[blueash]

Balance billing is when the doctor has a charge, say 1000, and the insurance only allows 500, but instead of writing off that 500 the doctor bills the patient for the amount not covered by insurance. Sort of how most dental coverage now works. We have all seen those blood test bills of 800 fee and the insurance allows 27 and somehow makes a profit while writing off the 773.

Should this system be eliminated specifically for Medicare patients? The idea is that perhaps more doctors will accept Medicare if they can bill and collect whatever they charge, some from Medicare and the rest from the patient. This might incentivize some doctors to come to our area as taking care of Medicare patients will result in much higher income than taking care of the rest of the population where there are write offs on the insured and non-collection on the uninsured.

[rivaridger1]

We seem to have no shortage of doctors in and around The Villages, virtually all of which accept Medicare and the Patient Co-Pay and/or Medicare Advantage and/or Supplement insurance. Are you saying this system might incentivize more competent doctors to practice in the area ? Some doctors opt completely out of Medicare and cater to the well off, but I am not familiar with any of them currently practicing in this area.

[trichard]

Originally Posted by blueash

Balance billing is when the doctor has a charge, say 1000, and the insurance only allows 500, but instead of writing off that 500 the doctor bills the patient for the amount not covered by insurance. Sort of how most dental coverage now works. We have all seen those blood test bills of 800 fee and the insurance allows 27 and somehow makes a profit while writing off the 773.

Should this system be eliminated specifically for Medicare patients? The idea is that perhaps more doctors will accept Medicare if they can bill and collect whatever they charge, some from Medicare and the rest from the patient. This might incentivize some doctors to come to our area as taking care of Medicare patients will result in much higher income than taking care of the rest of the population where there are write offs on the insured and non-collection on the uninsured.

Under Medicare balance billing will the supplement pick up the remainder of the bill?

[laryb]

So I get billed $800, Medicare pays $27, and I get to pay the rest. I don't see how this is good for me, (unless there's something I don't understand) or the millions of other retirees on fixed incomes who's income doesn't increase because their raises are eaten up by Medicare increases. I'm by no means an expert on these matters (probably boarding on clueless), but this seems to be good only for a minority of retirees. I don't have any figures, but I would guess people without supplements out number those with supplements

[autumnspring]

Originally Posted by blueash

Balance billing is when the doctor has a charge, say 1000, and the insurance only allows 500, but instead of writing off that 500 the doctor bills the patient for the amount not covered by insurance. Sort of how most dental coverage now works. We have all seen those blood test bills of 800 fee and the insurance allows 27 and somehow makes a profit while writing off the 773.

Should this system be eliminated specifically for Medicare patients? The idea is that perhaps more doctors will accept Medicare if they can bill and collect whatever they charge, some from Medicare and the rest from the patient. This might incentivize some doctors to come to our area as taking care of Medicare patients will result in much higher income than taking care of the rest of the population where there are write offs on the insured and non-collection on the uninsured.

We just recently turned old enough to get onto medicare.
Frankly while some of you complain, private healthcare insurance cost us roughly twice what medicare costs.

Our entire system of medical payment is insane.

What other field doe the government and insurance companies tell you what you will be paid?

I've read that 80% of all medical care is paid for by either insurance or the government. I expect your $27 vs $700 was an exaggeration brought about by your frustration.
I had a sort of similar event years ago with QUEST where AETNA was my insurance company. My doctor ordered a series of blood tests we received a letter from QUEST that Aetna would not pay for one of the tests and they were billing us, if I recall it was like 250 for this test. They bothered my doctor for a letter explaining why the test was necessary and Aetna still refused to pay. A quick check on the internet and I discovered AETNA would have paid $50 for this test-that would have been payment in full. YOU WOULD NOT WANT TO TO BE THE PERSON AT QUEST TRYING TO TELL ME WHY THEY WOULD TAKE $50 AS PAYMENT IN FULL FROM AETNA BUT WOULD CHARGE ME
$250. I paid $50 noting on the check PAYMENT IN FULL along with the name of the poor lady who took my call.
THE BILL WAS PAID IN FULL AT THE RATE AETNA WOULD HAVE PAID.

We paid 12,000 for private healthcare insurance the last year before I was old enough to qualify for medicare. Of course I considered self insuring. I spent 4 days at the Villages Hospital and the bill was 50,000. AETNA settled the bill in full for 30,000. WHY AN UNINSURED PERSON WOULD PAY 50,000 BUT AN INSURANCE COMPANY PAYS 30,000 CANNOT BE JUSTIFIED. You as a consumer are forced to support an insurance company to be able to get medical care at what is market rate.

You mention in your post about a doctor writing off 500 on a 1,000 bill because the insurance company paid him 500 against his $1,000 bill. I've heard that thought before and asked my accountant about it. Actually I had a similar event in my business. You cannot write off money not paid.

Today, the private single doctor practice is gone. It was killed by the paperwork, dealing with not only the patients but with the insurance companies to get paid AND THE OUTRAGEOUS COST OF MAL PRACTICE INSURANCE.

People are all upset due to overbooking on the airlines.
Typical-you have a 3:00 doctors appointment so you get there 2:45. At 3:15 to 3:45 you are let into the backroom to wait another half hour to forty-five minutes. Your doctor is now working 2-3 patients including you AND HE HAS 15 MINUTES TO SPEND WITH YOU.

[birdiebill]

Medicare and private insurance reimbursements for medical claims are determined by taking the average of all usual and customary fees for a given procedure code. All health care providers know that they do not get reimbursed by insurance for the full fee they charge. They know what amount they will receive from either Medicare or private insurance and set their fee accordingly.

While I do not know the specific percentage of usual and customary fee, I will use this example. Suppose, in the case of the $1000 charge for a particular procedure, the approved amount by Medicare is $600 which is 60% of the average of all usual and customary billed amounts for that procedure. Remember this is just an example for easy math; I do not know the actual percentage applied to the average of the usual and customary fees. If the patient has met his medicare deductible, Medicare then pays 80% of the $600, or $480, and the patient or his/her supplement is billed for the remaining $120. The provider "writes off" the remaining $400 of the original charge. Writing it off means the provider deducts the $400 from the patient's account balance; the provider can not count the write off as a tax deduction against income though. It is just an accounting procedure to show the account has a zero balance after all insurance approved amounts have been paid.

If the provider knows that he/she will only get $600 approved for the procedure he bills the insurance, why does he not just bill $600 instead of the $1000? The reason is if the usual and customary amount for that procedure is billed by all providers at $600.00, insurance then will recalculate what they will allow. In the example above if the percent is 60%, the new allowed amount is .60 x 600 = $360 which is now the new amount allowed instead of the original $600.

The person without insurance is the one who suffers because when they get billed the usual and customary fee, they are expected to pay for the entire charge, not the amount that insurance companies approve. That is because providers must charge their usual and customary fee to all patients, or that fee is not usual and customary. They can not have one fee for insurance and another for non-insurance patients.

[dillywho]

Originally Posted by birdiebill

Medicare and private insurance reimbursements for medical claims are determined by taking the average of all usual and customary fees for a given procedure code. All health care providers know that they do not get reimbursed by insurance for the full fee they charge. They know what amount they will receive from either Medicare or private insurance and set their fee accordingly.

While I do not know the specific percentage of usual and customary fee, I will use this example. Suppose, in the case of the $1000 charge for a particular procedure, the approved amount by Medicare is $600 which is 60% of the average of all usual and customary billed amounts for that procedure. Remember this is just an example for easy math; I do not know the actual percentage applied to the average of the usual and customary fees. If the patient has met his medicare deductible, Medicare then pays 80% of the $600, or $480, and the patient or his/her supplement is billed for the remaining $120. The provider "writes off" the remaining $400 of the original charge. Writing it off means the provider deducts the $400 from the patient's account balance; the provider can not count the write off as a tax deduction against income though. It is just an accounting procedure to show the account has a zero balance after all insurance approved amounts have been paid.

If the provider knows that he/she will only get $600 approved for the procedure he bills the insurance, why does he not just bill $600 instead of the $1000? The reason is if the usual and customary amount for that procedure is billed by all providers at $600.00, insurance then will recalculate what they will allow. In the example above if the percent is 60%, the new allowed amount is .60 x 600 = $360 which is now the new amount allowed instead of the original $600.

The person without insurance is the one who suffers because when they get billed the usual and customary fee, they are expected to pay for the entire charge, not the amount that insurance companies approve. That is because providers must charge their usual and customary fee to all patients, or that fee is not usual and customary. They can not have one fee for insurance and another for non-insurance patients.

Unless something has changed, when I had my surgery years ago when they first started the keratectomy procedures for vision correction, it was not covered by my insurance plan so, I had to pay for it. They told me that it was $800 per eye without insurance, and something like (don't remember the exact figure) $1500 per eye with insurance. I just remember there was a big gap.

I sure don't like the idea of balance billing for all Medicare, though. It cost me quite a bit for my ear surgery at Mayo Clinic in Jacksonville because Mayo does not accept assignment from any insurance, including Medicare. They will file the paperwork for you. The checks are sent to you and then you pay what Mayo bills you. I didn't know it until I went there, but all the doctors at Mayo are salaried. This could explain why they draw only the best, because they all work together as a team and not in competition. That was explained to me by my surgeon there the first day I saw him. My ear specialist here knows him and says he is the best there is, and that he did a beautiful job. I have excellent hearing and do not have to have hearing aids, despite 4 surgeries on the one ear.

[golfing eagles]

Originally Posted by blueash

Balance billing is when the doctor has a charge, say 1000, and the insurance only allows 500, but instead of writing off that 500 the doctor bills the patient for the amount not covered by insurance. Sort of how most dental coverage now works. We have all seen those blood test bills of 800 fee and the insurance allows 27 and somehow makes a profit while writing off the 773.

Should this system be eliminated specifically for Medicare patients? The idea is that perhaps more doctors will accept Medicare if they can bill and collect whatever they charge, some from Medicare and the rest from the patient. This might incentivize some doctors to come to our area as taking care of Medicare patients will result in much higher income than taking care of the rest of the population where there are write offs on the insured and non-collection on the uninsured.

This thread opens a subject that is extremely complicated and would require a book to set straight, so I'll try to confine the discussion in response to 3 posts, starting with this one

"Balance billing" is a non-issue since 1/1/1992. All Medicare participating physicians, by law, are required to accept the Medicare reimbursement for each CPT code, based on the RVRBS value in their geographic area. You can "charge" whatever you want, but you MUST accept the value of the service as payment in full.

To give an example, Medicare allows about $57.90 for code 99213 (short office visit to address 1 problem such as blood pressure). They pay 80% of that number, and the patient or their supplement pays the other 20%. You can charge $300 for that code, but you MUST take $57.90 as payment in full. You can call the difference between $300 and $57.90 a "write off" if you want,, but it is NOT tax deductible, and all it does is cause accounting headaches. You CANNOT bill this difference.

So why do physicians charge more than the allowable amount on paper? First of all, there is private insurance. To charge less than an insurer will pay is just plain stupid. Second, believe it or not, reimbursement is occasionally increased, so you don't want outdated fees. Some practices carry this to the extreme. We set our "fee", which is ultimately an arbitrary number, just above the reimbursement of the best private insurance. BTW, Medicare fees are not terrible. Most private insurers set their reimbursement based on Medicare rates, usually 112-118% thereof. But some providers "charge" way above that. Example: Our in office lab charged $25 for a chem profile. The best insurance would pay $23.60, Medicare paid $13.85. The lab next door charged $385 for the same test, and got the same $13.85 from Medicare. The people who get "screwed" are those with no insurance, and I agree 100% with the poster above who stated that is not fair.

Now, if you CHOOSE to go to a physician in Beverly Hills or Naples, or a concierge physician that does not participate in Medicare, regardless of insurance, the whole bill is YOUR responsibility. They might submit the insurance paperwork, but essentially you will be paying the majority of the cost out of pocket. The same holds true for Mayo, or Laser Spine Institute, or Cancer Treatment Centers of America, so beware.

As far as access to care goes, 93% of all physicians in the US participate in Medicare, so there is no need for additional incentive to participate (at least not yet)

[golfing eagles]

Originally Posted by birdiebill

Medicare and private insurance reimbursements for medical claims are determined by taking the average of all usual and customary fees for a given procedure code. All health care providers know that they do not get reimbursed by insurance for the full fee they charge. They know what amount they will receive from either Medicare or private insurance and set their fee accordingly.

While I do not know the specific percentage of usual and customary fee, I will use this example. Suppose, in the case of the $1000 charge for a particular procedure, the approved amount by Medicare is $600 which is 60% of the average of all usual and customary billed amounts for that procedure. Remember this is just an example for easy math; I do not know the actual percentage applied to the average of the usual and customary fees. If the patient has met his medicare deductible, Medicare then pays 80% of the $600, or $480, and the patient or his/her supplement is billed for the remaining $120. The provider "writes off" the remaining $400 of the original charge. Writing it off means the provider deducts the $400 from the patient's account balance; the provider can not count the write off as a tax deduction against income though. It is just an accounting procedure to show the account has a zero balance after all insurance approved amounts have been paid.

If the provider knows that he/she will only get $600 approved for the procedure he bills the insurance, why does he not just bill $600 instead of the $1000? The reason is if the usual and customary amount for that procedure is billed by all providers at $600.00, insurance then will recalculate what they will allow. In the example above if the percent is 60%, the new allowed amount is .60 x 600 = $360 which is now the new amount allowed instead of the original $600.

The person without insurance is the one who suffers because when they get billed the usual and customary fee, they are expected to pay for the entire charge, not the amount that insurance companies approve. That is because providers must charge their usual and customary fee to all patients, or that fee is not usual and customary. They can not have one fee for insurance and another for non-insurance patients.

That statement would have been partially true, PRIOR to January 1, 1992. The term "usual and customary" is now only of historical significance, sort of like "horse and buggy" or "butter churn". Since then, all charge reimbursement is based on RVRBS.

RVRBS (Resource based relative value scale) was a multi-year project started in 1988 by a group of Harvard based economists and others ATTEMPTING to compare the value of various medical services based on education, skill and risk required to perform that service. It was supposed to equalize the disparity in payment between procedural and cognitive services.
Each CPT code is assigned a "relative value", and then a dollar reimbursement is set and multiplied by the RVUs, with some geographical adjustment. So there is no need to keep "usual and customary fees" high, since they no longer exist nor have any impact on the reimbursement scale.

Just a note of cynicism here---When Dr. William Hsiao and his group were developing his RVRBS scale, I believe Jonathan Gruber was a grad student at MIT. You remember Gruber, the economist who devised the financial structure of Obamacare and later stated the reason the bill passed was "the stupidity of the American voter"

The problem with RVRBS is that it still overpays procedures and underpays primary care. The meetings that deal with this subject are private, not open to the public or uninvited guests. And best of all, the AMA owns the copyright on the CPT codes, so anyone, including the government who wants to associate RVUs with CPT codes has to PAY the AMA, which was about 70 million in 2015. So much for "transparency"

I do however, agree, with the rest of the post, especially the uninsured getting the short end of this reimbursement stick.

[golfing eagles]

Originally Posted by suesiegel

We just recently turned old enough to get onto medicare.
Frankly while some of you complain, private healthcare insurance cost us roughly twice what medicare costs.

Our entire system of medical payment is insane.

What other field doe the government and insurance companies tell you what you will be paid?

I've read that 80% of all medical care is paid for by either insurance or the government. I expect your $27 vs $700 was an exaggeration brought about by your frustration.
I had a sort of similar event years ago with QUEST where AETNA was my insurance company. My doctor ordered a series of blood tests we received a letter from QUEST that Aetna would not pay for one of the tests and they were billing us, if I recall it was like 250 for this test. They bothered my doctor for a letter explaining why the test was necessary and Aetna still refused to pay. A quick check on the internet and I discovered AETNA would have paid $50 for this test-that would have been payment in full. YOU WOULD NOT WANT TO TO BE THE PERSON AT QUEST TRYING TO TELL ME WHY THEY WOULD TAKE $50 AS PAYMENT IN FULL FROM AETNA BUT WOULD CHARGE ME
$250. I paid $50 noting on the check PAYMENT IN FULL along with the name of the poor lady who took my call.
THE BILL WAS PAID IN FULL AT THE RATE AETNA WOULD HAVE PAID.

We paid 12,000 for private healthcare insurance the last year before I was old enough to qualify for medicare. Of course I considered self insuring. I spent 4 days at the Villages Hospital and the bill was 50,000. AETNA settled the bill in full for 30,000. WHY AN UNINSURED PERSON WOULD PAY 50,000 BUT AN INSURANCE COMPANY PAYS 30,000 CANNOT BE JUSTIFIED. You as a consumer are forced to support an insurance company to be able to get medical care at what is market rate.

You mention in your post about a doctor writing off 500 on a 1,000 bill because the insurance company paid him 500 against his $1,000 bill. I've heard that thought before and asked my accountant about it. Actually I had a similar event in my business. You cannot write off money not paid.

Today, the private single doctor practice is gone. It was killed by the paperwork, dealing with not only the patients but with the insurance companies to get paid AND THE OUTRAGEOUS COST OF MAL PRACTICE INSURANCE.

People are all upset due to overbooking on the airlines.
Typical-you have a 3:00 doctors appointment so you get there 2:45. At 3:15 to 3:45 you are let into the backroom to wait another half hour to forty-five minutes. Your doctor is now working 2-3 patients including you AND HE HAS 15 MINUTES TO SPEND WITH YOU.

This is a great post and nearly 100% correct. I have long been an advocate of a change in the law that would forbid any provider from charging the uninsured more than they are willing to take from a Medicare patient. There are probably some legal obstacles to this proposal.

The only other comment I have is that contrary to popular belief, the cost malpractice insurance is NOT a major factor. In 2010, malpractice premiums were $ 10 billion, out of a healthcare industry that totaled $2.7 trillion. For each individual practice, the malpractice cost as a percentage of receipts will vary by specialty. In NY, as an internist, it was about 2% of receipts, but we also got back about 20% of our premium each year as a "dividend". High risk specialties, especially Obstetrics and Neurosurgery may get into the 8-9% range, and of course there are isolated stories of much higher premiums, but those are the exceptions. The real cost of malpractice is not the premiums, but the cost of defensive medical practices to avoid litigation, which is estimated between $300 BILLION and $750 BILLION per year.

[Dan9871]

Originally Posted by golfing eagles

The same holds true for Mayo, or Laser Spine Institute, or Cancer Treatment Centers of America, so beware.

BTW GE, it's great having your "from in the trenches" comments on how the health care system works in practice.

I just want to make sure I understand what you are saying about places that don't accept Medicare.. If I go to a doctor or facility that does not accept medicare there is no way for me to use medicare to supplement what I pay that doctor. Even if that doctor sends paperwork to my medicare supplement insurance company and the insurance company sends the check to me and not the doctor. It's medicare all the way or no medicare at all.

Thanks again for all your explanations and clarifications.

[Tbear]

I am the author of " The Diary of a Partial Knee Replacement " on this forum and I continue to update it weekly for those that might have to go through a similar procedure as I did.

My next post was going to be on the cost of my partial knee replacement. Prior to my surgery, I had no luck trying to find out how much I might have to pay or how much a typical procedure like this is actually allowed by Medicare. All I knew was that I had insurance and it would be covered with a maximum out of pocket for me of $1900.

I currently have the United Healthcare Medicare Advantage insurance plan.

Although there were lots of smaller charges, the hospital bill in round numbers was $84,000. My hospital stay was technically one day with an overnight stay ( as required by Medicare ). The hospital was paid by the insurance company $8,500 as a total settlement.

I paid a $150 hospital stay co-pay.

The doctor bill was $2,800. Insurance settled that bill for $1,200.

The only other costs I've had to pay were the minimal copays for the pain meds I had to get as well as $15 copays each time I visit the physical therapist.

Needless to say that if I did not have insurance, I never would have had the operation...

Tbear

[golfing eagles]

Originally Posted by Dan9871

BTW GE, it's great having your "from in the trenches" comments on how the health care system works in practice.

I just want to make sure I understand what you are saying about places that don't accept Medicare.. If I go to a doctor or facility that does not accept medicare there is no way for me to use medicare to supplement what I pay that doctor. Even if that doctor sends paperwork to my medicare supplement insurance company and the insurance company sends the check to me and not the doctor. It's medicare all the way or no medicare at all.

Thanks again for all your explanations and clarifications.

Basically. If you go to a provider who does not participate in Medicare, there is no limit to what he/she can charge, other than market forces. If they submit the bill to insurance (and not stick you with the paperwork), the check will come directly to you, and so it does , in effect, supplement what you paid the provider. But there may be a huge difference between the charges and what Medicare pays, and that difference is out of your pocket.

When they started with the "participating provider' program back in the 80's, one incentive was that the provider got paid directly from Medicare, which eliminated a lot of collection problems. You would be surprised (maybe not) how many people would come to an office visit, and when they got the Medicare check go out and have a nice meal instead of paying for the service they utilized. Most of them wouldn't even get indigestion over it.

These days, the paper is eliminated from the paperwork. The provider electronically submits charges to their Medicare intermediary carrier, and the payment is auto deposited into their bank account, same with Medicare supplements and secondary insurance. The only "human" work is matching the payments to the charges (unless you are VERY trusting of government efficiency). With new EMR systems, the charge codes are entered by the provider along with the progress note at the time of service, so no one has to "punch" in the days charges. Not so easy if the patient gets stuck submitting it.

[golfing eagles]

Originally Posted by Tbear

I am the author of " The Diary of a Partial Knee Replacement " on this forum and I continue to update it weekly for those that might have to go through a similar procedure as I did.

My next post was going to be on the cost of my partial knee replacement. Prior to my surgery, I had no luck trying to find out how much I might have to pay or how much a typical procedure like this is actually allowed by Medicare. All I knew was that I had insurance and it would be covered with a maximum out of pocket for me of $1900.

I currently have the United Healthcare Medicare Advantage insurance plan.

Although there were lots of smaller charges, the hospital bill in round numbers was $84,000. My hospital stay was technically one day with an overnight stay ( as required by Medicare ). The hospital was paid by the insurance company $8,500 as a total settlement.

I paid a $150 hospital stay co-pay.

The doctor bill was $2,800. Insurance settled that bill for $1,200.

The only other costs I've had to pay were the minimal copays for the pain meds I had to get as well as $15 copays each time I visit the physical therapist.

Needless to say that if I did not have insurance, I never would have had the operation...

Tbear

And therein is one of the huge inequities in the system. Providers can "charge" way more than they will collect from insurers, and hospitals are by far the worst offenders. But they only get what the insurance pays, unless the patient is uninsured, in which case they need a bankruptcy lawyer. VERY, VERY unfair

It is also getting unfair for those under 65 WITH insurance, when you consider that many of these "Obamacare" policies have deductibles of 8,10, 12 and even $14,000. Hopefully, whatever emerges as the final version of the new health care act will address this, but I'm not holding my breath.

[blueash]

Originally Posted by golfing eagles

"Balance billing" is a non-issue since 1/1/1992. All Medicare participating physicians, by law, are required to accept the Medicare reimbursement for each CPT code, based on the RVRBS value in their geographic area. You can "charge" whatever you want, but you MUST accept the value of the service as payment in full.

I am not sure where you missed the whole point of this thread, that there is likely going to be a change in Medicare to change that rule that has existed since the Omnibus bill of 1989, thus the title "Medicare to allow balance billing"

Dr Tom Price who is the new head of HHS, has very strongly indicated he wants to change it on multiple occasions. He had introduced bills to do exactly that as a member of congress. It will require a change in the law, but he is very much in a position to do it, and has the support of the AMA. So this thread is a heads up to inform this Medicare using community of what is coming soon to a doctor's office near you. Higher costs for medical care if this is enacted. See the links for more information.