Personal Injury and Social Security Disability Blog

Survey Finds Health Insurance Costing More and Covering Less

Major national news outlets including network news gave substantial coverage to a Kaiser Family Foundation report on health insurance coverage and costs. The reports emphasized the higher rates and reduced coverage with one outlet noting that family insurance now costs more on average than a small car. Many also noted the report's conclusion that the Affordable care act was responsible for a small amount (2 percent) of the increase in rates.

NBC Nightly News reported, "a crippling trend in America," adding "it comes down to the choice...between your money or your health." NBC (Yang) said, "At the same time insurance is covering less. Employers say rising insurance costs forced them to choose between providing good benefits or hiring new workers or giving raises." The authors of the Kaiser Family Foundation survey "say it's too early to tell what will happen in 2014, which is when the key elements of President Obama's healthcare reform take effect."

ABC World News reported, "The Kaiser survey finds that over the past ten years, health insurance premiums are up 113% while wages have increased only 34%."

The CBS Evening News reported, "While the value of homes has been falling, the cost of healthcare has been rising. A report on health insurance costs today says the average annual family premium is $15,073. That's up 9% from last year. Employers generally pick up the majority of the costs."

The New York Times reports on its front page that the Kaiser survey results are "creating more uncertainty for the Obama administration and employers who are struggling to drive down an unrelenting rise in medical costs." Partly that's because "Kaiser estimates that one to two percentage points of the increase this year is related to provisions of the law already in effect," and partly because, "many businesses cite the cost of coverage as a factor in their decision not to hire, and health insurance has become increasingly unaffordable for more Americans."

The Washington Post reports on its front page that the Tuesday release of a Kaiser Family Foundation and Health Research & Educational Trust annual survey highlighted "premiums for employer-sponsored health insurance continued to escalate this year even as the share of workers getting less generous coverage reached a new high." Drew Altman, president of the Kaiser foundation said, "Without any real national discussion or debate, there's a quiet revolution going on in what we call health insurance in this country. Health insurance is becoming less and less comprehensive." Though roughly half of Americans "are covered by an employer sponsored health plan," yet "nearly 70 percent report being worried about having to pay more for healthcare or health insurance. Almost a third are 'very worried.'"

McClatchy notes that Kaiser President Altman is uncertain if the sharp premium increases are temporary or part of a larger trend. "Karen Ignagni, the president of America's Health Insurance Plans, said the increasing cost of medical care was the main culprit behind the rate increases." Also "insurers may have set rates higher this year thinking that the Affordable Care Act would increase their costs."

The Los Angeles Times reports, "The price of health insurance provided by employers for families jumped 9% this year over 2010 as rising healthcare expenses contributed to the largest premium increases in six years." In response, "companies and workers are increasingly turning to high-deductible policies that require workers to pay more out of their pockets for medical care."

The Wall Street Journal says that with many employers and employees turning to higher deductible plans, the sharp growth in premium prices seems counter-intuitive, though other industry experts emphasize that the remaining pool of candidates tends to be older and more likely to draw on the insurance.

USA Today reports, "As Congress works to decrease the federal deficit by cutting health care programs such as Medicare, policy experts say health providers will have to find money elsewhere, which could force insurance premiums higher for most Americans."

Bloomberg News reports, "The average cost of a family policy climbed 9 percent in 2011 to $15,073, according to" the Kaiser Foundation's "poll of 2,088 private companies and state and local government agencies." It also found that "the average price of a family plan has risen 113 percent since 2001." White House Deputy Chief of Staff Nancy-Ann DeParle's blog posting is cited saying that "premium increases aren't the result of the health overhaul," but instead are due partly to "insurers [having] overestimated the new law's effect and the gain in health-care spending this year."

The Financial Times says that the increase undercuts the Administration's argument that its healthcare reform would cut costs.

Reuters reports that Altman said, "There are a variety of factors that could have been responsible for (premium increases), but the major reason is not the healthcare reform."

Modern Healthcare reports, "The only factor among many possible drivers to the latest premium increase that the survey authors were able to quantify were two provisions of the Patient Protection and Affordable Care Act that went into effect last year: a requirement for plans to offer coverage to the young adult offspring of their enrollees and mandated coverage of preventive care. Those provisions composed up to 2 percentage points of the 9% increase, the authors found in a separate analysis."

The National Journal /Kaiser Health News reports premiums have grown by "triple the growth seen in 2010." And "the White House quickly weighed in, accusing private health insurance companies of reaping profits based on forecasts of rising costs that didn't turn out to be accurate." While, "many factors drive premium growth, the main one [is] actual spending on medical care."

Politico reports, "Premiums for employer-provided health insurance jumped 8-9 percent in 2011, passing $15,000 for family coverage - which is more than the cost of a Ford Fiesta."

From the American Association for Justice news release.

An Insurance Maze for U.S. Doctors

I enjoy reading the New York Times for top-notch reporting on current affairs, and for the great writers who have columns in that paper. But the paper also has several excellent blogs relating to health and medicine. One recent post to a health blog was written by a doctor, and concerned the problems physicians have in negotiating the insurance maze they have to go through to get their bills paid. Here are excerpts:

A former colleague from Canada who practiced medicine with me here in the States never hesitated to make one thing clear to me: He couldn’t wait to get back.

It wasn’t the cultural life that he missed, nor was it the ex-girlfriend I always suspected he pined for. It was the medicine.

“It’s different,” he would say wistfully, without elaborating. “Practicing medicine is just different over there.”

A study published this month in the journal Health Affairs made me think of my colleague again and offered one likely possibility for his return to Canada: There, he had more time to focus on his patients.

Researchers asked hundreds of physicians and administrators in private practices across the United States and Canada how much time they spent each day with insurers and other third-party payers, tracking down information for claims that were denied or incorrectly paid, resolving questions about insurance coverage for prescription drugs or diagnostic tests, and filing the different forms required by each and every insurance company.

Physicians in Canada, where health care is administered mainly by the government, did spend a good deal of time and money communicating with their payers. But American doctors in the study spent far more dealing with multiple health plans: more than $80,000 per year per physician, or roughly four times as much as their northern counterparts. And their offices spent as many as 21 hours per week with payers, nearly 10 times as much as the Canadian offices.

“The amount of time we spend on this is just crazy,” said Dr. Sara L. Star, a partner in a three-physician pediatrics practice in suburban Chicago. “But each insurance company has its own language, its own set of rules and specific contracts with certain laboratories, hospitals, physicians and pharmaceutical companies.”

And when those companies offer multiple “insurance products,” the convoluted coverage grid acquires yet another level of complexity. Each “product” comes with its own unique permutation and combination of authorization requirements, rules for claims and list of approved prescription drugs.

Large practices often choose to outsource the job to firms that specialize in wading through the labyrinthine rules and regulations. Some hire several nurses or administrators to work exclusively with insurers, with each specializing in the arcane rules of a single insurer. But most primary care providers in this country — clinicians who are part of practices with five or fewer physicians — cannot afford to pay for additional help. Instead, they must make their way through the thicket of insurers and rules by themselves.

The complicated task inevitably gets in the way of patient care.

A young patient complaining of extreme fatigue, for example, might benefit from a $40 blood test that could confirm infectious mononucleosis in 10 minutes. But a doctor cannot order the simple test without first checking with the insurance company to see if it is covered and if there are any constraints on where the patient’s blood can be drawn and the test run.

Tracking down answers often means phone calls with long periods on hold, digging up old patient information and even recruiting office workers to act as specimen couriers to other labs and hospitals in order to expedite results or save frail patients or harried family members the hassle of traveling to an “approved site” for a test or procedure. “If someone comes in with a sick infant who needs a test, we often eat the costs and draw the blood ourselves,” Dr. Star said. “We aren’t going to tell them to put that kid in a car seat, drive a mile to an approved lab, park, register, then wait in line.”

Even more confusing are frequent changes in health care plans, particularly regarding prescription drugs. Every week, payers send physicians’ offices notifications of changes in their list of approved medications, lists that run to hundreds of different drugs. The sheer volume of new information makes it impossible for doctors to keep up. “Physicians get into medical school because we can follow rules,” said Dr. Marian Bouchard, a family doctor who practices with two other physicians and a nurse practitioner in Bristol, Vt. “But none of us can or want to follow the minutiae of a hundred rules at once, especially when we are trying to be present for our patients.”

The authors of the study offer several recommendations to reduce the confusion and inefficiency of interactions between physician practices and payers. Not surprisingly, they propose simplifying the forms and procedures that add to costs without improving quality. “There are rules that really save money or improve patient care that health plans won’t want to change,” said Sean Nicholson, one of the study authors and an economist in the department of policy analysis and management at Cornell University. “But there are also a lot of things that don’t matter that they could and should standardize.”

The insurance industry, for example, could embrace a single set of universal standards to measure quality rather than the dozens that are currently used. They could adopt a uniform process of obtaining authorization for tests, procedures or consultations. And while widespread adoption of electronic medical records and changes in how doctors are reimbursed may eventually decrease some administrative burdens, the results of the study leave little doubt as to the costs now and in the foreseeable future for doctors and patients.

“We aren’t saying that we should go to a single-payer system,” Dr. Nicholson added. “But it’s important to know exactly what all the benefits of the current costs are.”

Administration Unveils Rules for Third-Party Review of Denied Health Claims

The AP reported, "The Obama administration says most Americans will soon have the right to appeal to a third party referee when their health insurer denies a claim for a medical service." The regulations "released Wednesday carry out provisions of President Barack Obama's health care law. Insurers generally give customers a couple of chances to appeal internally, but access to outside review varies."

The Washington Post reported that the new rules change "the standards in ways that disappointed leading advocates for health-care consumers." The regulations "are intended to guarantee patients nationwide the same rights to appeal if their insurers do not cover care that they consider necessary. The federal standards...replace a patchwork of separate state policies." HHS "officials issued the rules 11 months ago, but they have been working to fine-tune them amid a blizzard of lobbying. Insurers and employers have been urging limited rights to appeal, while consumer groups have been arguing for stronger patient protections."

The Wall Street Journal said that the Administration is delaying the effective date of these rules until January 1 of 2012. They were supposed to take effect in July.

CQ reported that the regulations give "states until January 1, 2012 to adjust their insurance regulations to comply with a health law requirement that health plans establish a process for enrollees to appeal claim denials within the company and to take their complaints to an external review board if need be."

From the American Association for Justice news release.

Hospital Cost Shifting Adds to Auto Injury Claim Costs

According to a recent study from the Insurance Research Council, low reimbursements from public health insurance programs, such as Medicare and Medicaid, have prompted hospitals to shift costs to automobile insurance companies—raising auto injury claim costs and forcing auto insurers to more closely scrutinize and negotiate hospital bills prior to payment. The IRC estimates that for Bodily Injury (BI) liability claims in 38 tort and add-on states, cost shifting in 2007 resulted in $1.2 billion in excess hospital charges. The full impact of hospital cost shifting, including that occurring in other insurance coverages and in other states, is likely much greater.

"The conventional wisdom is that hospitals aggressively seek to shift costs from public insurance programs to private payers such as auto insurance companies," said Elizabeth Sprinkel, Senior Vice President of the IRC. "With this study, we now have information on the magnitude of cost shifting and a better understanding of the need for supportive state laws and effective tools that will enable auto insurers to pay hospitals appropriately and help control auto injury claim costs," said Sprinkel.

Health Insurers Making Record Profits as Many Consumers Postpone Care

Health insurance companies have been making record profits the past several years, in part because Americans have been postponing medical procedures because of the shaky economy. Of course, that is not preventing the health insurance companies from charging higher and higher premiums. As a business owner I dread the time each year when our health insurance is up for renewal. Every year we get less coverage for more money.

This health insurance situation was detailed in a recent article in the New York Times. Here are the opening paragraphs:

The nation’s major health insurers are barreling into a third year of record profits, enriched in recent months by a lingering recessionary mind-set among Americans who are postponing or forgoing medical care.

The UnitedHealth Group, one of the largest commercial insurers, told analysts that so far this year, insured hospital stays actually decreased in some instances. In reporting its earnings last week, Cigna, another insurer, talked about the “low level” of medical use.

Yet the companies continue to press for higher premiums, even though their reserve coffers are flush with profits and shareholders have been rewarded with new dividends. Many defend proposed double-digit increases in the rates they charge, citing a need for protection against any sudden uptick in demand once people have more money to spend on their health, as well as the rising price of care.

Even with a halting economic recovery, doctors and others say many people are still extremely budget-conscious, signaling the possibility of a fundamental change in Americans’ appetite for health care.

“I am noticing my patients with insurance are more interested in costs,” said Dr. Jim King, a family practice physician in rural Tennessee. “Gas prices are going up, food prices are going up. They are deciding to put some of their health care off.” A patient might decide not to drive the 50 miles necessary to see a specialist because of the cost of gas, he said.

But Dr. King said patients were also being more thoughtful about their needs. Fewer are asking for an MRI as soon as they have a bad headache. “People are realizing that this is my money, even if I’m not writing a check,” he said.

For someone like Shannon Hardin of California, whose hours at a grocery store have been erratic, there is simply no spare cash to see the doctor when she isn’t feeling well or to get the $350 dental crowns she has been putting off since last year. Even with insurance, she said, “I can’t afford to use it.” Delaying care could keep utilization rates for insurers low through the rest of the year, according to Charles Boorady, an analyst for Credit Suisse. “The big question is whether it is going to stay weak or bounce back,” he said. “Nobody knows.”

Significant increases in how much people have to pay for their medical care may prevent a solid rebound. In recent years, many employers have sharply reduced benefits, while raising deductibles and co-payments so people have to reach deeper into their pockets.

In 2010, about 10 percent of people covered by their employer had a deductible of at least $2,000, according to the Kaiser Family Foundation, a nonprofit research group, compared with just 5 percent of covered workers in 2008.

Doctors, for one, say patients’ attitudes are changing. “Because it’s from Dollar 1 to Dollar 2,000, they are being really conscious of how they spend their money,” said Dr. James Applegate, a family physician in Grand Rapids, Mich. For example, patients question the need for annual blood work.

High deductibles also can be daunting. David Welch, a nurse in California whose policy has a $4,000 deductible, said he was surprised to realize he had delayed going to the dermatologist, even though he had a history of skin cancer. Mr. Welch, who has been a supporter of the need to overhaul insurance industry practices for the California Nurses Association union, said he hoped his medical training would help him determine when to go to the doctor. “I underestimated how much that cost would affect my behavior,” he said.

Who Represents Me in Washington and in Austin?

We are in the midst of some very bad legislative proposals, both in Washington and in Austin. Whether you're concerned about the loss of Medicare (Washington) or passage of a corporate immunity bill (Austin), you should contact your representatives and make your concerns known.

There is a handy site for Texas who want to know who represents them, and how to contact that person. Just visit http://www.fyi.legis.state.tx.us.

HHS Initiative Aims to Reduce Medical Errors and Cut Costs

Print media sources widely covered an announcement last week that the Obama Administration was partnering with hospitals, insurers and other groups in order to reduce medical errors. Most sources considered the move a positive for the Administration. The Los Angeles Times reports, "The Obama administration announced a broad new initiative Tuesday to reduce medical errors, partnering with private insurers, business leaders, hospitals and patient advocates to tackle a problem that kills thousands of Americans every year." This "campaign, funded by the healthcare overhaul the president signed last year, aims to cut by 40% over the next three years the number of harmful preventable conditions such as infections that patients acquire in the hospital." HHS Secretary Kathleen Sebelius made the announcement about the Partnership for Patients initiative, and CMS Administrator Donald Berwick noted that the initiative has "big goals."

The AP reports, "Sebelius said the new national Partnership for Patients will help other hospitals adopt those proven safety strategies." The program "is funded by $1 billion from the new healthcare law, but has the potential to save Medicare up to $10 billion in that same time."

The New York Times "Prescriptions" blog quotes Sebelius as saying, "Americans go the hospital to get well, but millions of patients are injured because of preventable complications and accidents. ... Working closely with hospitals, doctors, nurses, patients, families and employers, we will support efforts to help keep patients safe, improve care, and reduce costs. Working together, we can help eliminate preventable harm to patients."

According to the CNN "The Chart" blog, the initiative "will save 60,000 lives over the next three years by reducing millions of preventable hospital-related complications and injuries. Sebelius says the new partnership will also save about $35 billion in healthcare costs including $10 billion in Medicare savings." Meanwhile, American Medical Association president Cecil Wilson, MD, said that the group's "physicians will be encouraged to do everything they can to reduce adverse events and hospital readmissions." Wilson added, "We know that if we ensure that a patient's primary care physician receives their discharge papers within 24 hours of their release from the hospital, the likelihood of hospital readmission will be reduced."

The Hill reports in its "Healthwatch" blog that HHS aims to accomplish the initiative's goals "by disseminating best practices that have already allowed the nation's best hospital systems to cut preventable errors significantly." Berwick noted, "Blame and accusation are not the answers; teamwork, improvement are the answers." The AMA's Wilson is also quoted as saying, "We all need to do everything we can to avoid preventable patient illness and injuries while also working to ensure that patients are able to heal without complications."

Reuters reports that another goal of the initiative is to cut hospital readmissions by at least 20 percent. Sebelius noted that 500 hospitals are already part of the effort.

CQ reports, "Because the program is voluntary, making good on the projections is initially going to require a disciplined effort by hospital and other healthcare CEOs to devote time and resources to the project -- in addition to their efforts to comply with the many requirements of the healthcare law." Berwick explained that "the changes needed in healthcare delivery to meet the goals of the project will help hospitals qualify in a few years for incentive payments under the health law to improve patient safety."

The PBS NewsHour "The Rundown" blog reports, "The partnership will begin by asking hospitals to focus on nine types of medical mistakes where there is potential for dramatic reductions in harm. These include pressure ulcers, drug reactions, childbirth complications and surgical site infections." Notably, Berwick will "oversee the new partnership." He stated, "Through strong partnerships at national, regional, state and local levels ... we are supporting the hospital community to significantly reduce harm to patients.

From the American Association for Justice news release.

Medical Bills Need Reconstructive Surgery

"Prices are almost always inflated before being routinely discounted. Amid such financial flimflammery, it's virtually impossible for a patient to be a well-informed consumer of healthcare."

That was the subtitle of an article in the Los Angeles Times recently. The gist of the article is that medical bills, especially hospital bills, are almost impossible for patients to decipher because there are so many different prices for the same services, depending on the insurance status of the patient. Please click the link to read the full article — it's an eye-opener. Here are the opening paragraphs:

Susan Kovinsky underwent outpatient surgery recently at Cedars-Sinai Medical Center. The procedure, a hysterectomy, began at 10:40 a.m. By 3 p.m., she was on her way home.

The hospital bill: $65,514.97.

"When I saw that number, I was sure it couldn't be right," Kovinsky, 44, of North Hollywood told me. "How could just a few hours in the hospital cost that much?"

Yet this is a story of the healthcare system working as it's intended to. Cedars-Sinai did its job. Kovinsky's insurer, Blue Shield of California, did its job. Kovinsky has no complaints about either.

But if we ever intend to get our healthcare spending under control, clearly there's much to be done to reform a system in which a relatively common procedure and less than a day in the hospital costs more than a fully loaded 535i BMW sedan.

Kovinsky's case is illustrative of the problem. Medical bills are almost always inflated before being routinely discounted. This is done by hospitals and doctors to boost their reimbursement from insurers.

The upshot, though, is that amid such financial flimflammery, it's virtually impossible for a patient to be a well-informed consumer of healthcare.

 

 

 

Don't Take "No" As The Final Answer From Your Health Insurance Company

"Don't take no for a final answer when a health insurer rejects a claim and leaves behind an unpaid medical bill. As many as 50 percent of some appeals prompt insurers to reverse their decisions, according to a report from the Government Accountability Office."

That was the opening of a recent article in the Washington Post. The gist of the story is that about half of all health insurance claim denials are reversed on appeal. So if your insurance company refuses to pay a claim, don't simply accept that as the final answer, take steps to appeal the denial, and you may save yourself hundreds or even thousands of dollars. Here are additional excerpts from the article:

Insurers frequently deny claims due to billing errors, missing information or judgments on whether the care or service is appropriate, the investigative arm of Congress said in a report released Wednesday.
These denials can be based on mistakes like an incorrect code on a claim submitted by a doctor's office, said Nancy Davenport-Ennis, CEO of Patient Advocate Foundation, a not-for-profit that helps people appeal claims denials.

"You've got a lot of people in America who are ultimately paying a bill they don't owe because they don't realize it's an incorrect code," said Davenport-Ennis, who wasn't involved in the government study.

The GAO studied health insurer rejection rates at the request of Congress, which wanted a better picture of the issue as part of the health care overhaul it passed last year. The overhaul aims to cover millions of uninsured people after it unfolds over the next few years.

These figures do not mean patients have nearly a 50 percent shot at success if they appeal a denial. The statistics are based on cases appealed, and only a small portion of denials are challenged, said John Dicken, a GAO health care director.

"There are many times the claim is denied the first go-round to see if you come back and appeal," Davenport-Ennis said.

HHS Unveils Preliminary Format for Rate Increase Notices

CQ HealthBeat reports, "The proposed format for notices that insurance companies would have to post electronically when they ask for rate increases of 10 percent or more was unveiled Monday by" HHS. Such notices were mandated by the healthcare law to help prevent "unreasonable" rate hikes. "Under the proposed regulation, the responsibility for scrutinizing those increases will rest largely with state insurance regulators as long as those states have adequate systems analyze the requests." Steve Larsen, director of the Center for Consumer Information and Insurance Oversight, said, "People have been kept in the dark when it comes to the reasons behind their health insurance increases," but requiring insurers to disclose rate increase data "would provide an unprecedented level of transparency in the health insurance market."

Modern Healthcare explains, "Starting in July, insurers must report and justify rate increases over 10% in the individual and small-group markets. They must also tell consumers why they are increasing rates by such amounts." Notably, "America's Health Insurance Plans, a trade group, has submitted comments on the proposed rules, urging the federal government to delay rate reviews until 2012 and allow states to decide the specific triggers for reviews.

From the American Association for Justice news release.