By Mary Drueke-Collins, FSA
As more and more Americans face high deductible health plans (HDHPs) and increased up-front out-of-pocket costs, it is more important than ever to closely monitor medical bills for errors. According to the Medical Billing Advocates of America, more than 80% of medical bills contain errors, which can cost patients thousands of dollars. Those errors may be simple mistakes, double billings, or in some cases, abusive charging practices.
One of the biggest problems for unforeseen fees is when an individual utilizes an out-of-network provider.
Most insurance plans – medical, dental, and vision – have preferred provider networks that help reduce the charges when an in-network doctor is used. If an individual does not use an in-network provider, he or she may be subject to “balance billing.” Here’s what occurs under a balance-billing situation:
- The insurance company reimburses out-of-network doctors according to a schedule or a percentage of the usual and customary amount. Often times, the doctor’s charge is more than the reimbursement they receive from the insurance company. The doctor can then ask the individual to pay the balance, or the difference between what the insurance company reimburses them and their charges.
- If an individual uses out-of-network providers, not only will he or she be responsible for the deductible, coinsurance and copayments, but he or she may also be responsible for this balance billing. Balance billing is common in medical, dental, and vision plans.
If an individual is covered by an HMO plan, he or she may not even have coverage for non-network doctors and hospitals. Before an appointment to see a doctor or have a procedure is done, make sure the doctor is in-network and the procedure(s) will be covered by the insurance plan.
Know The Benefits
Some medical plans have copayments for services – emergency room visits, inpatient hospital stays, certain kinds of surgeries. It’s a good idea to understand what benefits an individual’s insurance plans cover before he or she has a major service. Then there won’t be any surprises after the procedure.
Most medical plans provide coverage for annual preventive exams, including pap smears, mammograms, and immunizations for children and adults. This coverage is usually provided without the individual having to pay anything – no copayments, not subject to deductible and coinsurance. Sometimes when the claim is sent to the insurance company from the doctor, the claim isn’t submitted correctly (as a preventive exam). In those instances, the individual has to pay a copayment or the cost of these claims.
If an appointment for a preventive exam is scheduled with a doctor and the insurance company does not pay for the exam like someone thinks it should be paid, then that person should call his or her insurance company and/or doctor and ask them why. This person should also check with his or her doctor before any blood work is completed to ensure the tests are all covered under the insurance plan.
Health Savings Accounts (HSAs)
If a business owner offers an HSA eligible plan to his or her employees, that person should consider going to a corporate bank and asking them to waive the fees for the employees on their Health Savings Accounts (an HSA eligible plan is also called a qualified High Deductible Health Plan). This is especially valuable if the employer is contributing to the HSA accounts and every employee is opening one.
The Explanation of Benefits (EOB)
Always check the doctor’s bill versus the Explanation of Benefits received from the insurance company. Make sure all of the charges line up and that the doctor actually performed all those services.
The cost of services in general can vary dramatically from doctor to doctor. Most insurance plans offer cost and quality information on their websites. Most consumers shop around and do research when purchasing a TV or a new car, but they don’t take that extra step when it comes to their health. Insurance companies are providing more of that information. Consumers need to get in the habit of taking advantage of the information that’s available to them.
On the prescription drug side, medical plans may require an individual to pay a portion of the prescription drug costs if that particular drug has a generic alternative. When a prescription is filled at the pharmacy, it may not just cost someone the copayment, but the extra penalty for not selecting the generic. In some instances, that penalty will not apply if the prescription is written as “dispense as written” (DAW) by the doctor.
The insurance plan may require an individual to try some lower cost alternatives before it will pay for a higher-cost drug. This is called “step therapy.” Or, the insurance plan may require an individual to get prior authorization (PA) before filing the prescription. A doctor or pharmacist should be able to help someone identify the drugs that fall into these scenarios.
If someone is on a very expensive drug or a drug that requires special administration or delivery (often called a specialty drug), the insurance plan may require that person to get the prescription filled through a particular pharmacy. If that person does not fill the prescription through the insurance company’s specialty pharmacy, he or she is often charged a penalty or the claim may be denied.
Employee communication is critical, and helping them understand how to save money by keeping an eye on their medical bills as well as how they use medical services could save an organization and their employees a lot of money.
To make sure your plan design offers the best value to you and your employees, have a UBA Partner benchmark your health plan against other employers your size and with those in your region and industry. Find out more about benchmarking here: http://bit.ly/17u3M5T.
Mary Drueke-Collins is Vice President Employee Benefits for Swartzbaugh-Farber, a United Benefit Advisors partner firm in Nebraska.