Hidden Providers Part I The Invisible Kick In the Wallet

Reading two compatriots recently, Insurance Blog and Health Insurance 411, I took an interest in their commentary about "hidden providers".

What is a "hidden provider", Bob Vinyard from Health insurance 411 actually explains it well in his guest post at the Insurance Blog has a decent description:

Hidden providers are the care givers that don’t belong to any networks, are free to charge whatever they want for their services, and don’t have to accept what your carrier offers as payment in full. A few examples of hidden providers include:

Emergency transport (ambulance)
Lab & pathology
Anesthesia
Therapists
Radiation & chemotherapy
Private duty nursing

This list is not all inclusive, but it does hit the most common ones.

That pretty much sums it up. You might also include providers of home medical equipment (ie, wheelchairs, crutches, oxygen, etc), other specialists and just about any doctor or other healthcare provider that does not participate in your insurance plan.

Let me tell you about the most common mistakes a patient can make when discussing their benefits verses the service they are seeking:

1) Calling your insurance provider customer service and asking if a procedure is covered and accepting a simple "it's covered" as the answer.

2) Assuming that the procedure or service is a one line item bill, that includes every aspect of the service.

It isn't actually a "mistake" to call and find out if a service/procedure is covered. Particularly, if you are having a "scheduled" procedure (like repairing a torn anterior cuff ligament also known as "knee surgery"; repairing a rotator cuff also known as "shoulder" surgery; etc). If you have time before the surgery (ie, it is not an emergency situation), you are best served by making some phone calls of your own and not relying on the admissions representative to tell you whether something is "covered" or not. This can be intimidating as most lay people have little idea what they are asking about, the proper terminology, etc. But, this may be the difference between a $500 deductible bill and $3000 in hidden expenses (if not more).

If it was me and I had the time, I'd choose the call over the empty wallet.

The problem with simple terminology like "it's covered" is that it does not really give you enough information. Is the procedure covered under the major medical portion of your policy? If yes, what is the copay and specific deductible, if any, for this procedure? How much is the patient going to owe?

In the "terminology" section of this blog and at the Insurance Blog, we both noted that every service falls under a category and every service may have a different payment/copay/deductible situation. Further, every procedure is not guaranteed to be covered, even if you have "major medical" or some other policy. That procedure may be excluded on one grounds or the other, often because the insurance providers review board has determined for them in their policies that the procedure has no therapuetic benefit or medical necessity.

Even if the procedure is covered, there may be very stringent guidelines in order for the procedure to be considered a medically necessary. For instance, Blue Cross has regulations that limit what procedures qualify a patient for a Continuous Passive Motion (CPM) device. A CPM is a mechanical device that is often used for patients that have a "knee" or "shoulder" injury and subsequent surgery. Blue Cross of California will only pay for this device if it is used in conjunction with a "knee" surgery. They will not pay for this device if it is used for a "shoulder" surgery.

Why? Because, according to their review board, it does not have any "therapuetic benefit" for people with shoulder injuries and, therefore, is not "medically necessary". Then why would a doctor order the service? Sometimes, different schools of thought can be seen in the types of treatments physicians order for similar patient complaints. A doctor may have been instructed in his school or through the hospital where he/she performed internship that a CPM was beneficial, while the physicians from the review board may determine by other studies that it is not.

Sometimes, your physician can write a special letter detailing the purpose of the procedure or equipment and it will convince your insurance provider to pay for the service. However, don't bet the farm on that. It is more than 99% likely that the request for you insurance to cover a usually non-covered service will be denied. This IS one method that insurance providers can use to limit their exposure, maintain costs and generally insure they stay in business to provide your coverage in the first place. Also, you may take that as a sign that you should get a second opinion.

So, how do you avoid finding out "after" the fact that you are going to pay "out of pocket" for this service? First, you should make the physician (more likely his assistant) give you the exact HCPC or CPT procedure code for the service(s) he or she will be providing. Secondly, you need the exact diagnosis code for the condition. The diagnosis code is usually between three and five digits and is a standard numerical methodology for identifying medical conditions like "ACL" or knee surgery.

I know, I'm telling you to do a lot of pre-work here, but we're talking about your money, so, you need to decide if saving a couple of grand is just as valuable as the time you will use and possible embarrassment you might experience during this endeavor.

You will then need to ask, if you are going to have anesthesia, who is the anesthesiologist and what is his or her office phone number?

Will a specialist be called into consult on your case besides the physician that is performing the procedure? If yes, name and phone number.

Will the physician be performing labs? If yes, what laboratory will he be sending specimens to? Phone #?

If a professional admissions person was reading this, they would most likely tell you not to worry about it, they will "verify" the information for you. Again, if you are not in an emergency situation, thank them politely, tell them you'd appreciate it, demand the information anyway, go home and check it yourself. Call back the admissions person at the doctor's office or clinic and compare information.

What should you be checking?

Every person or company that will be providing a separately billed service (ie, not included on the hospital's or primary care physician's claim for the main procedure), you should call their office and ask them:

a) Are you an in network provider for my insurance "XYZ Healthcare Insurance"?

b) How much will you charge for your part of the procedure?

If you are lucky, the admissions or finance representative at the outpatient clinic or hospital will have done all the leg work for you and tell you in advance. If they aren't prepared on that day to explain all the costs, set up an appointment to come back BEFORE the surgery to discuss the financial aspects. Make sure that you ask them if all the charges they are discussing with you represents ALL the possible charges and services you'll be receiving during the procedure.

If all of the people or entities that will be involved in your care are not part of your network or "non-participating" you can ask the clinic or hospital to find someone that is to perform the service or you can simply look for a hospital or clinic that does use physicians, labs, etc that are all in your network and have the procedure performed there.

Again, you are thinking that this is a lot of work and a lot more hassle than you expected it to be, but you should look at this as a MAJOR purchase, just like a car or a house. Many procedures cost just about as much as your car these days. You wouldn't buy either a house or a car without knowing all the details, what is included and how much it will cost you to own those items. Would you buy a car without finding out if it needs any parts or repairs? Would you buy a house without knowing the property tax, the closing costs and if you will need to have someone fix the roof or the basement? Wouldn't you want to know how much that would cost before buying the house?

Again, I am talking about non-emergent situations where you have time to consult and decide. And, again, we are talking about the difference between owing $500 or owing $1500.

Isn't it worth it?

Your Medical Insurance and Your Durable Medical Power of Attorney

There is another reason to have a Durable Medical Power of Attorney. You may not know this, but your insurance, particularly if you have Medicare, will not talk to anyone, even your spouse, your mother, your father, your sister, your child, etc about your health insurance or any information contained there unless they have a Durable Medical Power of Attorney (also known as "Durable Power of Attorney for Healthcare") on file.

That's right, they will not speak to anyone about any services they denied, paid, authorized, did not authorize, etc, unless they have a Durable Medical Power of Attorney on file naming that person as your agent.

This is most difficult for people who are suffering from chronic illness or the elderly whose children, spouse or other person is trying to assist them in taking care of their bills, obtain appropriate medical care, etc.

A regular Power of Attorney that addresses your finances will not suffice. This is because, while the financial "Power of Attorney" may give some one the authority to take care of your other bills, your health care information is protected by the new Healthcare Information Portability and Accountability Act (also referred to as HIPAA). It's protected because these claims/bills usually contain information about your diagnosis and treatments given. The HIPAA rules protect your information even from your spouse, children, parents, etc for a very good reason. Mainly, your healthcare information is about your body and you control it as is legislated in most Patient's Bill of Rights.

No one else can have access UNLESS you specifically designate them through this legal form.

Further, it is not sufficient for your agent (the person you chose to represent you with your Durable Power of Attorney for Healthcare) to have a copy and TELL the insurance company, Medicare, Medical Assistance, or healthcare provider that they are that person. A legible and notarized copy must be filed with these entities.

Medicare, Medical Assistance and most insurance companies then list your agent as an acceptable person to speak to on their computer system for future reference.

Remember, your Durable Medical Power of Attorney does not have to go in effect immediately. You can specify a date or you can specify that it cannot occur unless you are deemed incompetent or incapacitated by two or more physicians.

However, if you are chronically ill (emphysema; Crohn's Disease, etc) or elderly requesting assistance from a family member, your Durable Medical Power of Attorney must give them the power effective today in order to allow that person to assist you.

So, if you would like someone to assist you with your health insurance claims, billing, information, etc, even if you are not incapacitated, you must:

1) Select an agent (name the person to assist you)
2) Complete a Durable Medical Power of Attorney
3) Sign it and notarize it effective immediately
4) File a copy with any entity that you wish your agent to be able to interact with (ie, Medicare, Medical Assistance, your private Insurance company, any case manager or social worker involved and all of your healthcare providers)

Once you've completed the form, if you are unable to do so, your agent can file the copies for you.

Update/correction: To clarify, if you are a spouse of a patient, some commercial insurance providers may speak to you regarding claims and other status without having a Durable Power of Attorney for Healthcare. You should call your payer and verify what is required. via hgstern at California medicine man

Advanced Health Directives You Need Them

Again, the Terri Schiavo case seems to continue to be front page news and it continues to bring up interesting conversations on the internet as well as real life discussions between families and friends.

A number of people that I've talked to lately have all told me that they were inspired by this case to make their wishes clearly known to their spouse, family and friends. Mostly by talking to them.

That is a fantastic first step. Unfortunately, there are a few drawbacks to just leaving it at that. And, unfortunately, most everyone inspired by this situation will just have that one discussion and then it will disappear from their normal everyday lives because, quite simply, we are talking about uncomfortable things like death, dying and incapacitation and most of us cannot really imagine a time when it might occur to us.

That being said, that first conversation is great, but, if you are serious about designating exactly the kinds of treatment you do or don't want in a given situation, you should be completing an Advance Health Directive or a Living Will.

You see, after you've had that one conversation (maybe you have it twice) it could be months, years and even decades before something happens (if ever) that requires somebody to act on your behalf. Usually, the people that are taking these situations seriously and seeking legal and documentary evidence of their desires are people who are going through traumatic health situations like cancer patients receiving chemotherapy or heart by-pass patients or transplant patients or elderly patients who have already experienced some traumatic health issues and see that they are possibly nearing the end of their life, etc, etc, etc. On any given day, your normal person who has no known health issues is not thinking about the "what if".

If they did, they probably have done what most of the people I know that are my age have done: had a general conversation about "not wanting to live like that", ie, plugged into a bunch of machines and not conscious or responsive by any means and having a machine breathing for them. That is what most people think of when they consider what "living like that" and "pulling the plug" means. They don't imagine themselves in a state like Terri Schiavo where they have some consciousness, but are severely brain damaged and, basically, not the person they were before the incident that caused them to arrive at that situation.

No, for most of us, the idea of the "end state" is one of two things: we die instantly (ie, no questions, no issues) or we are in that true comatose "persistent vegetative state" where we don't even wake up much less respond to ANY stimuli. That's what most people think of when they imagine a situation where someone might need to make the decision to "pull the plug". They cannot imagine the myriad of "in between" states that they can arrive at post traumatic episode.

It is great that this situation is at least generating conversations between people.

What's not so great is that these conversations will end there, quite possibly never broached again until that fateful day when someone is going to have to make some decisions and they will try to remember what you said and try to apply it to the situation to the best of their ability which is, of course, the most that we can ask of people, family, friends, loved ones in that situation.

However, there is a method, a document that insures that there is little guessing about what you would want to have done and it should be completed in conjunction with your Durable Medical Power of Attorney or Durable Power of Attorney for Healthcare as I discussed in my post: You and Your Durable Medical Power of Attorney.

This form is the Advanced Health Directives. It allows you specify exactly what medical treatments you would want or not want and under what situations. You can be as specific or general as you desire.

Something you should know about Advanced Directives: like Durable Medical Powers of Attorney, every state has their own necessary and specific language that is required to insure that the form is legal and acceptable in that state. If you create your Power of Attorney or Advanced Directive in one state and are hospitalized in another, your documents will most likely be accepted by the healthcare workers in that new state. Usually. Legal issues can arise, but that's why it is important to not just complete the forms, but to have specific conversations with your doctor, your family, your Durable Medical Power of Attorney Agent and any other people of interest that you think should know.

Here is a sample of the Missouri Advance Health Directive along with links to explanations of what these "treatments" entail:

I want the following life-prolonging procedures to be withheld or withdrawn:
(form requests the owner of the form to initial next to the items they would want to have withheld or withdrawn)

• artificially supplied nutrition and hydration (including tube feeding of
food and water)

• surgery or other invasive procedures

This can include, but not limited to, open heart surgery, intubating or creating a tracheostomy (hole in the throat to the trachea) to aid breathing, surgery to install an intravenous catheter for long term feeding, pain management or chemotherapy, etc, etc. Under this section, you may want to specify exactly what types of surgery or invasive procedures you would or would not want. For instance, you may want your healthcare provider to insert a tube to assist you with breathing if you are a relatively healthy person and this might apply after you have had an accident and your prognosis is not yet known. On the other hand, you may be a terminally ill cancer patient that does not want any life prolonging treatments. You should discuss what this entails with your physician and your selected Agent under your Durable Medical Power of Attorney so that everyone understands what you would want to happen and under what conditions. It is also important to note that you can change this form at any time while you are still competent and capable depending on your health condition in the future.


• heart-lung resuscitation (CPR)

• antibiotic

• dialysis

• mechanical ventilator (respirator)

• chemotherapy

• radiation therapy

• all other “life-prolonging” medical or surgical procedures that are merely
intended to keep me alive without reasonable hope of improving my
condition or curing my illness or injury

Again, this could include, but not limited to, a number of treatments such as catheterization of the urinary tract to enable urination, diuretic treatment, etc, etc, etc

Again, it is important to discuss these types of issues with both your physician and your chosen Agent to insure that the possible treatments are understood, their outcomes, their risks and under what conditions you will want these directives to apply.

The Missouri Advanced Directives Form goes a step further and contains two sentences that allow for certain treatments to be given, even if you have indicated otherwise, if it may lead to "recovery".

However, if my physician believes that any life-prolonging procedure may lead to a significant recovery, I direct my physician to try the treatment for a reasonable period of time. If it does not improve my condition, I direct the treatment be withdrawn even if it shortens my life.

This is important because it protects you from having certain treatments withdrawn when there is a possibility that you will not just live longer, but recover from your condition. Again, make sure you discuss exactly what this means with your physician and your agent. For instance, if you have terminal cancer and the physician indicates that you have six months to live AND before this time period is over you suffer from a heart attack, would you want the physician to treat you for your heart attack so that you might live out the remaining period or would you want that treatment withheld?

If you are relatively healthy and you are involved in a car accident that leaves you brain damaged, but there is a possibility that you will recover consciousness and live some sort of life, but may be paralyzed or may not function mentally or physically as you have done in the past, do you want to receive treatment or have it withheld?

These are the types of discussions that people should be having with their friends, family, loved ones, Agent and/or physician beyond the basic discussion of "not wanting to live like that" (specifically?) and "pulling the plug" (specifically).

The second sentence is important because it gives your physician and agent the imperative to make decisions about whether you will recover or not and to revert back to your previous testimonial concerning withdrawing treatments:

If it does not improve my condition, I direct the treatment be withdrawn even if it shortens my life.

Another important part of the Missouri Document is the paragraph outlining whether or not you would want to receive treatment for pain, even if you are not receiving any other life prolonging treatments.

I also direct that I be given medical treatment to relieve pain or to provide comfort, even if such treatment might shorten my life, suppress my appetite or my breathing, or be habit-forming.

This is important because some physicians may withhold pain medication, such as morphine, because the illness may be exacerbated by the pain treatment. If you are directing all other treatments to be withheld, you and your agent should insure that the physician understands that treatment for the pain and insuring comfort are more important than the potential problems that will ensue if it is administered.

Other questions you may encounter on your advanced health directive concern organ donation.

I want to donate my organs or tissues and realize it may be necessary to maintain my body artificially after my death on a breathing machine until my organs can be removed. ! Yes ! No ! I do not want to address this question now

Of course, you can designate "organ donor" on your driver's license and other documents as well. You may even designate that your body be given to a scientific institute for study or use as they see fit.

You should be aware that you do not HAVE to have both a Durable Medical Power of Attorney AND an Advanced Health Directive. Having one or the other are legally acceptable by themselves. Having both forms is only a form of protection should your Agent be unavailable and it can act as an assistance to your agent when they are trying to make decisions on your behalf.

IF I HAVE NOT DESIGNATED AN AGENT IN THE DURABLE POWER OF ATTORNEY, THIS
DOCUMENT IS MEANT TO BE IN FULL FORCE AND EFFECT AS MY HEALTH CARE DIRECTIVE.

In any event, you should always provide copies of the forms to your physician, a hospital you may regularly go to, your Agent, your family, other significant people, your attorney if you have one AND you should have a copy some place easily accessible, like a bedside drawer or your medicine cabinet, should you experience an emergency at home. You may also wish to keep a card or other form of notification in your wallet or purse that informs emergency care givers that such an Agent and/or documents exist.

Make sure you discuss the meaning and the intent of either form with the important people in your life.

Even better would be to list the name of your agent/emergency contact with their phone number and/or address for immediate contact.

Remember, every state has it's own requirements and forms. Be sure to obtain the right form(s) for your state.

Lectric Law: Advanced Directives
Advanced Directives
Disability Rights Center: Q&A on Advanced Directives

Advanced Health Directive Forms: All States

Your state legal bar association may offer these forms for free as well as other state organizations. To search your state legal bar association, simply go to any search engine and type in the words Advance Health Directive followed by the name of your state and the words "bar association". Example: Advance Health Directive Missouri Bar Association. Or you can simply type in the words: advance Health Directive Missouri. (This works for any state)

To obtain an advance health directive and/or Durable Medical Power of Attorney for the state of Missouri, go to Missouri Bar Association: Living wills and other forms

The Missouri's state forms are in PDF format and can be accessed here Durable Power of Attorney and health care directives

You and Your Durable Medical Power of Attorney

As the Terri Schiavo case continues to make waves across the United States, it would seem a judicious time to talk about deciding who gets to make medical decisions for you in the event that you are unable to.

Normally and in most states, if you are married, your spouse automatically becomes your defacto Medical Power of Attorney. They have the power to refuse or demand healthcare on your behalf. There is no additional form necessary nor legal process.

The problem usually occurs when you are single, in the process of divorce, separated, or if you do not feel that your spouse will be able to handle all of the decisions when the time comes. The other people that may have problems is when, as in the Schiavo case, the family disagrees as to the proper treatment of your case. For those of you who meet one of these criteria, there is a way to insure that the person you believe will be the most capable of making these decisions for you is designated and will be recognized by the courts as your legal representative if you do this correctly.

First, you should understand that most states recognize an appropriate guardian or representative of an incapacitated person in this order:

1) Spouse of the patient
2) Adult child of the patient (adult meaning someone over the age of 18 or 21 depending on the state)
3) Parents of the patient
4) A person selected and recognized by the courts (if you have no one and no other person is designated, your friend could petition the court on your behalf to be your recognized guardian)

If none of these are available, the court will most likely provide you with a guaridan ad litum.

If you are married and you feel that your spouse is most capable of making the appropriate decisions for you, no additional document is legally necessary (although, an advanced directive for healthcare may be advisable).

If you are widowed, divorced or a single parent whose child (singular) is an adult, no additional document is legally necessary (again, an advanced directive for healthcare may be advisable).

However, if you have more than one adult child, you may want to go the extra step of designating one of them your Durable Medical Power of Attorney, or the person that you want to make your medical decisions for you. You may consider that your adult children will be understanding when you ask one of them to be the decision maker without taking any additional steps to document it. You may also consider that your adult children will all work together to make the best possible decisions together about what your care should be. Unfortunately, health and end of life decisions are very stressful and difficult situations. It often brings out the best and sometimes the worst in people. Sometimes it just serves to point out the difference in beliefs. Even if you sit down and talk to each one of them individually and tell them each the same thing, the odds are that one of them will disagree with you or not quite remember it the way that the others do.

Again, your best bet is to decide which of these people will be best suited to making those decisions for you and designate them your Durable Medical Power of Attorney.

The same situation applies to those who are single, have no adult children and whose parents are divorced. This is all too common. At which point, both parents actually have legal guardianship of you. This can create some difficulties.

Once again, the Durable Medical Power of Attorney comes to the rescue.

What is a Durable Medical Power of Attorney?

Most everyone is familiar with the term "Power of Attorney". A typical Power of Attorney designates a person that can make FINANCIAL decisions on your behalf, including using your checking account, changing or selling property, changing or selling investments, paying your bills, etc. These forms can be very specific to allow or disallow one type of financial power or another and can be specific enough to indicate that it only becomes applicable when you are certified as incapacitated by two physicians or by signing a separate line that indicates the Power of Attorney is immediately in effect as of a specified date. This could even be today.

This form must be notarized and copies should be placed with your attorney, if you have one, the person that you are giving power of attorney to and any other person of interest, like a spouse, children or parents so that there can be no confusion about what your expectations are.

However, a simple Power of Attorney only takes care of financial issues. Designating someone your Power of Attorney does not make them the person that can legally make decisions for you concerning your MEDICAL condition or treatment.

This requires a Durable Medical Power of Attorney or a Durable Power of Attorney for Healthcare. The Durable Medical Power of Attorney designates a person that you have chosen to make your medical decisions for you. The form will also let you designate a secondary and tertiary person, not in conjunction with, but as a back up, to your first selection should they be unable to perform their duties. A Durable Medical Power of Attorney does not give that person any legal power over your financial situation. You can make your financial and medical power of attornies two completely separate people.

The Durable Medical Power of Attorney also allows you two different ways to indicate that the document is in effect. You can select to only have the document in effect should you become incapacitated and that incapacitation is certified by two physicians or you can select to have the document come into effect on a specified date.

Even if you choose to have the document come into effect on a specified date, if you are still deemed competent and are not incapacitated, you can nullify the document or simply continue to make your own medical decisions. Signing a Durable Medical Power of Attorney or a Financial Power of Attorney does not take away your rights to self determination. The only way this becomes an issue is if you are deemed incompetent AND someone is designated as your legal guardian. At which time, your legal guardian can seek to nullify your Durable Medical Power of Attorney or any Financial Power of Attorney.

This is why it is important that any document that you sign is notarized and on file with your attorney (if you have one) and other appropriate people with potential interest in your situation.

Let's be clear though: You do not have to have an attorney to complete these documents or make them "legal" in any way. The Durable Medical Power of Attorney and the Financial Power of Attorney can be completed by you and your designated representatives, notarized and copies distributed to your family, your designated representative and (recommended) in your strong box at your bank or some other safe area without ever seeing an attorney. If you have extensive property or special circumstances, it is still advisable to seek the assistance of an attorney.

The forms are very simple and the directions are very clear.

You can obtain more information about Financial Power of Attorney at 'Lectric Law. On this website they answer most of the basic questions regarding the extent and effectiveness of Financial Power of Attornies and also provide you with several links where you can obtain this form. A word of caution, there is no federal law regarding power of attorney. Every state has their own laws and almost every state requires specific language to be met to qualify it for a power of attorney in that state. You can find the power of attorney for your state at Find Legal Forms.

For more information about Durable Medical Power of Attorney go to Find Law: Life Events or Lectric Law: Power of attornies and you can find your specific forms at IPower of Attorney: Healthcare for all states.

Remember, every state has their own requirements. You should use the form that is specific to your state. Some generic forms may be acceptable, but it is advisable to use the forms specific for your state. You may also look up your state's legal bar association to find additional information.

At all times it is recommended that you discuss your decisions with your immediate family and make sure everyone is aware of your intent.

Hospice Blog via Dr. Tony also addresses this issue.

Next post: Advanced Health Directives - What they mean and why you need them even if you have had verbal discussions or designated a Durable Power of Attorney for Healthcare.

Why I Am Writing This Blog - Open Secrets

First of all, before you read anything else, you should read the disclaimer on the right hand side of this website. While I have plenty of experience in the Healthcare Administrative field, nothing I say here should be taken as the final word, professional, legal or medical advice.

Information posted here is strictly my opinion and may not apply to every situation. Also, it's free and, like everything you get for free you should take it for what it's worth: nada, nothing, zero, zip, zilch. It is strictly meant to provide general information and pointing in the right direction for the poor lay people who end up using their health insurance and get surprised when they get a bill.

This is not a professional service. If you are a doctor, a nurse, a pharmacist or anyone seeking professional assistance with your healthcare billing you should look up the yellow pages and find someone who does it for a living and will be happy to take your money for said services.

As I am an employed professional working for an un-named healthcare provider, I cannot offer professional advice to a potential competitor as it would be deemed as "moonlighting" and, if my company ever found out, I could be fired. Since I basically like my job, I will try to avoid that at all costs. Therefore, this blog and all information on it will continue to be "free". All information will be general information that is available to anyone who has a mouse, a keyboard and access to the internet. At no time will I give out the name of my employer nor any proprietary information. So please, don't ask.

Last thing before I get on with the "why's and wherefores":

The comment section will be open for comments or questions. I will try to the best of my ability to answer any questions or respond to any comments. Again, it's free. So, take it for what it's worth. Once I answer your questions you will probably always see the following disclaimer: Call your insurance provider customer service, your insurance benefit administrator for your employer or the healthcare provider who sent the bill. This is for your own protection and mine as, due to the limitations of the blog, I cannot know all the information surrounding your situation nor take responsibility for it. Most insurance providers have websites where you can look up FAQs or send general questions regarding benefits. I find phone calls are always appropriate as well.

In order to further protect you and me, I ask that you never leave your full name, insurance information or any other information that may compromise yours and mine anonymity. It's also against the law. Please be kind to this blog and help make sure that it can stay in operation so that other folks who might have general questions can get assistance.

Last, anything I say should not be construed as an endorsement or defamation of any insurance payer, state or federal government health program (although, I may occasionally point out the problems or benefits, per my opinion, with certain initiatives).

Darn, nearly forgot. If you are a healthcare professional sneaking in a question, please do not leave your real name or any affiliation identifier. See comment about "moonlighting".

Thank you, the management.

Now, on with the "why's and wherefores". Basically, I decided to start this blog for so many reasons, it's hard to give an exact list. I may miss a few and recover them as I go along. Please be patient (no pun intended). The main reason is that I have seen far too many people, patients, healthcare providers, etc, that have no idea what or how health insurance works.

Sure, sure, most people know that they have to pay $25.00 (give or take a few) when they go see the doctor, or $15.00 copay for their prescriptions. They might even know that an emergency room visit is going to cost them $250.00. After that, most people don't know much. For most of the covered population, that may be all they will ever need to know. Maybe they never end up at the hospital or have the doctor performing blood work or having a consulting specialist look in on their case. Odds are, at least 1 out of every 20 people end up getting that and much more.

Most people I know, and that includes many of my family members, get those little statements from their insurance company or from the doctor or from the hospital and, if they're partially with it, they might open it and, at least, glance at it. The rest of the people I know look at the outside of the envelope and then toss it in a drawer if not the trash.

Then, one day, they come home, check the mail and *presto* there is a giant honking bill from their healthcare provider asking them to pay $1425.00 because their insurance denied the claim or said that they had paid all that they were going to pay and the poor patient, still trying to recover from their illness or trying to catch up bills they couldn't pay while they were on medical leave, get to have a heart attack right there. That's if they pay attention and have any inclination to pay the bill.

Then, there are those that are eating dinner one night and a telephone call comes in from ABC Financial Counselors trying to collect a debt for unpaid medical bills. Next thing you know, people are in trouble with their credit or have a lien on their house or are committing bankruptcy.

AND, most of the time it is avoidable if only they had paid a little more attention to what was going on with their insurance or had enough information to decide whether they absolutely needed that brand name, titanium plated knee brace or the basic, ACME steel one would have done the same thing and cost a lot less. Then there are those basic things that all companies do and that is to get the patient to sign a little form that says they will be financially responsible for any services that their insurance doesn't pay or for any difference in the billed amount. It's not sneaky or against the law, it just so happens that most people are more concerned about their health right at that moment and those pesky small print forms don't seem quite as important as they do a few months later when the bills are coming in.

I've met one too many of these folks, including some family members that have called me up and asked me to come over and read their insurance information because they don't understand it. Particularly, elderly folks. A lot of these people would be in a lot better situation if a family member took an interest in their situation and made sure that their Mom or Dad or Grandma or Grandpa were doing okay with their medical stuff. You'd be surprised how many elderly people are paying for things that their Medicare benefits should have covered simply because they don't know any better.

Many times, it's legal, too. Mainly because, once again, a form gets signed and the elderly person, while receiving instructions on the form (as is necessary by law) doesn't have a clue about what it says or only understands half of it. When they are sick, you can bet, even if they are generally spry and self reliant, even the best of us sometimes need a little assistance in figuring out what's going on.

Again, it's not about legality or trying to pull one over on the poor folks, it is just most of the time people really do not understand health insurance benefits or rules and they get stuck with something they shouldn't have or because it is less expensive for the healthcare provider to deal with the patient directly and let the patient worry about their insurance claims.

The other thing you should know is that most of the people who are preparing the claims from the doctor's office or hospital or processing claims for the insurance carrier don't have much more of a clue than you do about your insurance. They know what they were taught or what they can pull up on the computer and sometimes, they don't know all the places to look in the computer system or what some things are called anymore than you do so they end up giving you and your healthcare provider bogus information. Many people think that this person on the other end of the line is the be all and end all of the information tap and whatever they get is whatever they are going to get. They get intimidated so they don't ask to speak to a manager or a head customer service person and then they end up getting the raw end of the deal.

I've seen this way too many times. I've also seen several companies that have started up to help people out with their medical bills. These are great endeavors, but there aren't many of them out there and it means that the common person, like you and me, just end up muddling through it ourselves and generally, not doing a very good job of it.

Don't get me wrong. I feel for healthcare providers, too. Being in the business, I can't tell you how many doctor's offices I've seen that have a huge amount of outstanding accounts receivable (that's unpaid bills from patients and insurance companies for you lay people) and end up eating a ton of it, basically providing services for free, because they can't collect, they don't have knowledgeable people, they don't take the necessary steps up front or they don't have very good financial discussions with their patients before or after providing services. Most of it could have been avoided, just like the patients' problems, if they had done a little judicious research before hand.

And let me add this, for any doctors who may read this in the future: I understand when you are in a practice by yourself that you often can't afford the best of everything, but I have to say, as I note far up on this page, you get what you pay for. If you go cheap, that's what you are going to get and you are going to come into your office one day and find out that you don't have enough money in the bank to pay your rent, your lab bill or your single employee's salary (much less your astronomical student loans).

So, why am I writing this blog? Because I feel that it is time that people like me help people like you get the information you need to keep from getting sucker punched by your healthcare bills.

It's a big, open secret. Everything you need to know, you can know. You just need to know how to ask for it and what it is called.

Thus begins the Medical Insurance Guru blog. The comment section is open. It will allow anonymous posting. Please feel free to drop a line or ask a question. Please be warned, if your question is good enough, it may become a separate topic of a post.

Be sure to read the Medical Terminology 101 post below. We will be covering one of those topics in more detail in the future.

Thank you and enjoy.

Medical Insurance Terminalology 101

Before we discuss anything else on this blog you should be familiar with a few words regularly used in regards to Medical Insurance. This post will be regularly updated and will appear on the side bar for regular reference.

Premium - This is the amount you pay either on a monthly, quarterly or yearly basis to purchase medical insurance from a medical insurance provider. This may be payed solely by you, the policy holder, or in part or in toto by your employer or may even be payed out of your social security benefits if you are a Medicare recipient.

Policy Holder - This is the person that "owns" or pays the premium on the medical insurance policy. If you have taken out insurance through your employer and you have added on your spouse, children or other dependent, you are the "policy holder". If you have purchased medical insurance privately on yourself and/or on another person such as a spouse, children or other dependent and you pay the premiums, you are the "policy holder".

Dependent - After the policy holder, any person such as a spouse, children, elderly family member or other person for which you pay for and provide medical health insurance coverage.

Benefits - A list of services that you are purchasing with your premium payments. All benefit packages are different. You should read the benefits information provided by your insurance provider/carrier carefully. There is no guarantee that a service covered by one insurance provider will be covered by another or considered part of their "standard" package. Further, if you are buying special policies or supplemental policies, these may have further restrictions on what will be covered. Whenever in doubt of what your benefits will cover, you should always call your customer service representative at your insurance provider.

Insurance Provider or Insurance Carrier - This is the company that holds your insurance policy and to whom you pay your premium. When you belong to an independent insurance group, you should always determine who that group's parent company is. Many private group insurance companies are owned by parent companies such as Blue Cross and Blue Shield, Aetna, Cigna, AIG, etc. This parent company ownership may influence how your private group insurance provides services and pays claims.

Major Medical Insurance Policy - A Major Medical insurance policy usually includes, but is not limited to: Hospital, Emergency Room, Physician, Specialist, Prescriptions, lab work, rehabilitation (physical and mental), Oncology, gynecologist, Psychiatric, home health and nursing, durable medical equipment, etc. These services or benefits are usually covered at 50% to 100% of the cost (percentage of coverage and exact benefits/services may vary depending on the policy, copays, deductibles and other out of pocket expenses). If your policy does not cover most of these services or covers these services at less than 50% of the charges, it may not be a major medical policy. Make sure that you read your benefits package carefully or call your customer service representative to understand what benefits are available. Your available benefits may vary depending on the policy you or your employer has purchased. If you have Medicare or Medical Assistance (also referred to as Medicaid or Medi-Cal in California), your benefits will be different. Please read further for additional information on these kinds of medical insurance coverage.

Primary Insurance Provider - This is your primary or first insurance policy and is usually a MAJOR MEDICAL policy. This is the insurance policy that all of your medical claims will be billed to first. All insurance claims are processed based on order of primacy of the policy and/or the patient's relation to the policy holder or the policy holder's date of birth when referring to children or if there was an accident involved, motor vehicle or home owner's insurance may be primary. For instance, if you have an insurance policy through your employer (ie, you are the policy holder), your spouse has an insurance policy through their employer under which you are listed as a beneficiary (ie, you are a dependent) and you go to the doctor, your doctor will submit a claim to your insurance policy first as the primary insurance because you are the policy holder and your spouse's insurance as a secondary insurance because you are a dependent under that policy. You cannot change the order of this submission as it is governed by your state's insurance commission and laws governing insurance company operations. This is to insure that you nor your healthcare provider defrauds the insurance industry by applying for payment of claims against a policy that has no deductibles, copays or other out of pocket expenses or a policy that has a fee schedule that reimburses your healthcare provider more than the other policy. Stay tuned for other discussions about insurance policy primacy.

Secondary Insurance - Secondary Insurance is a second MAJOR MEDICAL policy that the patient is covered under as a beneficiary or dependent. This is different than a "supplemental" policy and it is important that anyone purchasing medical insurance know the difference. A secondary Major Medical insurance policy should also cover the basic major medical benefits listed above and should cover them at or above 50%. Once the primary insurance has paid the claim, the secondary insurance should pay any copays, deductibles or other out of pocket expenses unless specifically excluded by the policy OR the remaining amount is applied towards any outstanding copays, deductibles or out of pocket expenses as listed in your benefits package. Your secondary insurance may also pay any services denied by your primary insurance carrier as "non-covered" as long as that service is listed in your secondary insurance carrier's benefit package. Usually, these services are paid at your secondary insurances "usual and customary" reimbursement. Stay tuned for additional information about how secondary insurance works.

Supplemental Insurance - A supplemental insurance policy is usually NOT a major medical policy. Instead it is a policy "in addition to" (supplement) your major medical policy. This insurance will ONLY pay the copay and or deductible AFTER your primary and/or secondary insurance has paid. It often does not pay Out OF Pocket Expenses and it usually does NOT pay any services denied by your primary or secondary insurance. Supplemental Insurance is strictly used to pay the amount remaining after all other insurances have paid the claim. If a service is not paid for by your primary insurance, do not expect your supplemental insurance to pay the claim. Remember: Secondary Insurance and Supplemental Insurance are not the same.

Carve Out Policies - A carve out is usually NOT a major medical policy. Carve outs usually only cover specific services. For instance, some smaller companies may purchase "carve out" policies to reduce the cost of premiums. These carve outs may ONLY cover doctor visits, hospital admissions and prescriptions. The types of services covered by a carve out are extremely limited. Carve outs may also be purchased to cover a major medical service that the primary insurance does not cover. For instance, a carve out policy may be purchased separately to cover Psychiatric care if it is not covered by the main insurance plan. You should be very careful when purchasing medical insurance. Many people looking for inexpensive medical insurance have been induced to purchase carve out plans only to discover later that it does not cover many of the services that they need. Carve out policies have their place and purpose. Buyer beware.

Insurance Rider - An insurance rider is usually an addition to an existing insurance policy or benefits package. For instance, I noted a number of services that may be included in most major medical insurance policies. This does not mean that every service listed is covered under every major medical policy. For instance, everything may be covered by your policy except Medical Equipment (ie, crutches, wheelchairs, etc). You or your employer may like the general benefits package offered and the next benefits package above the one that you have may be $50.00 more per month. You or your employer may purchase a rider that covers Medical Equipment for an additional $5.00 more per month instead. Thus, providing coverage and keeping the costs low. Not every insurance company offers these riders. Read your insurance benefits package carefully or contact your insurance provider customer service representative.

Insurance Identification Number or Health Insurance Number or HIC#: This is the the "number" that your insurance provider/carrier assigns to your policy to indicate you, John Doe, as a covered member of their insurance plan. This "number" is sometimes a mix of numbers and alphabet letters. The length and composition of this "number" varies depending on the payer. Most insurance companies no longer use your social security number to reference the policy due to the Health Insurance Privacy and Portability Act. Every claim submitted by your healthcare provider must have this number on it to insure all claims are properly processed. Your identification number is usually located on the identification card provided to you by your insurance company. You should have this card on you at all times to avoid problems with claims, particularly during an emergency situation.

Group # - This is the "number" that your insurance provider assigns to the "group plan" that you are a member of. For instance, your company may purchase a "group plan" for all of its employees. This plan may have a group # of ACE123 to indicate the company and the benefit package that you belong to. Every claim submitted by your healthcare provider must have this number on it to insure that the claims are processed properly. If not, it may be denied. (This does not apply to Medicare patients unless you have a replacement policy - to be explained)

Copay - A copay is the amount that you, the beneficiary/policy holder/patient, is expected to pay as your share of the cost of service. Copays are usually determined by one of two methods:

1) A set amount as designated by your benefit package. For instance, your benefit package may indicate that you will have a $20.00 copay for every visit to your doctor. Prescriptions $15.00/prescription. Emergency room $250.00/admission.

2) A percentage as designated by your benefit package. For instance, your benefit package may indicate that your policy pays 80% of all charges. In which case you will be responsible for the remaining 20%.

Example: Doctor charges $100.00 for a basic visit. Your insurance company will pay 80% or $80.00. You will owe a copay of 20% or $20.00.

Example: Emergency room visit costs $500.00. Your insurance company covers this benefit at 75%. Your insurance company will pay the hospital $375.00. You will owe a 25% copay to the hospital or $125.00.

Copay amounts depend on the type of policy and the benefit package you or your employer purchased. Be sure to read all of the benefit information to understand what your responsibility may be or call your customer service representative for information.

Deductible - A deductible is the amount of money you will owe above and beyond your copay. These are usually set amounts and are specifically designated by your policy. Any charges submitted will first have the deductible applied BEFORE your insurance pays any additional amounts.

Example: Individual Deductible = $250.00 Policy pays 80% of all charges
Patient is admitted to the hospital Emergency Room over night.

Total Charges $1000.00
Individual Deductible -$ 250.00 (Patient responsibility)

Remaining Amount $ 750.00
Insurancee pays 80% $ 600.00
Remaining Balance/20% $ 150.00 (Patient Responsibility)

The patient will owe $400.00 ($250.00 deductible and $150.00 copay)

Some deductibles apply to the "family" if more than one person is on the policy. This is usually a higher deductible than an "individual" and will always apply if more than one person is on the policy. In this case, all charges incurred by all beneficiaries on the policy will be applied towards the deductible.

Some policies may even apply separate deductibles to different services or benefits.

Example:
Individual Deductible $250.00 (this applies to doctor visits, lab work, etc)
Emergency Room Deductible $500.00 (this applies to emergency room visits only.)

Most deductibles are applied during a "calendar year". For instance, your insurance company may indicate that the calendar year is from January 1 to December 31. You may meet your deducible during that year, but on January 1 of the next year, the deductible starts all over again. Again, read your policy carefully or contact your insurance customer service representative to know what you will owe. Stay tuned for additioinal information on how your deductibles work.

Out Of Pocket Expenses - Also referred to as OOP. Out of pocket expenses is the amount that your insurance company sets as the amount that you must pay out of your pocket before specific parts of your benefit package kicks in. For instance, some insurance companies indicate they will pay 80% of all charges until the out of pocket expense of $1000.00 is met then they will pay 90% of all charges. Stay tuned for additional information on how your out of pocket expenses work.

Calendar Maximum - A calendar maximum is the maximum amount of payment your insurance carrier will pay between January 1 and December 31 of any given year. This amount may vary from as little as $500.00 to $100,000.00. Sometimes this limit is applied to ALL benefits on the policy and sometimes it is applied to separate benefits. For instance, your insurance policy may cover all services at 100% regardless of the amount, all year long except for Medical Equipment. For this benefit, your insurance policy may indicate that it will pay for 100% up to $2000.00. In which case, you can only get up to $2000.00 in Medical Equipment. This may seem like a lot of money when you are thinking about crutches, but many patients require wheelchairs or hospital beds or even oxygen that they can use at home and this can cost much more than $2000.00 in a calendar year. Many people are surprised to find out that they have a maximum limit on their benefits. Make sure you read all of your benefit package or call your insurance customer service representative if you have questions about your benefits. Stay tuned for additional information on how your Calendar Maximum works.

Lifetime Maximum - A lifetime maximum is the total amount of benefits that your insurance policy will pay for any and all services or benefits over the entire lifetime of the policy. Many policies have a $1,000,000.00 lifetime maximum which means that, no matter how long you have the policy, once the insurance company has paid out $1 million dollars in benefits, they will not pay anymore. For most people, this is not an issue. This usually only becomes an issue when someone faces a catastrophic or chronic illness. However, maximum benefits can vary per policy. Read your policy and understand your benefits.

Explanation of Benefits - This is also refered to as an E.O.B. or an insurance statement or a benefits statement. This is the statement that shows how much your healthcare provider billed your insurance company, how much the insurance company paid (if anything) and how much you will owe (if anything). Many people get these little pieces of paper and throw them out or put them in a drawer, never really understanding what it means until one day a big honking bill from the hospital arrives because the insurance company refused to pay for one reason or the other. You should always read these statements and follow up with the healthcare provider who sumbitted the claim or the insurance company to see what can be done to get the claim paid. Otherwise, everytime you go to the doctor, hospital, etc they always have you sign a disclaimer that says you will be 100% responsible for any unpaid claims. Don't be surprised by your bills. More information to follow on reading an EOB.

Denial, Denied - This is a service that the insurance determines they cannot pay. Denials do not always mean that the insurance company will not pay anything on the service. It may be that the claim for the services came without appropriate information. It may need additional information or documentation from the healthcare provider in order to be paid. Most healthcare providers employ a large number of billing staff whose job it is to prepare, submit and track payment for these services. That doesn't mean that it's always right the first time the claim goes in. Most of these people are lay people and many may have little, if any, real experience billing services. It's a big business out there and plenty of people take a few classes and think they know what they are doing until they get that first denial. As noted above, always keep track of your Explanation of Benefits (EOB) and know what is or isn't paid. In some cases, the denial may be because the service is "non-covered" or not part of your benefit package. In which case, you can and will be responsible for payment of that service if you do not have other insurance to cover it. Make sure you know what your benefits will cover and how much you will owe BEFORE consenting to a procedure, test, etc. Decisions about whether to accept these services are entirely up to you and your physician/healthcare provider.

Non-covered - This type of denial usually means that the type of service provided is not covered by your benefit package. This could be any type of service because all benefit packages vary. If you are not in an emergency situation, you should always find out what your benefits will or will not cover. Your healthcare provider should be verifying your benefits before providing services and should be telling you up front how much you may owe including deductibles, copays or amounts for non-covered services. You may be able to negotiate payment for non-covered services up front. Don't forget, if you have a secondary, major medical policy or a carve out policy, it may cover this service. Call all of your payers and find out what they will and won't cover to know where you stand. Your healthcare provider may still have to submit the claim to your primary insurance, even if it is not covered, in order to obtain a denial to send with the claim to your secondary insurance showing that the primary will not pay. Most healthcare providers don't explain this to you and many people get upset when they see their explanation of benefits and it says "patient responsibility". Your best bet is to call everyone involved and understand the situation completely.

Claim or HCFA 1500 or UB92: These are all forms with services and charges listed that your healthcare provider submits to the insurance company in order to solicit payment for services rendered. This form usually contains information ranging from your name, address, date of birth, insurance name, identification number, group #, who the policy holder is (if you are a dependent/spouse), diagnosis codes, Procedure Codes, dates of service, service description and charges to the insuranc company, just to name a few. These are usually accompanied by other documentation supporting the need for the services provided.

Diagnosis Code: This is a three to five digit number that represents the diagnosis or problem that your doctor has determined as the reason for treatment. This is a standardized coding system that all healthcare providers and insurance companies use to describe exactly what is wrong. These codes are very specific. For instance, a code for a broken arm will actually specify whether it is the humorous (upper arm), ulna or radia (lower arm) that has been broken. Incorrect and incomplete diagnosis codes are the number one reason for denial of claims.

Procedure Code or CPT code or HCPC: All of these describe a standard coding system that indicates exactly what service your healthcare provider gave as treatment. For instance, there is a specific code that represents a flu shot, a specific code for general exam, a specific code for an EKG, etc, etc, etc. Most of these codes fall within a specific range of diagnosis codes. If the doctor did not specify the correct diagnosis code justifying the treatment that he gave, your claim will most likely be denied as "not medically necessary".

Stand by for Medicare and Medical Assistance Terminalogy update and additional updates to this page.