A young friend showed me her Explanation of Benefits from Empire Blue Cross Blue Shield. “I don’t really understand it,” she said. This woman has a master’s degree from the London School of Economics but couldn’t comprehend what her insurance carrier was telling her about two claims for ophthalmology services.
Here’s what she was trying to unravel: One claim for $150 for something called “ophthalmologist” was not covered under the employer’s plan, and the insurer directed her to consult her benefits booklet for more information. This eye doctor often performs a number of checks during an exam, so what exactly was she supposed to look up and pay for out of pocket? She had no clue about what service to check on. It would be nice to know: after all, many health reformers and advocates of consumer-driven plans have warned us that insurance doesn’t cover everything and that we should budget for our care.
The confusion got worse when it came to the $175 the doctor charged for “other” services during the same visit. The particulars of these services were not described either. Empire said its “discount amount” was $52.94. Okay. On the back of the form, the “discounted amount” was defined as the negotiated reduction in the amount charged by the provider, as if the young woman knew about the ins and outs of insurance contracting. Empire said it would pay the doctor $107. But if the discounted rate was $52.94, why did the doctor get $107? No explanation was provided. The insurer did tell her that her total responsibility to the provider was $165, including the claim for $150 the carrier refused to pay and the $15 copayment for the one it did. But she already knew that, since the doctor had already billed for those amounts.
An Explanation of Benefits statement from Aetna was equally confusing. Odd, I thought, since a few years back the company had embarked on a transparency initiative to give its policyholders price and quality information about physician services. Why hasn’t the company’s concern for transparency applied to consumer bills?
Aetna’s statement also did not describe what service was performed. It simply said “office visit” or “X-ray or lab services.” Kind of vague, no? For example: what was the $21 the doctor charged for “medical services” which Aetna said the patient did not have to pay? Aetna’s explanation: the plan provides coverage for reasonable and appropriate services “as determined by Aetna,” and this charge for the mysterious service was already included in the amount the company sent the doctor for another procedure performed on the same day. Good to know, but was the doctor playing games by unbundling his services? A no-no, if true. I, a supposedly savvy consumer, will never know.
The statement said the doctor submitted a $370 charge for a wellness exam and that the plan’s negotiated fee was only $153.86, less than half of what he charged. The statement said the charge was paid at 100 percent, and the patient had no further out-of-pocket costs for the remainder. Had the doc agreed to that amount as payment in full? What was the patient supposed to know about balance billing? The column listing the amount of the deductible to be applied was blank. Did the deductible apply to this service? Apparently not. Why?
Lab services were another matter. As part of the wellness exam, the doctor took some blood samples. Aetna’s negotiated amount covered only $110 of the $547 bill, but the patient had to pay only the $110. Did the lab eat the rest of that amount, or did it charge someone without insurance more to make up the difference? Why did the deductible apply to the lab tests and not the exam? Aetna’s statement was mum. Did the employer’s plan make a distinction? Was it another case where the patient had to dig out the benefit booklet to find out?
But then, just when I was beginning to think insurers were tone deaf, comes an Explanation of Benefits statement from GHI, a company now under the umbrella of EmblemHealth Company in New York. Here was a statement that was consumer friendly and could be a model for other carriers.
Right up front GHI said the total claim was $1,367 for a routine office visit made by a friend who has diabetes. GHI paid $487, and the man paid a $75 copayment. Details followed and detailed they were. The carrier spelled out the “amount billed,” the “amount allowed by your plan,” and the “benefits we paid toward this claim.” Simple, direct English. None of that mumbo-jumbo about negotiated or allowable charges. Then each service was described such as “durable medical equipment,” “sedimentation rate,” “phosphatase alkaline,” “blood sugar test,” “hemoglobin lab test,” and so on. That way my friend could see that a hemoglobin test costs a lot more than a sodium test. If we are expected to challenge what our doctors are charging, this kind of specific comparative information is really useful.
At the end of the statement, GHI provided a clear glossary of terms, and when one term meant the same as another, it said so. For example, it said that the “amount billed” was the same as the “amount submitted,” which it described as “the amount the provider billed for the services you received.”
What’s the take-away from this little exercise? The GHI example shows that it is possible for insurance companies to make things easier for policyholders if they choose to do so. Hearing complaints from befuddled policyholders might provide some motivation to make that choice, as might new regulations from the new insurance gurus at the Department of Health and Human Services.
We should do our part and start fussing at our insurance company every time we get one of those undecipherable bills, even if the amount due is zero: eventually it won’t be and clarity will then be critical.
Tags: health insurance, insurance, insurance policy, rating health plans
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