Reference pricing - coming to healthcare near you

[Sam1]

http://www.northjersey.com/opinion/opinion-editorials/reference-pricing-1.1018817

 

Looks like now our insurers (including the people who have been forced into ACA exchange plans) can limit how much they will pay for a procedure.  example:

 

Need a new hip implant like me and want it done at Vanderbilt or St Thomas and they charge $50,000 to do it, well my insurance can now say they limit hip replacements to $30,000 and I can either go to some brothel, or hospital in the backwoods of Kentucky and get it done with budget parts for $30k, or I can get it done somewhere good and I'm personally responsible for the amount over $30k, not counting towards the yearly catastrophic or copay amount.

 

When open season rolls around this year, you guys/gals better pay real close attention to this one.

[dats82]

I hope everyone enjoys this affordable care :/

[Ugly]

Talk about a chicken bone!

[Oh Shoot]

http://www.northjersey.com/opinion/opinion-editorials/reference-pricing-1.1018817

 

Looks like now our insurers (including the people who have been forced into ACA exchange plans) can limit how much they will pay for a procedure.  example:

 

Need a new hip implant like me and want it done at Vanderbilt or St Thomas and they charge $50,000 to do it, well my insurance can now say they limit hip replacements to $30,000 and I can either go to some brothel, or hospital in the backwoods of Kentucky and get it done with budget parts for $30k, or I can get it done somewhere good and I'm personally responsible for the amount over $30k, not counting towards the yearly catastrophic or copay amount.

 

When open season rolls around this year, you guys/gals better pay real close attention to this one.

 

That's how insurance has always worked. The insurance company pays x for x procedure and the health care facility either accepts a certain insurance and agrees to accept that fee or they do not. However, the "billing you for the excess" part is bunk AFAIK.

 

Matter of fact, for the last 10 years before I assumed official geezer status, the ONLY thing my insurance did for me was that I paid the insurance rate instead of the walk-in price (often close to half the price) since I never hit the 5K deductible to where insurance would pay for anything at all. So they had to charge me the insurance rate, as it's part of the contract when they accept a certain insurance.

 

You never notice the "write off" or "allowed charge" on a medical bill? That's the difference between what the provider would charge an uninsured person vs an insured one they accept.

 

Of course, you'll pay out of pocket for whatever deductible and/or a certain % more until you hit the yearly total out of pocket. Which is nothing new either.

 

In short, what's new here,  except that the insurance companies/Medicare are paying less as time goes on, and of course gummit intervention in making a more universal contract among insurers who agree to participate in ACA.

 

What's new are some of the author's claims, but I think he's simply quite uninformed on medical health insurance facts and don't believe some of his statements are accurate at all. If a health provider accepts your insurance for the needed procedures, it also accepts the fee structure that your insurance will pay for them,  and doesn't "bill you for the extra".

 

And sure, it could be that you won't be able to get your bypass done at Vandy, if Vandy doesn't accept your insurance. But if they do, they'll do it for the price agreed upon in the contract.

 

Now, if anything has changed regarding what I've said above, I'd like to see documentation, as sure, I could be wrong -- there's probably no way to overestimate the devastation that ObamaCare is gonna have, but I don't see this as part of it.

 

- OS

Edited May 20, 2014 by Oh Shoot

[Sam1]

That's how insurance has always worked. The insurance company pays x for x procedure and the health care facility either accepts a certain insurance and agrees to accept that fee or they do not. However, the "billing you for the excess" part is bunk AFAIK.

Matter of fact, for the last 10 years before I assumed official geezer status, the ONLY thing my insurance did for me was that I paid the insurance rate instead of the walk-in price (often close to half the price) since I never hit the 5K deductible to where insurance would pay for anything at all. So they had to charge me the insurance rate, as it's part of the contract when they accept a certain insurance.

You never notice the "write off" or "allowed charge" on a medical bill? That's the difference between what the provider would charge an uninsured person vs an insured one they accept.

Of course, you'll pay out of pocket for whatever deductible and/or a certain % more until you hit the yearly total out of pocket. Which is nothing new either.

In short, what's new here, except that the insurance companies/Medicare are paying less as time goes on, and of course gummit intervention in making a more universal contract among insurers who agree to participate in ACA.

What's new are some of the author's claims, but I think he's simply quite uninformed on medical health insurance facts and don't believe some of his statements are accurate at all. If a health provider accepts your insurance for the needed procedures, it also accepts the fee structure that your insurance will pay for them, and doesn't "bill you for the extra".

And sure, it could be that you won't be able to get your bypass done at Vandy, if Vandy doesn't accept your insurance. But if they do, they'll do it for the price agreed upon in the contract.

Now, if anything has changed regarding what I've said above, I'd like to see documentation, as sure, I could be wrong -- there's probably no way to overestimate the devastation that ObamaCare is gonna have, but I don't see this as part of it.

- OS

The way insurance works is through negotiated or contract pricing. Currently if an in network provider and the insurance company have a negotiated or allowed price of $100 for procedure abc123, then the doctor can only charge the patient $100 for procedure abc123.

This effectively puts everyone into a market the way that out of network providers and the insurance company works, so that when you run over that allowed cost, you are personally responsible.

So it is actually nothing like what the in-network system operates like. The reference pricing allowance differences will also not count towards your deductibles or your catastrophic limits, just as any personally incurred out of network differences currently do not either.

To specify on the plan allowance charges and actuals, that is between the hospital and insurer, they negotiate the fees and for that negotiation, they in return get more business from members of that insurance group... But the thing about that is they have an opportunity to negotiate, reference pricing allows the insurance company to override that negotiation and the loss will now be passed to us as consumers instead of it being negated via the set pricing of an in network provider agreement.

If you think this will have little to no impact on our out of pocket health care expenses, you'll be in for a big surprise if you end up at the ER like me and need $190,000 worth of medical care the first 24 hours and the reference price on your insurance for those procedures ends up being $95,000 total. Even though the hospital is in network Edited May 20, 2014 by Sam1

[Oh Shoot]

Okay, even though it won't affect me being on Medicare Advantage (which will have its own separate problems as time goes on), I read up on it a bit more. And yes, you and the article you quoted are at least partially right, in that there is a chance of a significant change with the "reference pricing" thing.

 

Seems this article from New Republic puts it most cogently, at least for me.

 

http://www.newrepublic.com/article/117812/reference-pricing-obamacare-consumer-protection-weakened

 

First, though, seems no ACA administered policy can be affected by it, the yearly out of pocket max will still apply, period. But yeah, looks like at least with elective surgery, the consumer with certain policies could have to do a bit more research before choosing the provider.

 

I see that there is a comment period through Aug 1, so we'll just have to see how it shakes out.

 

I would imagine that there will have to be some sort of mandatory notification built in to the process if it becomes official policy though -- meaning if it shakes out that indeed a provider which accepts your insurance can then charge you more than the insurance pays, you'd know beforehand, so if Vandy indeed would charge you over and beyond your insurance, you'd know that going in. It isn't gonna help these health providers' bottom line for the extra effort to bill for services that they'd seldom collect on, after all, which would be the case with the majority of the rank and file who were surprised with the charge.

 

I'd also posit that for fairly obvious reasons, emergency services won't be allowed to be run under the same guidelines, whatever those turn out to be exactly.

 

- OS

Edited May 20, 2014 by Oh Shoot

[bersaguy]

Medicare has only been paying 80 % of bills for as many years as I can remember for medical in hospital procedures and that was the reason most folks carried a supplement plan to cover the difference Medicare did not pay on the bill. I use to see ads all the time about Supplement Plans but I have not been seeing them since the ACA plan took effect. Could that be because every ones deductibles have been placed on the "Thoughtless, Heartless and Ignorant" level for ACA members? Back years ago when my mother was still alive she purchased one of these supplement policies for $87.50 a month. Now mind you her health was good and she didn't have any claims but by the middle of the second year of the policy she was paying $359.00 a month for the same coverage. I told her to talk with her doctor about this because I knew she would never believe me and she wouldn't do it so when I took her to the doctor for her B12 shot that month I asked him to explain to her what these companies basically were and he did. He also told her that because of his agreement with Medicare all he was allowed to charge her was what they paid for her visits. His normal office visits at the time was 90.00 for basic visit for things like colds and such and her B-12 shot each month. Medicare only paid him $66.00 for her visit and even though his fees were 90.00 he was not allowed to bill my mother for the difference. He had to agree to accept what Medicare paid him or he would not be able to see any Medicare patients. It works the same way with my Doctor. Her office visits are $105.00 but Medicare only pays her $71.00 yet she never sends me a bill for the difference. She is not allowed to. It works the same for Hospitals. When I had my stroke St Thomas was where I was treated and my Neurosurgeon and all my other doctors assigned to my case where Medicare doctors and I never got a bill from any of them for 1 dime over what Medicare covered. Same when I had my heart attack and was in same Hospital. My mother dropped her supplement policy and saved that $379.00 a month and never got a bill for anything from anyone. Now with that said, I am sure that before he is done the President of the United States will surely screw all that up before he is done by taking all the money out of Medicare to pay for this ABOMINATION  which will be his legacy, the ACA and the destruction of our great nation!!!!...................jmho

[Oh Shoot]

Medicare has only been paying 80 % of bills for as many years as I can remember for medical in hospital procedures ...

 

No, not accurate at all.

 

Original Medicare Part A covers all in hospital expenses for the first 60 days of any stay (except private room, phone/TV if billed extra, etc), but with patient owed $1216 deductible per benefit period. After 60 days, Double Jeopardy starts, where the scores can really change.

 

Also, you can get much better Medicare coverage through a free Advantage plan too, without paying for a supplemental one, if it suits your health needs.

 

You should research a bit before these sweeping claims you're prone to make. Most of Congress is not made up of lawyers and doctors either:

 

http://www.tngunowners.com/forums/topic/78726-doctors-against-guns/#entry1149559

 

- OS

Edited May 21, 2014 by Oh Shoot

[Ugly]

and so it begins, they might only pay a small portion with the ocare  that is, if they decide to cover you

 

http://www.reviewjournal.com/news/las-vegas/woman-class-action-lawsuit-against-xerox-dies

[Hershmeister]

The issues with reference pricing is probably best understood as compared with dental insurance. Anyone with dental knows that the 50% coverage never pays 50%, since its only 50% of the "allowable" expense - or "reference price" This tactic allows an insurer to avoid a direct negotiation with each provider, and rather puts the insured on the hook for the balance due, while maintaining the illusion of coverage unless the insured asks about the cost of services prior to receiving them, which rarely happens. The other reason reference pricing will continue to take off is that insurers do not want to show that only a few providers are truly "in network" and have accepted their rates. Therefore with reference pricing they can list a wide "network" Its all about the cost shift to patients

[E4 No More]

It's not exactly "negotiated" in that a healthcare provider agrees to the insurance's level of payment when they agree to become an "In network" provider. Out of network providers take what the insurance pays and then you pay the rest.

[Oh Shoot]

It's not exactly "negotiated" in that a healthcare provider agrees to the insurance's level of payment when they agree to become an "In network" provider. Out of network providers take what the insurance pays and then you pay the rest.

 

Yep, I still don't see any real diff to the consumer than the plans out there now.

 

Though I'm all for fewer regs than more in general, it perhaps needs to be mandatory that a provider inform the patient upfront before any services rendered that they are not in the insured's network though.

 

I recently paid $60 unnecessarily for a extended eye exam since the guy wasn't in network, but didn't understand that was the reason at the time. Might have still done it since I really like the feller and all, and yeah, it's my responsibility ultimately, but seems it might be fair to have an informed knowledge of that sort of thing going in, as it could have been something meaning big bucks.

 

- OS

[E4 No More]

Yep, I still don't see any real diff to the consumer than the plans out there now.

 

Though I'm all for fewer regs than more in general, it perhaps needs to be mandatory that a provider inform the patient upfront before any services rendered that they are not in the insured's network though.

 

I recently paid $60 unnecessarily for a extended eye exam since the guy wasn't in network, but didn't understand that was the reason at the time. Might have still done it since I really like the feller and all, and yeah, it's my responsibility ultimately, but seems it might be fair to have an informed knowledge of that sort of thing going in, as it could have been something meaning big bucks.

 

- OS

Back in the day I would have informed had I known, and my staff was instructed to inform. Doctors tend to not concern themselves with the insurance.

 

As far as regulations are concerned you'll find no friend of insurance companies in me. Free market here is complete BS. As an example, (and remember, there's no negotiation involved), I had patients who worked in claims departments for insurance companies. Cigna, (to name one), would hand out a stack of claims each morning, and if you didn't get through them by the end of your shift they just canned them and deny receipt if the doctor's office called to ask where their money was. Sometimes they'd do it repeatedly until their deadline passes, (usually 90 days from date of service), and then they'd deny your claim as untimely.

[Sam1]

Yep, I still don't see any real diff to the consumer than the plans out there now.

 

- OS

 

Have to look at it in a more specific manner and not just from the macro perspective.  Hersh described it best, but again to add on to what he is saying, even an in-network provider can charge more than the negotiated rate now.

 

Right now BCBS will pay all but I think it is $150 copay on my hip surgery - without regard to how much the hospital wants to charge, or how much the negotiated price is.  Say just for the sake of this discussion, Vandy wants to charge $85,000 for parts & labor on the deal.  The negotiated cost for being an in-network provider with BCBS says it is $40,000.  I pay my $150, Vandy adjusts the rest.

 

Now with reference pricing that same situation can go to $150 on my copay, $85,000 from Vandy and parts & labor reference priced now at $35,000 (because other surgery centers can do it for this amount) and the negotiated limit is still $40,000.  I am now in the hole for $5,150 (the difference between the reference price and negotiated rate + copay) if I want Vandy to do it even though they are an in-network provider.  And that extra $5,000 does not count towards any annual deductibles. 

 

However, if I am willing to go to "Budget Surgeries 'R Us" and they only charge $35,000, then I am only on the hook for $150.

 

It nearly decimates the purpose of having an in and out of network cost schedule, and places everyone in the out of network provider structure.

Edited July 2, 2014 by Sam1