Archive for April, 2010

PostHeaderIcon Health Care Reform

The Patient Protection and Affordable Care Act was signed into law last week by the President. According to estimates it will afford coverage for an additional 31 million legal US residents; an estimated 24 million remains uninsured.

The most significant changes to the current health care system are:

  1. Elimination of pre-existing conditions limitations.
  2. Elimination of calendar-year and lifetime maximums.
  3. Establishment of community rating with variation for age and geography.
  4. Permitting young adults to remain on their parent insurance plan until age 26

The Congressional Budget Office (COB) estimates that the coverage provisions in the bill will cost 848 billion over ten years. Most of the major provisions will not take effect until January 1, 2014. Therefore, the current COB estimate uses 10 years of revenue to cover 6 years of coverage. In contrast, Republican staff on the Senate Budget Committee estimates that the total spending in the bill for 10 years will exceed 2.5 trillion.

The bill creates an estimated 150 new government entities to the teeming bureaucracy and countless new additions to the already overly complex tax codes.

More regulations will force everyone involved to spend more money on administration, driving the ultimate cost of health care even higher.

Large business entities and insurance companies will pay higher taxes, and those not providing insurance will be penalized. Small businesses, with less than 25 employees, will receive subsidies.

Extended coverage will be achieved by extending Medicaid for lower income individuals and families, providing tax credits for people above the Medicaid income threshold and by interstate insurance exchanges for the presently uninsured.

The law is promising protection from exorbitant out of pocket costs in the form of yearly caps on co-payments and co-insurance charges. However, it does not address the small print, such as usual and customary rates and non-covered (medically needed, but excluded from policy coverage) charges. It appear that the burden is entirely left on the insurance companies, but in reality the public will remain unprotected from overcharges and non-covered expenses. We are still at the mercy of deals made by insurance companies and large hospitals.

Physicians, the backbone of health care, are still affected in several ways. They are still forced to take contract of adhesions, limiting their ability to negotiate fees with insurance companies. They are still waiting for the permanent fix to the faulty Medicare formula, that was removed from the bill and replaced with a temporary fix. Tort reform, a major player in health care cost, hasn’t been addressed.

This legislation missed the mark of real reform. It only added several layers to an already fragmented system. It missed the opportunity to address real cost control, both by insurers and medical providers.

Regulatory authority between the federal and state governments is still divided and will be clarified via regulations in the coming years.

Regardless of what we think about this bill, it has been passed. Now it is time to move forward and make it work, hopefully, for all Americans.

PostHeaderIcon Pre-authorization denied for routine medical service

It is truly amazing what patients have to go through to receive covered medical services.

One large insurance company managed to cross all lines yesterday.

A client called to ask me to look into a pre-authorization denial for medical services that has been ordered by her doctor a few days before. She told me that in the morning of her test the physician’s office called to let her know that her test was denied; therefore she doesn’t need to keep her appointment.

The medical procedure in question is common for people over 40 years old; therefore I was surprised about the denial. Naturally, I called the doctor’s office to find the reason for the rejection.  I was told that they don’t know. Seemed odd, so I took the next step and called her insurance company. As you would expect I wanted to know the reason for the denial, so we can have it corrected, and get this test approved. At first the customer service person didn’t know, so she asked me to wait on the line. It took her some time to get back on the call, and to tell me that no one knows why the test was denied. Their third party administrator (a company who is hired by the medical insurance company to manage certain tests) made this decision without giving any reason.  She suggested that I appeal the decision. Although I have no reservations on writing appeals, as I had done several hundred ever the years, I always have solid reasoning.  Sending an appeal based on nothing seems foolish, so I asked “what should I base this appeal on?”  She had no answer.

This type of insurance behavior is not only unfair to patients, but it is unlawful. State insurance law requires insurance companies to explain, in plain language, why is a service being denied. They are also required to provide information about the appeals process.

In a few days this test will be pre-approved and paid by the insurance company in question, whether they like it or not!