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Call To Overhaul the U.S. Medical Billing System

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Call To Overhaul the U.S. Medical Billing System

Call To Overhaul the U.S. Medical Billing System
February 07
16:28 2020

For a country that does so many things so well, the current state of undisclosed U.S. healthcare fees is as shocking as it is appalling. People are going broke because they had no idea how much their treatments were going to cost, with or without insurance coverage.

An estimated 1 out of every 6 Americans have reeled after getting an exorbitant medical bill:

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“For example, the Texas high school teacher charged $108 thousand for his heart attack. Or the former cocktail waitress in Washington charged $227 thousand for her heart attack.”

Then, there was Elizabeth Moreno who was “overcharged to the tune of $17,850 for a drug test that, without her full knowledge of the tests being performed, were sent to an out-of-network lab that charged an outrageous amount, which some experts have said is far above usual market prices.”

But wait, there’s more: a patient in crowded Manhattan, New York, was told that a post-operative medication (an ointment to help heal a small surgical scar) was not covered by insurance but was eligible for a discount. After applying a coupon, the cost would be $30 at a pharmacy 30 blocks away – well worth the drive since the same salve would cost $1,000 at the patient’s regular local pharmacy. This person wondered:

“Why…would a coupon reduce a price by 97% – but only if I trek to a distant pharmacy I’ve never heard of? And where can I get such coupons for the other things I buy in life?”

Astronomical medical charges are triggered quite often when a patient visits an in-network facility authorized by the insurance policy but is treated by an out-of-network  doctor, often a specialist such as an anesthesiologist.

The financial side of the U.S. healthcare system is so complex – and so hidden – that the average person has no idea how a patient’s care is tallied. The problem is so bad that lawmakers are working hard to remedy the blighted medical billing landscape.

Arizona, Colorado, Maine, Minnesota, New Mexico, Oregon, and Texas have passed State laws to protect their consumers from greedy healthcare providers.

In just about every other consumer market, customers expect to be informed in advance of fees for “parts and labor” to make an informed decision before signing a legal agreement to pay. This lets them shop around for a better deal, negotiate the price or patronize some other outfit for the desired product or service.

On May 9, 2019, President Donald Trump announced from a White House event how he would solve the consumer nightmare of surprise medical bills:

  1. Patients receiving emergency care would not be forced to bear extra costs billed by a non-network care provider that is not covered by their insurer
  2. Patients receiving scheduled care would have clear information about whether providers are in or out of their network and what costs to expect
  3. No patient would have to pay surprise bills from out-of-network providers the patient did not choose
  4. Federal healthcare expenditures will not increase

Legislators in the U.S. House and Senate are weighing bills that would cap (set a maximum) out-of-network charges at the rates charged by insurance companies in that area.

Hospitals and physician groups are lobbying against a change that translates into less treatment money for them. An organization called Doctor Patient Unity has been shotgun-blasting TV ads and direct-marketing mailers to oppose these congressional initiatives to prevent devastating medical billing surprises.

On June 26, 2019, a bill was introduced in Congress called the “Protecting People From Surprise Medical Bills Act.” H.R. 3502 would amend the Public Health Service Act and title XI of the Social Security Act to protect health care consumers from surprise billing practices.

Under H.R. 3502, arbitration would be used to settle disagreements over surprise medical bills. Doctors oppose this conflict resolution technique with this reasoning:

“The bill stipulates that to resolve such disputes, an arbiter will typically pay out-of-network providers significantly more than the in-network rate. The average award — near the 80th percentile of physician billings — will ensure that it is almost always more profitable for a physician to be out of network than in it.

“By ending the financial distress and anger that patients can experience when hit with surprise medical bills, and by guaranteeing insurance payments far above in-network rates, arbitration will prompt many doctors to leave insurance networks as soon as they can. It would, in fact, be folly to remain as an in-network physician in most instances.”

This analysis concludes that consumers will suffer because no longer will insurance companies get to capitalize on their negotiated bargain rates for their massive groups of policy-holders:

“Insurers can get better prices and quality covenants from providers than would be available to any individual patient negotiating for herself.”

And that, right there, is the heart of the problem. Insurance companies get to set their customer’s premium rates as high or low as they wish on the promise (and the fact) of a group discount.

Overhauling the U.S. healthcare insurance industry would be a giant step forward in overhauling the opaque, unfair, monopolistic power held between insurers and healthcare providers.

As one of my friends explained:

“The purpose of health insurance is to make sure the doctors get paid.”

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