than you have to for contact lens? You can purchase your next pair of contact lenses online and save yourself up to 50% of what your eye doctor charges for the exact same contacts. Here is one of many online shopping sites to compare costs.

Prescription Drugs: If you don’t have a sufficient prescription plan, why pay more than you have to when you fill your prescriptions? The Consumer Reports Best Buy Drugs website tells you if there is a less expensive drug that could work the same as the one you’ve been prescribed.

Hospital Bills: It is common knowledge that hospitals often make billing errors. You should always review the detailed charges on your bill, and expect to find errors. The Patient Advocate Foundation will help you review your medical bill for no charge.

If you need to become a better consumer of health care (who doesn't?) be sure to read the book recently published by change:healthcare  titled "My Healthcare Is Killing Me."  This book is available online and provides a practical guide to health care covering insurance basics, some helpful terminology, how to choose a provider, and how to select an insurnance plan that's right for you.  The book includes many helpful resources, definitions and examples.  This is a quick read of 140 pages -- well worth your time.  . You will be a more informed health care consumer after reading this book.  Congratulations to the change:healthcare team that wrote this book.

One excellent reason to purchase health insurance is so that you do not have to pay full price (list) for services.  When you have health insurance, you get the discounted (negotiated) price for services that the insurer has negotiated with the health care provider.  If you don’t have insurance, then you are on your own to negotiate a price with the health care provider – and you should definitely ask the provider for a discount. 

 

Insurers and health care providers consider t the “negotiated prices” proprietary information that they don’t want this price publicized.  These negotiated prices are what insured consumers are expected to pay for services, but they are kept a secret and it’s difficult, if not impossible, to find out what these prices are until after you have visited the provider. 

 

From what I have heard, Blue Cross Blue Shield negotiates the best discounts from provider list prices.  Where BCBS negotiates 60% off list, other insurers negotiate 40% off list.  Knowing this can help consumers make informed decisions when purchasing health insurance.

 

Office visit list price:  $100

BCBS negotiated price for office visit: $ 40

Other insurer negotiated price for visit:  $ 60

 

It’s also very interesting that a provider can have up to 100 different prices for the exact same service, one for each type of insurance they accept.  Most price differences have more to do with a doctor’s negotiation power than with the quality of care from the provider.  Wouldn’t it be nice to know up front what providers offer the best value?

 

EyeCare America just announced a public service program to provide senior citizens with free eye exams.  Individuals should call the help line at 1-800-222-3937 to determine if they are eligible.  For additional information on this program, visit the news release.

The perfect health care system is based on transparency. The Healthcare Infomatics blog posting by Michae Craige titled, Healthcare Transparency – a vision of change, shares some interesting thoughts on how transparency, if done correctly, will create incentives at all levels, and motivate the entire health care system to provide better care for less money.  Transparency is a major component of a perfect health care system.

Providers Paying Consumers $$$ for Sharing their EOBs

Here’s an interesting approach to exposing “true” health care prices (the negotiated price providers really charge for their services).  As you well know, most providers and health plans are unwilling to share pricing information before services are delivered.  In a bold move, two innovative health care providers are collecting contracted prices for services from consumers - for a reward. In April 2008, Alliance Community Hospital in Ohio launched a program offering consumers $100 if they share their EOBs so the hospital can find out how much health insurers paid for health care services received at rival hospitals. They received a lot of participation and this program is still active today. Just recently, Wuesthoff Health System in Florida announced a new transparency initiative offering consumers $100 in gas cards if they share cost information on health care services from providers in the surrounding area. This is an attempt to provide consumers with meaningful information on the true cost of health care services.

Transparency brings good things for consumers like:

1. lower prices
2. more innovative services
3. expanded choices
4. better patient care

Wouldn't it be nice to see more providers sharing true price information with consumers?

Today, HSAeducator.com, an online community and educational website on HSAs, posted a blog entry about a consumer's personal experience using OutofPocket.com to look up prices for a strep throat culture. 

" I typed "strep throat" into the OutofPocket.com website and POOF, it gave me pricing for strep throat testing in my area. The tests ranged from $10.00 to $55.00. Unfortunately, the locations listed were really not that near my house, so I couldn't hit the $10.00 strep test store. But I will have an idea of whether the price of the test was good, bad or ugly. "

Thanks for sharing your story.   We invite everyone to use this search tool to look-up prices for routine health care services (MRIs, vaccinations, x-rays, lab tests, office visits, mammograms, dental, vision) and don't forget to post/share prices you paid for actual visits after you receive your statement or EOBs for the service.

Good news for consumers. There are some simple steps you can follow to make sure you keep control of medical bills and make sure you are not being overcharged for services.

First, review your bill very carefully. You can request an itemized bill. Use free online tools to find out what other consumers paid for similar services using OutofPocket, CMS Medicare CPT look-up tools, and Vimo.

Second, you should know if your insurance covers your treatment. If your procedure falls into a gray area, you should submit letters and official paperwork from providers, including referrals that explain why the treatment was necessary.

Third, remember you always have an opportunity to negotiate down the charges. The total charges that appear on your medical bill have no relationship to what the provider will accept as payment in full.  Health care providers bill everyone the same amount, from Medicare to private insurers to the uninsured.  However, the full charges that appear on your bill are much higher than the provider’s actual costs.  The Government and private insurers negotiate a reduced price for services.  Here’s an idea to consider – start by asking your provider how much Medicare would pay for a procedure similar to yours.  Using this information, you should talk to the CFO or billing manager and ask for a reduction to the provider’s actual cost, plus 25%.  By the way, doctors have also suggested patients without insurance try this approach.

Fourth, hire an expert to help you review and appeal your medical bills. If your medical bills are complicated and large, you can hire a medical billing review service.

Source: Elizabeth Ody, “Some simple steps to keep control of medical bills,” Premium Health News Service, September 1, 2008.

The next time you have an injury or illness that requires immediate care, consider using an urgent care center rather than the traditional hospital Emergency Room.  Urgent care centers are staffed by physicians, offer sort wait times, are less crowded, cost a fraction of what hospital ER visit would cost you, and you can walk in without an appointment.  The urgent-care centers are equipped to handle anything from a simple cut and treating broken bones, to deploying advanced life-support equipment.  Some offer discounts and payment plans and many health insurance plans cover urgent-care clinics.

The CDC published interesting statistics on the unnecessary and overuse of hospital Emergency Rooms. In 2005, 115.3 million people visited Emergency Rooms and only 5.5% of the patients needed to be seen immediately. Only 21% of theses ER visits were identified as semi-urgent and needing to be seen within one to two hours, and 14% of these visits were evaluated as non-urgent

Source: Laura Landro, "Options Expand For Avoiding Crowded ERs," Wall Street Journal, August 6, 2008.

SmartMoney just published an article, Top 5 Times to Haggle for a Better Deal.  The article incudes useful tips on how you can get a better deal the next time you purchase health care services. 

Pay cash upfront.  Providers sometimes will offer you the same lower rate that they negotiate with insurance companies, or possibly even a cheaper rate if the consumer agrees to pay cash at the time of service.  I tried this and it worked!  Just be sure to ask up front.   

Compare Costs.  Check your providers rates against other doctors in your area.  You can look this information up through tools provided by your insurer, or by using the community search tool, OutofPocket.com to view patient posts of actual prices paid for services.  Providers have been know to lower their fees to stay competitive so be sure to do your homework and research prices before you visit the provider.

Last month the Wall Street Journal forum, Doctors Charges, had an interesting discussion on consumers experience comparison shopping for health care services.  Everyone seemed to agree that is is practically impossible to find out beforehand what patients are expected to pay.    Read what other consumers had to say about their experiences shopping for health care services. 

AOL recently posted tips to help you save money on health care costs.  Consumers should not have to pay full price for services.  One of the tips recommended that consumers should use OutofPocket.com as a tool to help them compare costs and find out what other consumers paid for similar services.  "Providers are often willing to negotiate, with both insured and uninsured patients and those whose insurance only covers a portion of their health expenses", says Jonathan Pletzke, author of "Getting a Good Deal on Your Health Insurance Without Getting Ripped Off."

Paying cash up front helps consumers save money because providers do not have to process billing and insurance forms, and are often willing to discount prices in return for payments at time of service. 

Be sure to compare costs before purchasing health care services.  The more you know, the better informed you will be to negotiate a fair price for services.

If you think you were overcharged for health care services, you should contact MYINSNET.com, an insurance negotiating service that offers consumers assistance in negotiating medical claims.   This company states they have saved insurance companies millions of dollars and an average savings per claim is about 25%.  The same techniques and resources they’ve used to save insurance companies money are now available for individual consumers.  Any patient with a medical bill greater than $200 is eligible to send their bill to INSNET for negotiation.  Consumers can use services such as INSNET to determine if the amount they paid for health care services is reasonable.  If the charges are deemed excessive, INSNET will attempt to negotiate directly with the provider and INSNET charges a fee based on the amount saved on the patient balance.  There is not risk for consumers because they charge no fee if there is no savings.   When you visit the MyInsnet, be sure to indicate you heard about their service on OutofPocket.com and they will offer you an additional savings.

 

Bottom Line Secrets published an article several years ago on tips you can use to fight back if you think you are being overcharged for health care services.  This article was recently brought to my attention because this information still applies today.  Here is a brief summary of some of the tips.

To avoid paying more than you should for doctor bills

1. Remember to negotiate.  Try asking your doctor for a discount. 
2. Have blood tests done at a lab, rather than at your doctor’s office. 
3. Don’t pay for follow up visits. 
4. Ask your doctor if tests prescribed are necessary. Doctors often order unnecessary diagnostic tests including MRIs, CAT scans and X-rays. Ask what these tests will determine.

Tips on how to spot over billing on hospital bills

1. Request a daily itemized bill. 
2. Avoid using the hospital pharmacy.  Have your prescriptions filled at your local pharmacy.
3. Watch out for double billing and review your bill detail carefully.
4. Don’t pay for the last day at the hospital if you are discharged before noon. 

A recent article, Click here for the best health care, offers some very practical advice on how consumers can make smarter decisions when selecting doctors and hospitals - and how to plan ahead for medical expenses. 

Selecting the right doctor

Consumers can find out about a doctor's experience and a hospital's success rates, and even find information on what these services cost.  First, get to know your doctor.  Do some research to find out what other patients have to say about the doctor.  Personal recommendations carry a lot of weight and people trust what other consumers have to say.  Check if your doctor is board certified.  Search the American Board of Medical Specialties to find out.  Make sure your doctor has done this procedure before.  Use Vitals.com to find out how many times a doctor has performed certain procedures in a year, and look up historical data to determine if there are any sanctions or malpractice claims.  If you cannot find this information on public sources, call the doctor’s office and ask. You want a doctor that has lots of experience.  Know the price before you visit the provider.  If you have out-of-pocket expenses, it’s well worth your time to call your doctor and your insurer to determine the amount you are responsible for.

Selecting the right hospital

Hospitals provide a lot more performance data.  Just like doctors, hospitals get better with experience.  You can use Vimo.com to find out how many times a hospital has performed a procedure.   RevolutionHealth.com also provides similar information.  HealthGrades is an excellent source of quality ratings for hospitals. You can purchase a report from HealthGrades to obtain cost and quality information. 

I am pleased to announce the new release of OutofPocket.com, version 2.0.  Our new search engine enables consumers to look-up prices for health care services, and allows providers to list their prices/services in the directory - free of charge.  In addition, the search engine features expanded search technology and searches for health care price data across other public price transparency tools.

I welcome all your feedback and comments on this new release and I would appreciate if you could help us spread the word.  As you know, the more people that contribute and use this tool, the more powerful it will become for everyone.

Thank you for all that you do to help promote health care price transparency. 

NEW FEATURES IN OUTOFPOCKET.COM VERSION 2.0

 

(1) Enhanced search engine provides more relevant search results

(2) Easy for consumers to post/share their own visits and prices they paid for services

(3) Comprehensive search results - searches other websites that publish pricing and websites that offer price transparency tools

 

PRICE DATA COLLECTED FROM MULTIPLE SOURCES

 

·         Providers can submit price lists for their services

·         Consumers are invited to post/share prices they paid for actual visits, along with their personal recommendations on the provider

·         Claims Data from Businesses, Health Plans or TPAs

·         Government CMS Medicare payment data

·         Websites that publish prices for health care services including hospitals, diagnostic testing facilities, clinics and physician practices

·         Price Transparency Tools on public websites including health plan tools and state price transparency tools

 

BENEFITS for BUSINESSES

 

·         Load your claims data into OutofPocket.com to enable your employees to search for their true out-of-pocket costs for specific service

·         Employees can use OutofPocket.com to search for prices for specific services in your network plan

·         Encourage employees to collaborate and post prices they paid for health care services, to share these good deals with other employees

·         Eliminate providers that overcharge - Use OutofPocket.com to direct your employees to affordable, low-cost providers

·         Avoid providers with poor performance by encouraging employees to share recommendations on provider visits

 

BENEFITS for CONSUMERS

 

·         Look-up prices, comparison shop and find the best value for routine health care services in your neighborhood

·         Tool makes it easy for you to post/share prices you paid for actual services with other consumers

·         Share your recommendations on a specific provider with other consumers

 

BENEFITS for PROVIDERS

 

·         Add your true prices/services to the directory – free of charge

·         Consumers can easily find your services and link to your website

·         Include additional information about your practice, services

·         Search results links directly to your website

·         Provides additional exposure for your services

 

 

The California HealthCare Foundation (CHCF) offers some great tips for consumers that are interested in comparison shopping for non-emergency hospital services.    The consumer tips provided by the CHCF are based on the results of a recent mystery shopper study conducted at 64 California hospitals.  Here are some of the highlights, but be sure to visit their site to read all the tips. Most important, be sure to ask the right questions before using hospital services.

 

1.     Call first.  Consumers should call a hospital to obtain pricing information, rather than wait to ask for pricing in-person.

 

2.     Know the CPT or ICD-9 code.  This is the specific American Medical Association (AMA) code assigned to each medical procedure or service and is used for billing purposes.  It’s actually a lot like a specific part-number for an electronics you purchase.   When you know the specific code (part number), you can compare apples-to-apples.  Once your doctor has explained the service or procedure you need, ask your doctor for the CPT code.  It will save you time and money.

 

3.     Ask about a discount.  If you don’t ask, it almost certainly won’t be offered.  Find out how much and under what conditions discounts apply.  You might find that paying by cash or using your credit card entitles you to discount.

 

4.     Find out what’s included.  There’s little consistency among hospitals in terms of the type of prices quoted, making applies-to-applies comparisons difficult.  You should ask as many questions as necessary until you are comfortable with the information about what specific services are included.  If you are not getting the answers you need, ask to talk to someone in Admitting, Financial Counseling, Billing or the Cashier’s Office.

A recent article in RNcentral.com provides 25 tips on how consumers can save money on health care services – even if you do not have health insurance.  Here is a brief summary, but be sure to checkout the entire article for additional information and helpful resources. 

Medical Care

• Take advantage of walk-in clinics
• Consider alternative therapies 
• Try using a nurse practitioners instead of a doctor
• Research medical tourism
• Check out a health fair for free routine screenings
• Volunteer for medical school clinics
• Use phone medical services for less complicated issues
• Avoid the weekend
• Review your bill for errors
• Negotiate your bill

Prescriptions and Equipment

• Shop around and compare prescription prices using resources like Consumer Reports, the AARP or the Medicare Rights Center
• Buy store brands for over the counter medications
• Request generic prescriptions
• See if you qualify for freebies 
• Double up on medication
• Cut your medications in half 
• Get creative. Work with your doctor or pharmacist to see if you can't find a lower cost solution to your prescription drug costs
• Reuse and recycle. Friends, neighbors or even a church group may have equipment that can suit your needs at a greatly reduced cost 
• Shop for frames at retail stores or large chains instead of the eye doctor’s office

A recent article in the March issue of Consumer Reports identifies some contributing factors to the high cost of health care.  The article High Health Care Costs discusses some of the factors including:

 

1. Hospitals and doctors  - in our current health care system financial incentives are given for costly interventions rather than preventative care

 

2. Drug companies -  rise in prescription drug spending and large amounts of money being spent on pharmaceutical advertising (have you seen all the commercials?)

 

3. Insurance companies - increase in administrative and marketing costs contribute to inflated premiums

 

4. Politicians and government regulators - policies affect the bottom line

 

5. Lawyers- malpractice insurance premiums and defensive medicine (overuse of diagnostic tests)

 

6. Health care consumers - modifiable behaviors such as poor eating habits, lack of exercise, and smoking, all contribute to poor health

 

Here’s my recommendation.  Some of these factors consumers have no control over, but two of these factors consumers are definitely in the drivers seat.  First, healthy lifestyles result in healthy people. Make good choices.  Good health is priceless.  Second, consumers need to educate themselves.  Do your research to help you make informed choices about health care services.  Use tools like OutofPocket.com to look up prices, find the best value and make the most out of your health care dollars.  If you shop for health care services the way you shop for electronics, automobiles, and clothing, you will save yourself thousands of dollars.

 

Be sure to read the article When Consumers Are Driving Health Care, in the March 6, 2008 edition of the Raleigh News & Observer written by Max Borders, a Policy Analyst at the Civitas Institute. 

 

The seven million consumers with high-deductible health plans and HSAs, will definitely be able to relate to this story.

 

 

This free prescription discount card is available to residents in 47 states in a joint effort of your local county government and the National Association of Counties (NACo).  The discount card can be used at a participating retail pharmacy and can save you an average of 20% on your prescription medicine.  Nine out of ten pharmacies nationwide accept this card.   The discount card may be used any time your prescription is not covered by insurance.  There are no restrictions and no limits on how many times you can use this card. 

When I looked into this program for Cook County, Illinois, I discovered that many different counties across 47 states (excluding Connecticut, Rhode Island and Vermont) participate in this prescription discount program.  Be sure to checkout the NACo website to find out if your state/county participates in this free program.  This program targets the uninsured, and insured consumers where prescriptions are not covered by their insurance plan.

In January, the Consumer Health Care Blog posted ten useful tips to help consumers reduce their medical bills.  If you haven't read this article that was originally published on BankRate.com, be sure to check it out.

1. Ask your doctor to be your ally
2. Compare costs by using CPT codes
3. Find friends in the billing department
4. Negotiate lower prices, payment arrangements
5. Ask if recommended services are necessary
6. Explore state-sponsored hospital web sites
7. Check your insurance company’s website
8. Ask for the Medicare rates
9. Go generic
10. Sweat the small stuff