Consider this a lengthy but cautionary tale. I just spent two hours going back and forth between Memorial Sloan-Kettering Cancer Center (MSKCC) and my Blue Cross Blue Shield insurance vender, Affordable Benefits Administrators Inc (ABA) trying to decipher a health-care bill. I was trying to figure out why MSKCC billed me $441.58 for a service date, when ABA claimed I owed only $131.99. I had originally called the hospital because I found it odd that they were billing me an amount that was much more than the difference between what they billed ABA and what they received as payment. (As discussed in previous blog posts here, the amount a patient owes in-network is usually a co-payment or co-insurance based on what the insurance company contract with the provider determines is owed for the service.)
It usually goes something like this: Covered Amount = Amount Billed to Insurance – preferred provider or network discount. The covered amount is then divided into what the insurance will pay and what the patient owes.
In my case, I pay 10 percent of the covered amount (my co-insurance), so it would be: Covered Amount – (% co-insurance*Covered Amount) = Amount Paid by Insurer to Hospital.
The hospital wrote on my bill: Amount Billed to Insurance ($1204.00) – Insurance Payment ($1083.61) = Amount Owed by Patient ($441.58).
Now, anyone can see that the difference between the billed to insurance and amount actually paid by insurance is only $120.39 (the maximum amount owed to the hospital for my visit), and that is without taking into account any PPO discount, which lowers the amount further. Still, MSKCC’s account representative insisted that this $441.58 is the amount based on the Explanation of Benefits (EOB) from ABA, so that is what I am being billed. I tried to explain that it negates any logic that the amount MSKCC is billing could be more than three times the amount the hospital is even owed — but my logic fell on deaf ears.
The hospital also refused to contact ABA to look into this matter, saying it is the patient’s job to do this. I decided to hold off on explaining that it is not the patient’s job or place to coordinate between the hospital and the insurance companies, and that is the exact reason billing departments exist at hospitals, since I wanted to call up ABA myself to get a copy of the explanation of benefits.
This is probably a good time to mention that I have both a master’s degree in health policy and management and a bachelor’s degree in economics from Columbia University, where I helped teach classes on health-care finance and economics. I also worked for over two years at two of the largest global health benefits consulting firms in the United States, and worked daily with large insurance carriers.
I have analyzed health claims for hundreds of thousands of employees from dozens of Fortune 500 companies. This is why I never pay any doctor or hospital bill until I review it and compare to the EOB from the health plan.
I cannot imagine how most people, who do not have the health-care education or work experience I do, deal
with their health-care bills. I catch mistakes by the health plans and the hospitals all the time, and most times they are for hundreds of dollars.
After obtaining the explanation of benefits from ABA I was left with the following explanation:
Charges Billed ($1629.54) – PPO discount ($309.59) = Covered Amount ($1319.95),
Insurance Payment ($1187.96) + Patient Responsibility ($131.99) = Covered Amount (1319.95).
This now makes sense as my responsibility was exactly 10 percent of what ABA decided was the covered amount. Still, when I asked ABA to send this information to MSKCC, the representative said they had already done so, and had already paid, so they would not do it again. They were willing to fax me a copy instead. Again I encountered the misconception that the patient is somehow responsible for communication between the hospital and insurer. In this case, though, I wanted to call MSKCC back anyway because I need to understand where their mistake was.
Calling back MSKCC did not result in any productive conversation as the representative was only able and willing to read back to me what they had in their system. I tried to explain again, but got nowhere. When I asked MSKCC to start an inquiry into this matter, the rep told me to ask my insurance company to send them the EOB again. I politely explained that I can make a few phone calls, like I did, but I cannot facilitate the communications between the hospital and insurance company and that is what they were for. I also explained that this practice of billing a patient a large amount that was not owed was either criminally negligent, or fraudulent, but in either case I expected a full inquiry into this matter (mind you, MSKCC mostly deals with patients with cancer — patients who have enormous health-care bills, not to mention plenty of other things to worry about). I asked her to have someone in a management role in the billing department call me back, but she responded that they do not call back anyone. She said I can call in 7 to 10 days to see if there was an adjustment.
When I asked if they had received the fax with the new EOB I had sent them, she responded that it takes 24 hours for them to receive the fax digitally into their system. This cracked me up, since not only do they require patients to use an archaic method of communication, but they do not even really have a fax machine, and instead use the digital system to receive faxes (which makes you wonder why I could not e-mail them the EOB).
The takeaway lesson here is simple.
Think carefully about automatically accepting or paying any bill you receive from a health-care provider. It’s only prudent to review and compare all bills to your plan’s explanation of benefits.
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Thanks, iPatchman! We’re interested in hearing from MSKCC–we’ll drop them a line and let you know what we hear.
We’re also interested in hearing from you. Do you have a story to tell about a bill? E-mail us: info [at] clearhealthcosts [dot] com.