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Ending Bad Medical Billing Practices Requires a Tsunami of Patients to Speak Up and ACT!

Ending Bad Medical Billing Practices Requires a Tsunami of Patients to Speak Up and ACT!Talk to any stranger about the cumbersome medical bills that we encounter, and you will surely find something in common with that person – regardless of political party, religion, gender, ethnicity or place of residence. The fact is, whether or not you have health insurance, few of us are happy with the hefty medical bills we are prompted to pay.

Recently, a book was published that addresses how patients should carefully scrutinize their medical bills before paying them. The book, “Never Pay The First Bill and Other Ways to Fight the Health Care System and Win,” was written by ProPublica investigative journalist, Marshall Allen. Many of Allen’s resources and strategies to demand fair prices make intuitive sense…but it requires patience and persistence from each of us.

Price gouging continues to be a huge reason why the U.S. spends more money on healthcare than any other wealthy country. Seeking care requires one to navigate a complex system that too often provides unnecessary treatment, elicits erroneous medical bills that require higher cost-sharing with patients, and necessitates complicated communications with insurance companies, hospitals and other care professionals. 

Medical Debt

About one in six Americans have medical debt in collections. Sadly, this number appears to be increasing. A good reason – other than being uninsured – is that a rising number of Americans are enrolled in high-deductible health plans (HDHPs). HDHPs are commonly used with health savings accounts (HSAs), which are tax-free spending accounts that help people pay for their out-of-pocket costs. However, the HSAs are typically funded by the employee, reducing their disposable income for other essential items, such as food and housing.

According to a 2018 Survey of Income and Program Participation (SIPP), 19 percent of U.S. households carried medical debt – costs that people are unable to pay up front or when they receive care. The median amount owed by households was $2,000.

A CNBC report from 2019 indicated that two-thirds of people (66.5 percent) who file for bankruptcy cite medical issues as the reason. In fact, an estimated 530,000 families turn to bankruptcy each year because of medical issues and bills.

Below is a medical debt breakdown by SIPP based on race, education level, family composition, region and poverty status.

How Common are Errors in Medical Bills?

Most people who take time to review their medical bills say they contain errors. Whether we are charged for services or procedures that were not performed, or upcoding, which is assigning an inaccurate billing code to a medical procedure or treatment which will increase the cost to the payer(s). Plain and simple, upcoding is nothing short of fraud. Much too often, patients unknowingly pay for these ‘mistakes.’

According to a July 6 Wall Street Journal article, after “studying thousands of prices at hundreds of hospitals,” many hospitals charge top prices to uninsured patients who must pay cash out of pocket. The difference of payment required between those insured and those uninsured are substantial. Even those who have insurance may find their policy will not cover a particular procedure, leaving the individual to assume the entire billed amount on their own. This finding is not terribly earth shattering, as it has been street knowledge for years that insurers are able to drastically reduce billed charges down to a more ‘reasonable’ amount. But what insurance companies have ‘negotiated’ to pay hospitals is still multiples higher than what Medicare pays these very same hospitals for the same procedures.

Based on research, medical billing errors are so frequent that four out of five bills contain at least minor errors. Insurance companies may find some of these errors, but ultimately, most medical claims are auto-adjudicated, which means most errors fall through the cracks at the insurance company, leaving patients with unfair bills to pay. Marshall Allen asks both a fair and fundamental question: Who are the REAL customers of the insurance company – the hospitals and physicians, or those who actually pay for the insurance coverage?

What You Can Do to Combat Medical Bills

Allen does a wonderful job of describing what you can do when confronted with medical bills that appear to be unreasonable (most are, by the way). Primarily, Allen recommends that people always request an itemized medical bill from the hospital and other medical providers. This bill should include a list of all the charges that add up to the total, in addition to including the billing codes – also known as Current Procedural Terminology (CPT) – that the provider used when they filed the insurance claim on your behalf. With these itemized billing codes, you can perform your own research on what is considered to be ‘fair’ prices. Yes, this process can be intimidating, even for those of us who are tangentially involved in the healthcare industry.

Itemized bills, by the way, are not terribly common in the U.S., primarily because patients assume and expect their insurance company to process the bills to ensure accuracy and appropriateness. This is a big assumption that may not happen. If more Americans would request an itemized bill from hospitals and other providers, it would force billing departments to make this a standard procedure. If not, people can insist on legislation in their states or nationally to ensure that every hospital bill is itemized. By doing this, more transparency will force the billing practice to become more accountable to payers and patients.

Through his research, Allen has found that hospital bills can be negotiated down to a more reasonable amount, whether through collection agencies who are hired by hospitals, or by ‘debt buyers’ who purchase the hospital debt at pennies on the dollar.  Debt buyers will subsequently discount the list price greatly in order to profit from what they paid the hospital. According to one source quoted by Allen, people can get about an 85 percent discount off the list price of the debt. This is quite substantial.

Closing Remarks

Because Americans pay far more per capita for our healthcare, this book is a must read. Without giving away Allen’s ‘secret sauce’ within this blog, this book should be purchased and read cover to cover. Marshall Allen was also a guest on Reconstructing Healthcare, where he describes his book (audio below). Information gleaned from resources like these will make it easier for patients, employees and employers to more confidently push back on our perverse health system, and actually win!  

 

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Role of Government in Healthcare – Has a ‘Tipping Point’ Been Reached?

Has a ‘Tipping Point’ Been Reached on the Role of Government in Healthcare?With great interest, I read a newly-released report by the Kaiser Family Foundation (KFF) and the Purchaser Business Group on Health (PBGH) on how corporate executives view the role of government when controlling health costs. Let me just say, the findings are not a flattering compliment to the status quo.

As we have found in Iowa and all over the country, healthcare costs continue to climb, year after year. In the past, employers have relied on private insurers and the quasi ‘market system’ to stem the tide of unaffordable healthcare costs, eschewing government regulations that would likely control how much providers are paid. As we know through Medicare and Medicaid, the government is able to reimburse providers considerably less than private payers.

This new survey of over 300 large private employers with at least 5,000 employees was important for yet another reason. The surveyed respondents were corporate leaders in key positions, such as CEOs, CFOs, COOs – individuals who have powerful decision-making roles within their organizations. They are prone to influence the trajectory of their organizations in the future. Equally impressive is the nice mix of industries represented: Agriculture, Construction, Financial Services, Manufacturing, Mining, Retail Trade, Services, Telecommunication, and Transportation & Distribution.

Key Findings

The overall takeaway is that a large share of corporate leaders are likely to SUPPORT government efforts to control health spending. Only a small share of respondents would oppose government regulations. 

As in the past, corporate leaders indicated they will continue to implement value-based payments, shift more costs to employees through plan designs and payroll-deductions – and find other ways to control their health costs – including direct-contracting relationships with health providers. But many leaders acknowledge that these measures have only been marginally successful, and despite conventional wisdom, large employers have little market clout to control their own costs.

This survey, therefore, sheds light on a new awakening that large employers may now have:

  • Bigger Role By Government – 87 percent of surveyed corporate officers believe the cost of health benefits will become unsustainable over the next 5 to 10 years. In fact, 85 percent indicate that the government needs to take on a bigger role in controlling costs and providing coverage.
  • Government Action on Hospital Prices – 78 percent of leaders expressed some level of support for government action on hospital prices, particularly in areas that have limited hospital competition. Of huge importance, less than five percent opposed these regulations.
  • Limiting Drug Prices – Surveyed leaders are equally supportive of having government limits on drug prices.
  • Public Insurance Option – About two-thirds (65 percent) of corporate leaders indicated having some level of support for a public insurance option for their employees. Additionally, a large majority support lowering the age for Medicare eligibility.

According to the surveyed executives, some advantages to having a greater governmental role in coverage and costs are:

  1. Employers are relieved of the responsibility and the costs of managing health benefits (61 percent).
  2. May enable the government to hold down costs (61 percent).
  3. May be able to increase consumer choices by offering public plans (e.g., public option or Medicare buy-in) to compete with private plans (47 percent).
  4. Might reduce administrative costs (29 percent).

Disadvantages include:

  1. Government doesn’t have a great track record of running big programs like this effectively (43 percent).
  2. Since the health care industry contributes so much money to political campaigns, lawmakers are never going to take steps to reduce costs (41 percent).
  3. Employers might not have the ability to tailor health benefits to their employee needs (30 percent).

Employers are in the Healthcare Business

Warren Buffett once said that “General Motors is a health and benefits company with an auto company attached.” In fact, GM spends more on healthcare than steel to make cars. Starbucks, as another example, spends more on healthcare than coffee beans. For most employers, after payroll, healthcare is the second largest expense. Whether employers like it or not, this puts employers smack in the center of the healthcare business.

It remains to be seen whether corporate leaders will put lobbying and advocacy energy into healthcare legislation that pushes for more government regulations on healthcare pricing. But if this latest survey is an indication of a new tipping point on the horizon, this could be a catalyst for real change. Of course, health providers and insurers will lobby hard to keep this from happening.

Executives of large organizations have historically been vocal on healthcare costs, but primarily resistant to increased government regulation. If employers no longer wish to be in the healthcare business, or at least, not quite like they have been in the past and present, their formidable voice for larger government involvement may become too loud for Congress to ignore.

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New Study on Exercise Guidelines

New Study about Exercise GuidelinesDespite religiously biking and working on both the elliptical and rowing machines, I recently learned that my blood pressure is somewhat elevated. I can only assume that this may be caused by my high-salt dietary habits. Having garnered my attention, it’s time to make necessary changes.

The motivation for change was also heightened by a new report on how high blood pressure can possibly be reduced without relying on medications.

A new study published in the American Journal of Preventative Medicine suggests that exercise guidelines from the U.S. Department of Health and Human Services (HHS) might require an update. Here are the new findings:

  1. Weekly Exercise of at Least Five Hours (300 minutes) – The current HHS guidelines suggest that adults should aspire to perform at least 150 to 300 minutes weekly of moderate-intensity exercise. Brisk walking, swimming, and mowing the lawn are three good examples. However, the new study concludes that moderate exercise should be around five hours per week. In other words, if you exercise at 150 minutes per week, you are only half-way to the new recommended level. As mentioned in the study, “Moderate physical activity levels may need to exceed current minimum guidelines to prevent hypertension onset using the 2017 American College of Cardiology/American Heart Association definitions.”
  2. How Five Hours Per Week was Determined – Researchers analyzed a mid-1980’s project that extended for 30 years. Of the 5,000 teens followed, only those who completed more than 300 minutes of exercise every week avoided hypertension. Hypertension occurs in nearly half of all American adults and is defined as blood pressure at or above 130/80mm Hg. High blood pressure levels can cause risk for cardiovascular disease and events, which can be fatal. In 2018, nearly half a million deaths in the U.S. included hypertension as a primary or contributing cause.
  3. Racial Disparities – The new study indicates that Black respondents exercise far less than White respondents. The result? Black individuals suffered more acutely from the effects of hypertension than White respondents. This finding, it should be noted, is not earth shattering. According to the Centers for Disease Control and Prevention (CDC) in 2020, racial disparities in hypertension prevalence is greater in non-Hispanic Black adults (54 percent) than in non-Hispanic White adults (46 percent), non-Hispanic Asian adults (39 percent), or Hispanic adults (36 percent). Hypertension rates also vary greatly by state.

Summary

It is widely known that high blood pressure can be treated by a combination of medication and lifestyle changes. For employers, worksite programs related to physical activities, nutrition, alcohol use, stress, type 2 diabetes and obesity can aid employees in prevention and reducing high blood pressure.

Of course, modifying behaviors is the ultimate challenge to employers, their employees and family members. It begins and ends with finding the ‘right’ motivations to alter lifestyle choices.

As for me, exercising is no problem, and I feel confident that my blood pressure can be reduced by making a few dietary changes that I should have been making earlier. With that said, I really will miss those salted pistachios!

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