ICD-10: Ready or Not Here It Comes

The compliance deadline for health care providers, health plans, and health care clearinghouses to transition to ICD-10 is October 1, 2015. The implementation of ICD-10 brings with it a host of emotions: anger, anxiety, and denial are just a few. The original launch date of ICD-10 was slated to take place in 2011. The “false alarm” start dates since have made it kind of reminiscent of Aesop’s fable, “The Boy Who Called Wolf.” But, after last month’s (February 11th) hearing, “Examining ICD-10 Implementation“ conducted by the Energy and Commerce Subcommittee on Health, it appears as if it will be out with the old ICD-9 and in with (I won’t say new) ICD-10 on October 1, 2015.

Are you ready?

Many proponents of the October 1, 2015 transition say that the almost 40 year old ICD-9 is antiquated and the expanded ICD-10 is an important part of bringing our healthcare system into the 21st century. They are ready and have been, delaying will only cost them more.

Opponents, like the American Medical Association (AMA) remain concerned about costs and impacts of the codes. The AMA has considered ICD-10 to be a massive unfunded mandate that comes at a time when physicians are trying to meet several other federal technology requirements and risk penalties if they fail to do so.

Before the February 11th hearing, the Government Accountability Office was asked to conduct a study on the readiness of the Center for Medicare and Medicaid (CMS) and the transition to ICD-10. Their report confirmed that CMS was prepared, but there are concerns that CMS cannot handle this huge undertaking.

Dr. Michael C Burgess, an obstetrician/gynecologist from Texas, spoke at the Energy and Commerce Subcommittee on Health hearing. “All roads eventually lead to CMS,” he said. “And if you will pardon me, that does appear to be a weak link in the chain….When CMS flips the switch, something breaks. Any time they flip a switch that involves the processing of data, their systems fail.” Dr. Burgess went on to ask, “What is the contingency plan for any problems that may develop?” He talked about how he asked about contingency plans before the launching of Healthcare.gov and was told that they were not necessary—no contingency plan was needed for the October 1st launch. “We know what happened after that,” Burgess said.

Unfortunately, it appears as if contingency planning is being left to the providers who are encouraged to have enough money on hand to cover themselves when cash flow diminishes due to delayed or denied claims. CMS estimates that the early stages of ICD-10 implementation will see denial rates rise by 100-200% and days in A/R could grow by 20-40%.

CMS has been conducting both acknowledgement and end-to-end testing to help ensure readiness. ICD-10 acknowledgment testing is available any day of the year up to October 1, 2015.

Acknowledgment testing is a way to determine if a claim can be accepted by a Medicare Administrative Contractor for settlement. This type of testing will only let you know if the sample claim can be accepted for processing. It is not the same as end-to-end testing, which processes a claim through all Medicare systems to produce an electronic remittance advice.

 

If you are not sure what type of testing you are eligible to participate in MLN Matters® Special Edition Article SE1501 explains the differences between acknowledgement and end-to-end testing with Medicare.

CMS has a website to help providers with their action plan. I’m sure you’ve heard of it, Road to 10. There are only 210 days left until October 1st. Will you be ready?

A Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners.  Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 10 years.

 

Don’t Get Stuck With Unnecessary Medical Costs: Understand Your Health Insurance

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Have you ever received a bill from you doctor’s office or hospital with charges on it you thought were covered by your health insurance plan?  If you are like me, the answer is a resounding, yes!

When this happens, obviously someone’s made a mistake.  The questions is, was it an error made by your insurance company or by you.

Sometimes it’s a tough call, so the first thing you should do to get to the root of the problem is to review your health insurance plan and make sure you fully understand what and how it pays.  It’s always a good idea to rule out mistakes you might have made before you call someone else to tell them they’ve made one. This is a lesson I’ve learned the hard way.

To avoid misunderstandings, let’s start by defining 6 basic insurance terms: 

  • Premium – This is the payment paid to the insurance company each month (quarterly, or yearly) to keep your health insurance coverage active.

 If you miss payments—your coverage can and will be terminated.

  • Deductible – the amount you must pay, each year, for medical care or services before your insurance will begin to pay for your coverage.

Let’s say you go to the doctor and she tells you that you need to have a procedure that is covered by your insurance. After the procedure, you look at the $1800 bill and are furious your insurance company didn’t pay anything. You think this can’t be right—especially since you’ve been paying those awful premiums every month so you’d have coverage when you needed it.  The thing is, if you have a $2000 deductible, you are responsible for paying the first $2000 for covered medical services before the insurance company will pay.  The bill is correct, you are responsible for the entire $1800.

  • Copayment (copay) – is a fixed amount you must pay for a covered service. Copays can vary depending on factors such as primary care physicians vs. specialists or generic medications vs brand-name drugs—things like that.

If your plan has a $30 copay for primary care doctor visits, you are required to pay $30 for each visit—usually due at time of service.  Do not confuse copays with coinsurance, they are very different.

  • Coinsurance – you are agreeing to share the cost of medical care with the insurance company. If your coinsurance is 20%, you will be responsible for 20% of the cost. Coinsurance does not get paid until you’ve paid your deductible.

You go back to the doctor (and pay your $30 copay) because you are now having problems with your feet. This time the doctor thinks you would benefit from orthotic inserts for your shoes.  You both check your plan, and yes orthotics are covered—great.  They are delivered to you two weeks later, along with a bill.  The cost of the orthotics is $600.  Can you calculate how much you would owe? Don’t forget, you need to pay your remaining deductible of $200 before the insurance company will pay anything, then your coinsurance will kick in. You and your insurance company will split the remaining cost—they’ll pay 80% and you’ll be responsible for the remaining 20%. 

  • Annual out-of-pocket maximum/limit: This tells you the most you would have to pay—during a given year—before your health insurance company would start to pay 100% for covered health benefits. Premiums are not included when calculating total out-of pocket maximum.

This number used to be confusing because sometimes key elements like copays or deductibles could be excluded. Now, according to HealthCare.gov this limit must include deductibles, coinsurance, copayments, or similar charges and any other expenditure required of an individual which is a qualified medical expense for essential health benefits.

  • In-network / Out-of-network: Insurance companies negotiate discounted rates and enter into contracts with certain doctors, hospitals, pharmacies, and labs. The providers who agree to these terms are listed as in-network.  Providers who do not have similar arrangements are listed as out-of-network.

It is important to know whether a provider you choose is in-network or out-of-network. Your costs will generally be less when using in-network providers since these providers have already agreed to a discounted rate. Plus, out-of-network providers are sometimes subject to larger copays, larger coinsurance, and bigger deductibles. It’s also important to note that out-of-network cost-sharing is not included when calculating out-of-pocket maximum/limits.  

Understanding the many elements of health insurance and how they relate to one another within a plan can be confusing, especially when there is so much to consider. The best way to get a handle on your health insurance coverage is to first look at the Summary of Benefits and Coverage. This is a brief document insurance companies are required to provide to consumers. Does your plan require a referral to see a specialist? You can find the answer to this and other questions in this document.  It will tell you everything you need to know about your plan by summarizing the key features such as: covered benefits, cost-sharing requirements, and coverage limitations—all in an easy to read format. It’s also a great resource to use to make cost comparisons when choosing a new plan

We all know insurance companies delay and deny payment on submitted claims all the time. Take the time to understand your health insurance so the next time you receive an Explanation of Benefits (EOB) you can read it and confidently understand whether it is correct or not.

A Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners.  Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 10 years.

 

American’s Are Making Poor Choices When Selecting Health Insurance

The other day I was scanning a CNBC article by Dan Mangan entitled “How bad are we at buying health insurance? Very, very bad.” It caught my attention because in the first line he wrote, “Health insurance isn’t rocket science, but buying it may seem just as daunting.”

That reminded me of a blog I wrote back in August 2013, Understanding Health Insurance, It’s Not Rocket Science—or is it? My blog was based on the results of a survey conducted by Carnegie Mellon University. Their study revealed that very few people (14 percent) understood the 4 basic components of their health insurance: copay, deductible, coinsurance, and out-of-pocket maximum. And only 11 percent could actually compute the cost of a four-day hospital stay when given the necessary information to do so.

Now, fast-forward almost two years and it seems like our ongoing lack of knowledge and understanding on the subject of health insurance is impacting our ability to select the best options when given a choice of health insurance plans.   

The CNBC article wrote about a new National Bureau of Economic Research working paper that examined health insurance plan selections at a company with 50,000 workers. When given a choice of prices on identical plans, each with the same coverage in and out of network, and same provider offerings, 65 percent of employees picked the wrong plan—even when there was only one financially logical choice. 

The employees picked plans with higher monthly premium payments in order to obtain the lowest deductibles or out-of-pocket costs. Any savings that might have taken place due to the lower deductibles was more than made up for by their higher monthly premium payments. Their poor choices resulted in the needless spending of $373 each year for the average worker.

“Workers who opted for the highest deductible plan, $1000, more than recouped that potential cost from the lower premiums they actually paid,” said the working paper co-author Saurabh Bhargava, assistant professor of economics at Carnegie Mellon University.  (Notice another connection between this article and my aforementioned blog?)

The unnamed company actually believed they were doing something good for their employees by giving them choices on how their plan was financially configured, now they offer only one, high-deductible plan, with a health savings account. 

Mangan’s article also included information about another survey of 5,000 consumers by health-care benefits platform provider, Alegeus Technologies. This survey measured how consumer literate people were when shopping for health care providers or services. 

On a scale of 1 to 100, with 100 being the highest level, health care consumers scored a 48.  The good news is that their score was 7 percentage points higher than it was last year.  The bad news is that consumers were much savvier when it came to shopping for other items: scoring 79 when purchasing electronics, 78 when buying a car, and 73 when shopping for travel deals.  

Since shopping for the latest techno-gadget is a lot more fun than purchasing health insurance coverage, I can see how people become technology aficionados rather than insurance buffs, but when considering the cost of health insurance benefits and how they relate to doctor and hospital bills it’s important to understand your options.  You never know, by making the best choice, you might save yourself enough money to buy yourself a new tablet.

A. Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners.  Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 10 years.