What is it they say about sausages and laws?

They say you don't want to see how either one is made. Well, I'd like to add insurance policies, and well, pretty much insurance anything to the list.

I've been on a really great plan for the past 10 months -- thanks University of Michigan (and the gays! who paved the way for significant others to be covered on their non-spouse partner's plan). Each time a claim is processed, the insured member gets a copy of the Explanation of Benefits (EoB), which outlines the services rendered and if they were covered (and for how much). I'm the type of person to carefully go over each and every EoB; this is pretty much the only way to figure out what was charged, how much, and what was paid.

In looking over my EoBs, I noticed two things--one of which should be illegal, and the other is just really sneaky.

1. The discrepancy between what the provider attempts to charge and the price the insurance company actually pays is criminal. Case-in-point: Lancets (the little plastic pokey things that go in the lancet device in a blood glucose meter kit) are charged at $75. That's how much an uninsured person is charged. The insurance company has negotiated (strong-armed?) this price down to $5. The real cost of lancets remains obscure, but is probably somewhere around $10 if I had to guess. 
2. The insurance company uses the amount is was charged as the "amount covered." Remember, they didn't pay this amount; it's just what they were charged. Ie: "Amount covered: $75" when really they paid $5 for the thing. Disgusting.

While I think this is very sneaky of the insurance company, I don't think it's such a huge deal, unless they use this amount to calculate toward maximum yearly or lifetime benefits. When I was in graduate school at Brandeis, I had an insurance plan (boo Harvard Pilgrim, you sucky, sucky insurance company) that had a maximum yearly payout of $2,000 toward prescription benefits (then the plan reclassified all kinds of items that are traditionally under Durable Medical Equipment and called them prescriptions). If they used the amount charged--rather than the amount paid--as a way to calculate that maximum amount, then I have a HUGE problem with that.

Let's look at an example, using real amounts, of what this would mean:

Amount charged (and amount paid):

• Lancets: $75 (paid $5)
• Sensors: $1500 (paid $1100)
• Insulin: $768 (paid $485)

Total amount "covered" = $2,343 (leaving me with $343 to pay in addition to the copays for each Rx)
Total amount actually paid = $1590 (leaving me with $0 to pay, except for copays, and some cushion room for other prescriptions, should I need them)

Just to get political for a minute: Is this what Republicans envision for our free market healthcare system? One in which insurance companies and healthcare providers continue to obscure and confound pricing? One in which the uninsured is completely taken advantage of?

When you look at the inflated prices that the uninsured are paying, does requiring people to get health insurance seem so bad? Perhaps when all are insured, these criminal practices will go away.

Done.

The obscurity of medical services pricing

I've often wondered about pricing in the healthcare industry. It is so obscure. I'm very grateful to NPR for exploring this issue recently on Planet Money's Hospital Prices, Revealed! (Sort of).

First, I'd like to recount my fun visit to the hospital on New Year's Eve, 2010 (through Jan 1, 2011). Well, I won't get into the details of WHY I ended up in the hospital (new CGM + too much wine = low blood sugar and friends calling 911).

I will talk about the time a $10,000 bill that made its way to my mailbox. To make a long story short, I ended up making the hospital audit its own bill and contested the claim with the insurance company along with a two-page narrative with exhibits A-H showing why I was right. In the end, they sent me an anticlimactic letter saying that my bill had been adjusted and guess how much I owed? $35 (the amount of the emergency room copay).

What I was astounded by was the pricing of the itemized bill. (Apparently you can get your hands on these if you submit and sign the right form.) Items such as:

• Laboratory $78
• Unicyclin $109
• Emergency room $2151
• Observation room $1051
• IV start $314
• Physician fee $410

That "laboratory" fee of $78? That's for pricking my finger and testing my blood! Which, by the way, was vehemently against my wishes. I told them I preferred to test my own blood with my machine, but they insisted. The Unicyclin is for one pill of anti-naseau medication. IV start is the tubing for an IV. Just the tubing. The only reasonable charge I see up there is the Physician fee!

Now, when the whole thing was over, I looked at the EoB to see how much the insurance company actually paid for these services. $33 for the unicyclin (less $76 than the bill), $13 for the lab fee (less $65 than the bill). From the NPR article: "...private insurance companies negotiate their own rates with hospitals, and the rates bear little resemblance to the list price."

So, wait. Let me get this straight. If you were charging ME, a potentially poor and uninsured diabetic, it would be 3 to 5 times what you would charge the insurance?!?! WTF.

Insurance companies, hospitals, medical service providers: SHAME ON YOU. You are all so sketchy. Just be reasonable. Have a fair price. Stop engaging in this racket that bankrupts people and leaves them fat, sick, and/or dead. Have some goddamned decency. 

"It's no secret that hospitals' list prices are ridiculously high and seemingly arbitrary."
It is a secret (to me, at least) why Americans are willing to put up with this racket.

"But your policy is going to kill me!"

OK, so the medical equipment supplier won't approve my plea to get the new Dexcom G4 system, and thus I will need to stay on the crappy old system for a bit. Fine. I understand that what I'm asking for is kind of nitpicky, and yes, I can chill out on my current CGM for the remaining two months it's under warranty. But I really want the new Dexcom G4 system! It's amazing. 30% more accurate. Twice the range. My God, I'm drooling over it!

Here's my beef: I just don't think that an industry that deals with the health of people should be set up so rigidly. There has been a strong theme, growing bolder each day, of hiding behind policies. Some of these policies make sense (like not covering a new CGM until the last one is out of warranty). Some make ZERO sense.

I was on Harvard Pilgrim healthcare through Brandeis University, where I went to grad school. This was one of the darkest times of my life as far as coverage goes. They reclassified insulin pump supplies (traditionally classified as durable medical equipment and covered at either 80% or 100%), and instead put them under "Prescriptions." You know, like medicine and whatnot. Then, they capped Prescriptions at $2,000/year. Mind you, after the actual prescriptions I needed (insulin, test strips), I wouldn't be able to get any pump supplies, let alone a new pump, should I need one.

I calculated out how this policy would affect me: I would be covered for about 2 months of my life-necessary medical supplies. READ: I would die after 2 months. I did everything I could to fight this. I spoke with managers. I spoke with Brandeis to let them know that I would die under this policy. NOBODY CARED. (Well, they cared, but still hid behind the policy.)

How did this end, you ask? I'm obviously not dead (this happened in 2010). Cuz I'm a hoarder!!!! Mwahhahahaha! All diabetics are. If we weren't, we would be totally screwed by these policies. I had enough pump supplies to power me through grad school and until I got real insurance.

I know Obamacare has made it so insurance companies can no longer categorically deny me coverage as a type 1 diabetic (this has happened, over, and over, and over). But this is where I say "more regulation!" You CANNOT consider that real coverage. It's fake coverage. Oh, and I didn't even mention the $100K lifetime cap!

The university system wins it! Second only to Universal

I thought that teachers had good health coverage. That was until I looked into how good professors have it. The University of Michigan health coverage for faculty is crazy good, and even better if you have type 1 diabetes. They have a diabetes program that eliminates copayments for most of the prescriptions: insulin, syringes, test strips. And other related prescriptions that are not necessary but can help with management, such as Symlin or Glucagon, are on a copayment reduction schedule which means they cost as low as $15 for 3 months' worth.

They even tried out a program to see if eliminating ALL copays for diabetes-related stuff (Dr visits, Rxs) would encourage type 2 diabetics to take better care of themselves. It didn't. That was a year before I got on UMPC.

However, it is hugely bureaucratic. Partly because it has to be in order to cut down on fraud or unnecessary services, and mostly because it's managing so many moving parts.

Let me illustrate: There is something called "Coordination of Benefits." Sounds nice, right? No, it's not. It's more of a racket among insurance companies to make sure that nobody has to pay for something that another insurance company has paid for (OK, fine, it's mostly to protect insurers from fraud, but also kind of a racket.) I recently learned about this when I tried to lie, cheat, and steal my way to the new Dexcom G4 system, which is leaps and bounds better than the old SEVEN Plus system. Twice the range! 30% more accurate! Who wouldn't want that?

Well, when they go the request from my doctor, they actually called the manufacturer and demanded my records (wait, I thought that was against HIPPA). When they found out that my current CGM (Continuous Glucose Monitor) is still under warranty for another two months, they denied my claim. Oh well. Guess I'll just have to wait the 2 months.

BUT, my larger point here is that in the universal system THIS DOESN'T HAPPEN. There's no such thing as coordination of benefits. It's all already coordinated. I'm not saying universal coverage is without fault, but image, just imagine, a system that cuts out all that waste and extra manpower and paperwork?!?!? It would be so efficient.

Sigh.

We are insurance. We do what we want.

What kills me about the entire insurance industry is that THEY were the ones who decided to get into the business. They bet we won't get sick, we bet that we will get sick, and thus we have this incredibly convoluted and opaque industry where they make tons of money, America has never been sicker, and a diabetic can't get a break.

So, when their bet goes awry, instead of taking it like a champ, and saying, "oh, blistering barnacles, we were wrong, here's your coverage, old chap," they try to weasel, lie, cheat, steal and red tape their way out of paying.

It's so disgusting.

The latest ickiness is UMPremierCare: a representative from Dexcom (manufacturer of continuous glucose monitoring systems) told me that PremierCare has the strictest policies on obtaining medical devices. Mind you, they have NEVER paid for a CGM for me. The last one I got was last July when I was still on CareFirst. They make Dexcom send them warranty reports and serial numbers for any previous CGM, whether or not it was covered by UMPremierCare or not. Let me illustrate this for you:

Jane is on CrappyOptOut Plus through her job. She quits the job, and takes another job. Her new insurance is LeastBadOptionCare. When she goes to order a new CGM, LeastBadOptionCare first checks with the CGM manufacturer to see if SOMEONE ELSE has ever paid for a CGM that is still under warranty. They find that CrappyOptOut Plus had paid for a previous system, so they deny her a new one. 

This especially sucks when one's CGM has been lost in a field, and one's blood sugars have not been under such tight control ever since.

I'm sorry, our company doesn't care about how this policy will affect you

Today my diabetes supply company told me that they wouldn't be able to send me my sensors, unless I was willing to pay outright for them.

Read: No more continuous blood sugar monitoring for you, missy, unless you are willing to shell out some $1500!

Some background information: My sensors are for my continuous glucose monitoring system; an amazing innovation that allows me to track my blood sugars every five minutes, and gives me important information about trends and fluctuations in sugar levels. In short, I have come to rely on it, along with countless other type 1 diabetics, and going off of it would be like going back to the days of bloodletting as an acceptable medical practice (okay, extremem analogy, but I feel REALLY STRONGLY about this).

So, back to the conversation with the person from Edgepark Medical Services, a diabetes supply company that has always been really great to me.

Her: "Edgepark no longer works with your insurance."

Me: "WHAT?!? I find it hard to believe that EdgePark would stop working with BlueCross BlueShield."

Her: "Edgepark no longer can service certain areas."

She went on to the explain that they would be happy to ship the supplies at full cost of $1,554 for the 3 months' worth of sensors, just one of the many prescriptions I rely on.

I tried digging deeper, only to find that she didn't know much else beyond that "the computer wouldn't let her" ship an order to my area. She revealed that the company no longer contracts with BlueCross BlueShield in Michigan, Arkansas, or Washington State. "They won't allow supplies to be shipped to those places," she said.

So what do Michigan, Arkansas and Washington State have in common? I'm not really sure yet. Having just finished 1Q84 by Murakami, I'm in a conspiracy frame of mind. Here's what I know:

Michigan is pushing through legislation to have BCBS play by the same rules as other insurance companies. Apparently, Michigan struck a deal with BCBS (pre-Affordable Care Act) that it would get out of paying taxes in exchange for covering everyone, regardless of health status. Now that all insurers will have to abide by those rules anyway, come Jan. 1, 2014, the Michigan legislature is pulling BCBS's special treatment away. Read the AP story. BCBS is poised to pay $100 million annually in new taxes, according to AP.

I couldn't really find much bad news for Arkansas, but there is something interesting. Arkansas seems to have struck a deal with BCBS to implement a program to make medical treatment more efficient.

"The cost-sharing program, which started [the week of October 5] and involves Medicaid and some of the state's largest private insurers, will determine if a provider reaches quality and cost targets based on historical models." (From MedPageToday) Apparently, doctors are being rewarded for staying within certain cost ranges (based on historical ranges) and denies reimbursements to those who exceed historical costs. (See my previous post about how rationing is inevitable whether or not we are operating in a private or public system.) It's possible that under this system, BCBS found that Edgepark's rates didn't fall within those parameters. (If that's the case, tsk-tsk, Edgepark. $1554 for 12 sensors???? They are plastic and a small strip of metal. It really can't be THAT much.)

Washington State... This seems to be a bigger question mark. Washington, Oregon, and other regional BCBS seems to have consolidated more than a decade ago to become Regence BlueCross BlueShield. Why would EdgePark discontinue working with Washington, but not Oregon and the entirety of Regence BCBS, which had been recently chided for dropping its lowest rate plan for individual coverage, while slimming what is covered in its plans and simultaneously raising premiums.So many questions are sparked by this phone call to Edgepark. I guess they didn't realize they were speaking to such an inquisitive person, otherwise she would not have disclosed so much. She did mention that they were trying to "work out a solution."I have tweeted Edgepark for some answers, as well as having inquired about the press contact for HGI Holdings, which is the company of Edgepark. We shall see...

*UPDATE: My friend/lawyer/former roommate Jonathan informs me that this is likely due to contract disputes. Thanks, J, for bringing down my whole conspiracy with mere logic! Still, my point stands: Insurance company policy changes may just be a blip in the screen for them, a hiccup in the flow of money. But for someone like me, it's a huge disruption in my life.

Rationed care: what it means for your weekend

January 1st represents a very hopeful day for me: it is the first day of my spankin' new, monstrosity of an institution, veritably good quality health coverage. Universities are renown for providing top-notch coverage for their staff, and I have the good fortune to latch onto Josh's care come January (yay, domestic partnership!).

Here are some things I have to look forward to:

• No lifetime maximum (Harvard Pilgrim plan through Brandeis--for grad students--had $100K lifetime max)
• Mental health benefits
• Low copays for doctor visits
• huge network of providers

Basically, all of the things one should expect from a reputable health plan; many people enjoy these norms. This plan, up until last year, was playing with offering diabetes care with no copays in order to encourage diabetics to more aggressively manage their illness. However, apparently the program had little effect and it died. Boohoo for me -- I would have gone on an insulin frenzy under this program. 

It's amazing to me that people are so protective over their private insurance and balk at the idea of a large-scale national health plan. In my experience, the more members the plan has, the higher quality it is. Say what you will about bureaucracy, I just plain trust the intent behind nationalized care. It's not about taking care away from you; it's about making sure that nobody is overly burdened with medical bills. Take Israel's program: They have a single payer--the government, paid by, yes, higher taxes--and have private companies (four of them) offer different plans that citizens can elect. Above and beyond the basic, paid-for-by-your-taxes plan, you can elect all kinds of other benefits that you have to pay for. But if you are on the basic plan, you cannot pay more than a certain amount of your own money per month (when I was there it was about $250). Once you hit that max, you do not pay anything over that. 

Is the care rationalized? Well, let's call it "medically necessary." Guess what? It's the exact same deal in private insurance. My continuous glucose monitoring system had to be deemed medically necessary before it was paid for by my private insurance plan. Same with my insulin pump. Furthermore, I found that MassHealth (shout out, M. Romney for pushing through that beautiful plan that is a model for the nation), everything seemed to be much more efficient, from my automated supply deliveries to cooperation among my various doctors. 

It shouldn't surprise any of you that I have been closely watching the continuing discussion over the Affordable Care Act (a.k.a Obamacare).  And I can't say that I am surprised that opposition to the plan remains a Republican talking point (even though it was a Republican idea in the first place).  But I do find it really ironic that the biggest point of discussion about the plan is the continued myth that the law invents so-called "death panels", namely committees of bureaucrats that would decide whether individuals can receive medical care.

Let's discuss this idea and what is really going on.

According to a hot-off-the-presses study, 46% of Americans think that the plan includes this kind of committee and less than 17% of Americans are confident that such a provision is not in the plan.

There is no such thing as unrationed care.  The costs of healthcare are simply too high for everyone to get coverage.  There has been ample evidence of this. And does anyone really think that we can pay for ALL of the care that everyone thinks they need? My dear father, the sweet old hypochondriac, is getting rationed care when his doctor tells him that, no, he doesn't have small pox and will not do a test for it. Perhaps we should all wean ourselves off of WebMD and actually listen to our doctors.

Perhaps the most shocking bit of the debate on Monday was the mention of death panels. Again. Didn't that idea die when somebody actually read the Affordable Care Act? (Have Republicans even read it yet?) Most unsustainable healthcare system ever.