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Wednesday, December 2, 2009

How Much Will My Visit or Surgery Cost? Part II on Medical Pricing

Most patients (consumers of health care) are frustrated by the fact that they can't get anyone to answer the question "How much it will cost?" (See )when they are considering elective surgery (i.e. a tonsillectomy) or even a visit to a specialist. I say most and not all because the fact is that the majority of patients up to this point have only cared about the portion of the monthly premium that comes out of their paycheck to pay for their health insurance coverage. And most people don't even know, or care, what their employer pays for their insurance. This disconnect from what is actually being paid TO the PROVIDERS of our health care is one of the major reasons insurance companies and government have been able to dominate and distract the public about the issue of cost and price for health care services. The following is applicable whether you have insurance or not. If you do not have insurance, make sure you read the previous blog titled "The Nitty Gritty...." as you will be able to determine what your discounted amount will be using the following. So here is Part II on how all this works.....

1. Billing and payment for any medical service you receive occurs AFTER the service is completed. Your visit is coded by the doctor and billed AFTER you see the doctor or have the procedure because..

a. Medical decision making is dependant on the the findings of the physician during the visit as well as during surgery. This may be different from what was initially assumed or planned. Human beings are not made of sheet metal, and therefore the science and art of medicine is not always predictable. For this reason, billing for what is done medically has always occurred after the service has been performed, when documentation for medical decision making can be reviewed by the government/health insurance company in order to support payment to the doctor/hospital.

b.This is how the health insurance industry (both private and government directed, such as Medicare or the VA system) has structured how doctors and hospitals are paid.

2. A doctor's office, as well as the hospital, has one fee schedule.Their fee schedule will not be the price that you as an insured patient will be charged. (see "Nitty Gritty Facts About Doctor's Prices").

Question: Why can't I just call my insurance company and find out how much it costs to see the specialist or have a tonsillectomy?

Answer: Insurance companies will only give pricing information to the doctors office doing the procedure because of the differences of payment for the same service to different doctors under their plan. Insurance companies keep their payment schedules to doctors confidential for this reason. This is, as the MSNBC article suggested, the root of the "secrecy" that underpins the pricing of medicine. If you tried to call your insurance company to get the pricing of your procedure, they would not give be able to give you that information. (See "Nitty Gritty" post to explain why there is not ONE pricing formula applied to medical services.)

Here is a step by step process to get a range of pricing for your medical service BEFORE it is done. Remember, every surgical procedure will have three components to it's cost: the surgeon's fee, the anesthesiologists fee, and the facility fee (hospital or out patient surgery center). The following steps can be applied to any surgery:

1. If you have insurance, call customer service and ask these questions:
What is the remainder of my deductible that needs to be paid? What are my surgical benefits? If you don't know how your deductible 'works', now is the time to ask.

2. You will then have three calls to make: the doctors office, the anesthesolgists office, and the Business Office of the Hospital.

3. What you should know before you call: Your doctors office and the hospital will be verifying the benefits per your insurance plan before the surgery to get a prior authorization if required. This is not a guarantee of payment, since payment is dependant upon:

* whether the insurance company deems it medically necessary,
* the documentation supports what was done,
*or whether they consider the procedure experiemental or not.

None of this is verified ahead of time except for certain triggers that have to be met to approve the surgery.

Remember, each of the providers - doctor, anesthesiologist, and facility - will be paid separately. In other words, you will be responsible for each provider's bill individually. You and/or the insurance company will issue separate checks to each.

4. Call the doctor's surgical scheduling nurse and ask: "I am scheduled to have a _____. What is the CPT code? Who will be doing my anesthesia? Do you have the number to their business office?

The CPT code is needed to determine what payment is associated with the service performed. Remember, an exact amount is not possible until after the service is completed. What you are looking for is a reasonable range of cost.

Once you have the CPT code, ask to speak to the doctor's billing department. "I am having a scheduled to have a tonsillectomy. The CPT code is ________, can you tell me how much you expect my insurance company to pay for this procedure?" If they can't (or won't), then ask for the amount Medicare reimburses for the procedure, and don't take no for an answer.

Once you have the Medicare allowable, multiply that amount by 1.20 (120%) This will give you an approximate amount that the doctor will be paid (and you will be responsible for) give or take 10 - 20%. (For example, if Medicare pays $250 to the doctor for a tonsillectomy, you can expect your insurance company to pay between 110 and 140% of this rate to the doctor. By calculating the amount using the 120% firgure, the doctor would be paid $300 ($250 X 1.20).

5. Next, call the business office of the anesthesiolgist group. "Your group is administering anesthesiology for my surgery on (the date). The CPT code is _______. Can you tell me how much you expect my insurance company to pay for this procedure?" Again, if that fails, ask for the Medicare amount and calculate it yourself (multiplying the amount by 1.2)

6. Next, call the business office of the hospital. Ask what the anticipated payment from your insurance plan would be for the procedure (CPT code) you are having. Follow the same as above. (This will be the biggest challenge in the process!)

7. Add all three of these together and you will have the total cost of your surgery. Depending on whether you have met your deductible,( the amount required by your plan that you pay before any of your benefits kick in) will determine how much of the portion you will owe out-of-pocket. (For example, if you have a $5,000 deductible, and so far have only had $150 in medical expenses, you still have $4,850 to meet your deductible and will have to pay for services directly to the providers. If your tonsillectomy costs a total of $2,500, you will have to budget to pay all of it out of pocket with none of your insurance plan benefits kicking in.) Knowing what your deductible is and how much is left to be met is crucial. That and how much you can reasonably expect the cost to be ahead of time is absolutely requisite and a first step (albeit a baby step!) towards health care reform for the consumer in it's most practical form.

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