Caryl Jones likes her doctor but hates her medical bills.
Jones, 60, had her gall bladder removed last year in a new surgical laser procedure that left her feeling fine. Then she started dealing with the bill. She was lucky-her insurance covered most of it, except for about $1,200 of the doctor`s $4,200 fee.
She pressed the insurance company to pay more and the doctor to take less. Finally, Jones employed a service that processes insurance claims. Unlike many Americans who simply get stuck for the difference, she used the processor to persuade her doctor to lower his fee.
The experience left Jones, like many American medical patients, with a bad taste about the costs and insurance coverage of this country`s health care system. The patients are caught between what the medical communuity charges and what insurance companies will pay, leaving many of them with large bills. Patients who think their insurance is supposed to pick up 80 percent of their medical costs find that, when they add it all up, often only half of the charges are being covered.
”I think somewhere along the line things have to change,” said Jones, an office administrator in a suburban Washington law firm. ”I`m not sure what the answer is. I just know things are drastically high.”
Medical professionals think their fees are fair. Insurance companies insist their reimbursement rates are equally accurate and fair and say they use sophisticated computer models that result in them paying 90 to 100 percent of what doctors charge.
But patients believe they are still paying too much.
Surveys show that Americans think the quality of their medical care is the best in the world, but every time an incomprehensible medical bill or partially paid insurance claim arrives in a mailbox, proponents of radical changes in U.S. health care financing pick up another ally.
In a recent survey by the Kaiser Family Foundation, 84 percent of those surveyed said they were satisfied with the health care services they use. But more than half said the nation`s health care payment system is so flawed that it should be replaced or drastically changed.
Three-quarters said things are so bad that the government should set the rates that insurers can charge for health premiums, and 71 percent said the government should set the rates that doctors and hospitals charge patients.
Doctors say insurance companies are trying to make consumers aware of the cost of medical care by deliberately setting low reimbursement rates. Physicians say they lose money on patients with low reimbursement rates, such as those on Medicare, and that only a few doctors overcharge patients.
Dr. Charles Duvall, a Washington internist, says the whole insurance reimbursement-physician fee situation ruins the doctor-patient relationship.
”Anything that comes between the doctor and the patient is like gravel in your knee joint,” he said. ”Most of the problem comes in communication. The patients have the responsibility for knowing and understanding their policies.”
But, he said, for many people that is difficult, since people change insurers so often, due to the rising cost of the premiums. Many employers also change insurance companies frequently.
In addition, when people are sick, fees are usually the last thing they are thinking about. They go to a doctor, get advice, take referrals to other doctors and only later do they start to worry about the cost. By that time, they have developed a relationship with the medical professionals and, unless they are dissatisfied with the care they are getting, they are unlikely to switch.
Several years ago, Duvall said, patients were insulated from the cost of medical care because insurance companies paid most of the bills. Now, with deductibles, co-payments and fee schedules, patients are being forced to pay attention.
That`s the advice of Barbara Melman, who runs the Chicago firm of Claim Relief Inc. Melman files insurance claims, sorts through medical bills and goes to bat for people caught between insurance companies and doctors, but she says the first line of defense is to know how much your insurance company will pay before you employ a doctor.
”If you are in the hospital,” she said, ”and the anesthesiologist comes in (to put you to sleep), you have to say to them, `Do you accept Medicare assignment?` ” she said.
But what about emergency treatment when there is no time to make a choice of doctor?
Greta Tatken, who runs Claims Recovery in Burke, Va., says that`s when some investigation of doctor fees and insurance reimbursement rates is required. ”It`s like the IRS and tax forms. The system is so complicated and so intimidating and so complex in general that people need help,” she said.
Tatken, hired by Jones to process her claims, said that one of the first questions she asked of Jones` doctor was, ”How did you come up with your fees?”
”A lot of times doctors pick a number out of the air,” she said.
It`s not that the nation isn`t trying to get a handle on medical charges. In the most radical restructuring of doctor fees to date, the federal government in 1989 overhauled the way that Medicare pays doctors. Designed to place a relative value on various aspects of doctor care, the fee scale is scheduled to be fully implemented by 1996.
In general, doctors who do high-technology procedures, such as surgeons, are paid less under the new scale. Internists and general practitioners are being paid more than they were used to getting from Medicare. Under the new law, doctors are allowed to charge Medicare patients no more than 120 percent of what Medicare pays. That figure will drop to 115 percent next year.
The new Medicare fee schedules have influence beyond the government program`s patients. Private insurance companies peg their reimbursement rates to what doctors charge, and what doctors charge is related to Medicare rates. According to Don White of the Health Insurance Association of America, data on doctor charges is pooled by his group, broken down into ZIP-code areas and used by many insurance companies to set the ”reasonable and customary”
charges on which insurance companies base their payments. In addition, many insurance companies have such a large pool of information that they do their own computer studies.
Kathy Worthington of Aetna Life and Casualty Co. said that when one considers that insurance companies are getting their information from actual charges from the previous six months, they generally pay about 90 percent of what the doctor charges.
”There`s a little bit of lag time there. If a doctor increases his fee in the six months, it might be a little low, but it doesn`t usually happen,” she said.
”We don`t usually cut more than 5 percent of the claims,” she added.
”It`s just that those are the ones that people are aware of.”
In addition, most health insurance policies have deductibles, meaning patients must pay some of their own costs. When the limits on charges are also factored in, it can mean that an insurance policy pays as little as 50 percent to 60 percent of the bill.
Dr. Charles Schulte, a pediatrician with offices in the suburbs of Washington, said physician fees are in flux due to the Medicare fee schedule, which is constantly being changed. He also said the Medicare fee schedule does not cover such basic items as well-child checkups, so it`s impossible for insurance companies` computer models to be accurate.
At this point, he said, ”customary fees” are ”plucked out of the sky” and ”any data the insurance company has is full of garbage.”
As a result, claims-processing companies say there is room for consumers to maneuver. Their advice: Fight.
The claims-adjustment firms say insurance companies` payments can be adjusted 80 percent of the time, and doctors frequently will lower their fees if pressed.
The fee controversy provides an opening for proponents of a single-payer health care system, in which the federal government would take over paying for medical care.
”The only sensible way this troubled system can go is to single payer,” said Dr. Quentin Young, president of the Health and Medicine Policy Research Group, a Chicago health care advocacy organization.
Young is among those who have been pressing the Illinois legislature to pass a Canadian-style universal health care system, in which the government would use tax revenue to pay everyone`s hospital and doctor bills. The bill has passed Senate and House committees, but floor approval is unlikely.
