1. I was diagnosed at UCLA Medical Center with MS and

2. I had brain surgery to relieve my congenital hydrocephalus, again at UCLA.

The symptoms I had with my MS were thought to be related to my hydrocephalus, but alas, it was indeed an MS diagnosis. Needless to say, being 3,000 miles from home, my mother badgered me into moving back to the great state of Tennessee.

I took a job with a large health care conglomerate in East Tennessee. I should have Cadillac health insurance, right? HA!

My company, which employs over 9k people in the area, has the worst health coverage of any plan I’ve ever had. And to add insult to my injury, until recently we owned a health insurance company!

My plan relies heavily on using only our facilities, which for MS, is not so great. My out of pocket deductibles for going to the university hospital are outrageous, even though the care is superior there.

I work in the marketing department so I was privy to some information about our new drug plan. We opened our own pharmacy which means we get my MS drug for half price under 340b pricing. That’s roughly $720 for a month’s supply. Under our insurance coverage, injectible drugs cost employees $150 a month. And the kicker? The comment was made that it only effected 65 people. I corrected them that it effected 66 people.

My great health care company is short sighted. An MS flare can cost 5k for each flare. Without drugs, MS patients can have multiple flares a year. Now I ask you, what’s more practical in the long run? Lowering the drug cost back to $60 a month like it used to be so that even the $8 an hour employee can afford them thereby reducing flares, which reduces costs and may mean that that employee may delay becoming disabled by years and sucking disability insurance dry, or keeping the drug cost at an outrageous $150 a month, meaning most employees have stopped taking their drugs, raising the incidents of flares and collateral effects? Lost wages, lost work production, lost quality of life?

Oh, and we have NO out of pocket maximum on our plan.

My company, a non-profit pillar of the community, cares only about the bottom line. Which was increased when Humana bought the health insurance arm of our company for $245 million this year.

I could take a job with better benefits at a lower pay scale and come out ahead.

It makes me so angry that I can’t get an actual person on the phone to work this out in real time. So, I still call and wait while keeping records of doing so.

A lot more goes into calculating your healthcare expenses than meets the eye. Unfortunately, most insurance companies fail to break the transaction down into simple math and explain how they got to what you owe. Here are the basics of EOB math.

The Basic Math

The key to understanding comes down to identifying four numbers: the provider charges (amount billed from doctor, hospital, etc.), the discount (which is based on the negotiated rate of your individual plan coverage), what insurance paid and patient responsibility. Insurances may call them different things, so we’ll describe those in a little more detail.

The amount the provider sent to your insurance company as their “charge” or “billed amount” should be the largest figure on the EOB. Next, find and subtract the “discount” to arrive at the allowed amount. This is the amount your insurance company and your provider agree is the fair amount to be paid.

Remember some insurance companies give you the full math. They may show you the discount, and then show you the resulting allowed rate, which should be less than or equal to the charged amount. Other companies only display the allowed amount and do not show the network savings or discount.

Patient Responsibility

Now look at the amount your insurance paid. It can be anywhere from $0 to the full allowed amount. Subtract what the insurer paid from the allowed amount. What’s left is the patient responsibility. To double check the math, add together the amount the insurance paid and the patient responsibility, it should equal the allowed amount which is sometimes referred to as the negotiated rate.

What do you owe?

The patient responsibility may NOT be the balance owed to your provider, depending on if the insurance company reflects your payments (including co-pays, pre-payments and any other payments you have submitted). If payments you have previously made (or will make) are NOT reflected on the EOB, you will need to subtract your payments from the patient responsibility amount to figure out the balance owed to the provider.

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We’ve all heard of identity theft, and many of us have had the miserable experience of having a credit card stolen. Medical identity theft is similar and can be just as serious. Though medical identity theft is fairly uncommon (about 250,000 people experienced it in 2005*), it is difficult to repair and typically leaves a trail of falsified information that can plague medical and financial lives for years.

Medical identity theft occurs when someone represents themselves as you for the purpose of receiving medical treatment and incurring the expense for the services in your name. Someone within the healthcare system could also use your medical identity for financial gain. Either way, the effects can potentially impact your finances, your insurance coverage and your health.

Medical records are fairly comprehensive and permanent, so having the wrong medications and procedures listed, as part of your medical history, can be confusing for any provider you encounter in the future. It’s important to protect against medical identity theft and act promptly and aggressively if it occurs.

Know How to Protect Against Medical Identity Theft
The first indication that you’ve been a victim of identity theft is the arrival of unexpected bills, EOBs or collections phone calls. To protect from this happening:

• Do not allow your insurer to use your social security number as all or part of your account ID. Your social security number is the key into your protected identity.
• Service dates are important. Keep a record of the days you went to the doctor and received treatment.
• Evaluate bills and statements from providers. Anything that looks odd, question it. Medical billings are fraught with errors anyway, so reviewing the bill has the added benefit of possibly catching errors that affect your costs.
• Open and read your EOBs. If you think a service date or charge is not representative of care you or a family member received, or you do not recall seeing a provider you are being billed for, call the provider and your insurer to clarify any confusion.

It’s Happened. Now What?

• Call your insurer AND send a letter to the insurance company stating you suspect medical identity theft. Be sure to provide copies of all documentation.
• Request all records related to the claim(s) from your provider. This can be the most challenging part of the process. Some of this will be trial and error to find the source of the fraudulent activity. Once you are relatively certain the claim is fraudulent, inform them by calling AND in writing.
• If the charge involved your credit card, inform your credit card company of the fraudulent charges.
• Contact your local law enforcement. They will direct you to the appropriate authorities. Be aware that identity theft can be a federal offense.
• Document all conversations - insurer, provider and law enforcement. Who you talked to and when. Keep asummary of what was said.
• Any information you share with another party, be sure to keep a copy of everything for yourself.
• Check your credit rating and put a lock on your credit. Many companies provide this service. This can help to alert you when someone is checking on your credit history and assist in tracking the source.
• Follow up your communications with the provider, insurer and credit companies until you have written assurance from all parties that you will not be held liable for claims and associated charges.
• Be vigilant. If it happened once, watch out for more instances.

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Your insurance company paid your provider and you have paid your patient responsibility. So why
are you still receiving a bill? Well, you may have been balance billed. Balance billing occurs when a provider (doctor, hospital, clinic, etc.) bills a patient for the portion the insurance company “writes off” or discounts.

Let’s consider an example: The patient goes to the doctor for a procedure billed at $400. The insurance company has a negotiated rate or “allowed amount,” set through a predetermined contract with the provider, which agrees to a comprehensive payment of $250 for this procedure. The insurance company paid the provider $225, leaving you with a patient responsibility of $25.

A provider has balance billed you when they attempt to recoup some of, or all of the entire “network” discount. The best way to confirm whether or not you have been balance billed is to follow the paper trail.

Things to Remember

• Each health plan has different negotiated rates with providers. This is a result of their contractual agreements, which designate the provider as “in-network.”
• Balance billing, is an illegal act (in most states) and only applies to “in-network” providers. “Out-of-network” providers, those that do not have contracts with your insurance company, are not required to accept the insurance companies “write-off” or discount.
• Document all conversations, with your providers, insurers and law enforcement. Also make sure you keep a copy of the paperwork (bills, EOBs, payments) for your records.

What To Do If You Suspect You Have Been Balance Billed:

Step One: Gather all of the bills, EOBs and payment information associated with the provider and service(s) in question. This will help you to double check the math. See if the amount you are still being billed is representative of the network discount.

Step Two: Contact your insurer. They can help you to confirm the math, plus they will want to know if the provider is balance billing. Oftentimes, insurance companies have specific processes to handle this type of issue. If you are a Medicare beneficiary and Medicare is your primary insurance, call their Balance Billing Hotline at 800-899-7127.

Step Three: Contact your provider. Tell them that you suspect you have been balance billed. They may admit to it readily and make adjustments. If they do not, having already confirmed that you have been balanced billed by you insurer may provide you with the needed leverage to get the bill resolved.

Step Four: Balance billing is illegal in most states and for all Medicare claims. If you are unable to receive any help from your insurer or the provider, you may want to contact the state agency that oversees health and/or insurance. Inform them you suspect medical balance billing has occurred.

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Pre-authorization assures you and your provider that treatment has been deemed “medically necessary”
under the terms of your health plan. Most HMO policies require pre-authorization to receive coverage on non-emergent care outside of standard healthcare provided by your primary care physician. PPO policies may require it for certain procedures or specialist. As the insured, it is your responsibility to understand when pre-authorization is needed. Check your specific policy, if you are unsure.

A pre-authorization, does NOT imply that the insurance company will be covering the entire cost. Your deductible and co-pays will likely still apply. However, without pre-authorization you run the risk of being responsible for a larger portion, if not the entire cost, yourself. If you require a relatively expensive treatment or procedure, and there are any questions about your coverage, it is always better to get pre-authorization before proceeding with care.

When Do I Need Pre–Authorization?

Typically there is something going on with your health that requires additional treatment or services. For example, this may involve being seen by a specialist, surgeon or additional visits to a chiropractor. Any of these instances MAY require pre-authorization. It is critical to understand your specific coverage. The need for pre–authorization is determined by your specific health plan.

Who Will Make The Request?

The provider should submit your information to your insurer and request pre-authorization. While the physician’s office will most likely make the request on your behalf, don’t be afraid to call the insurance company and verify the authorization is complete. If a doctor’s office forgets or lets it fall through the cracks – there is a chance you will be responsible for payment.

If I Need To Make The Request, What Information Should I Include?

Pre-authorization requests generally require substantial background information such as:

• Other less costly and/or less invasive treatments that have already been tried and their duration
• Past history of the health issue including the conditions surrounding its original manifestation
• Physical documentation, such as test results, images (x-rays, MRIs, ultrasounds, photos), etc.
• Other supporting information that solidifies the medical necessity for this visit, service or procedure.

Always check with your specific insurance plan to see what information they require. Remember they are looking to validate “medical necessity.”

The Response

Every insurance company follows their own timeline, but you and the physician should get the response in writing within a couple of weeks. Remember, if your specialist is not in your insurer’s network (out-of-network provider), you may be responsible for a larger portion of the cost than for a specialist who is in-network.

What To Do If You Get Denied?

Denials are common, but they are generally accompanied by a reason for the denial. View the denial as a request for additional information and don’t get discouraged. (See the”“Denied Medical Claim” worksheet of the Field Guide.)

Managing Changes In Treatment
Changes in treatment can be an issue. For example, a treatment regimen for cancer that involves multiple drugs could be disallowed if even one of the drugs is changed and/or considered experimental. If there’s a change from what is initially authorized, be aware that pre-authorization can be revoked. Be sure to get authorization in writing from your insurer for any changes.

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Ignoring your bills is not the safest tactic. Still many medical bills get to the point of collections.
Whether you just received the first bill, or you’re on the verge of being sent to collections, settling medical debt requires planning. However, with a little communication, some inquiry and negotiation, that large medical bill can be well on its way to settlement. These steps will help you mange any large medical debt you incur. Remember, your bill or statement should provide a number to call if you have questions. Find that number - it’s a great place to start.

Step One: Check Your Bill!
Errors, more errors and inflated prices! By now most people are aware that medical bills contain errors.
Unfortunately, you cannot tell if your bill contains errors by looking at the billing summary or statement. Call the provider billing office and ask for an itemized bill, a copy of your medical chart and pharmacy ledger (shows medications you were given while in a facility) to compare the charges. It may sound like a lot of work, but it could save you a lot of money if there are errors.

• Look for repeated charges. Double check to make sure there are no charges resulting from hospital/facility error (such as a repeated x-ray).
• Look for services and supplies charged to you that you did not receive. Many treatments have “usual and customary” charges, but that doesn’t mean that your case required them all.
• Be aware that amounts like $20 for an aspirin may not be errors, rather just the inflated price of healthcare. Still, it never hurts to ask.

Step Two: Negotiate, Especially If You Are Uninsured

Hospitals and facilities want to receive payment for their services quickly, so try negotiating. First, ask the hospital billing office if they will reduce your bill (to the Medicare rate or their lowest negotiated rate), or simply make them an offer you can afford. If you can’t afford to pay the full amount, ask to pay in regular monthly installments. If the hospital/facility is unwilling to negotiate, ask about assistance programs. Most facilities have patient advocates to help individuals qualify for charitable or discounted care, or in some cases, even government assistance. This is a hidden gem that most facilities don’t promote.

Step Three: Consider Your Options

Medical debt is often considered “unsecured” or forgivable. Credit cards are considered “secured.” Financial experts know medical bills can be negotiated down. Credit card debt cannot. Once you make the decision to borrow money to cover medical debt, it is no longer “forgivable.” Be sure that you can repay the borrowed debt, otherwise it may have a more profound impact on your credit rating than medical debt. For that reason, be cautious when placing medical debt on a credit card, prioritize your bills and make sure you fully understand your options for making payments.

Step Four: Get Your Settlement in Writing

Before you make any payments, get the agreement in writing. Have their business office fax, e-mail or mail a signed statement of the agreed upon settlement. A verbal commitment from a phone conversation will be difficult to prove if you are ever asked for more money, so have a copy of all the documents on hand. Once you have the agreement in writing you are ready to pay.

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Something has happened to change the employment relationship with your employer…you’ve
been laid off, hours have been reduced or you’ve just decided to change jobs. So what do you do
about your health insurance coverage? Well you are in luck (kinda)! In 1996, as part of the HIPAA legislation, federal law was instated to cover portability of insurance known as Consolidated Omnibus Budget Reconciliation Act or COBRA. This law requires that employers continue to provide the same health insurance coverage to ex-employees for a specific amount of time, typically 18 months.

What is COBRA?
First, let’s be clear that COBRA is a law – not the insurance itself. This federal law provides you the right to continue your same insurance coverage after a job termination in most every instance except “gross misconduct.”

How does it work?
Upon employment termination, the employer is responsible to notify the health plan administrator within 30 days. Once that occurs, the health plan administrator will contact the ex-employee and provide the paperwork to select your COBRA benefits. The ex-employee will have 45 days to pay the initial premium that will retroactively start the benefits. Basically, that means if your employment ended on July 31 and even though it takes 30 or 60 days for paperwork to catch up with you, the first premium payment will start coverage on August 1.

NOTE: With the paperwork provided by the plan administrator there should be a Certificate of Coverage. Keep up with this document! When you stop the COBRA benefits to begin new health coverage, this will be an important document for you.

Who is eligible? There are three aspects of eligibility:

1. You must work for an employer with at least 20 employees
2. You must be a “Qualified Beneficiary” - which refers to the employee, the spouse of the employee and/or the dependent children of the employee. The same people that were included on the coverage before employment status changed. You can’t elect to add additional people to your plan under COBRA, but you are able to reduce the number of covered individuals. For example, a child may be able to switch to the other parent’s coverage in the interim.
3. There has to be a “Qualifying Event” – which is the event that ended the employment relationship or reduced the number of hours worked below the amount that it is too low to receive benefits.

How does the cost of COBRA compare to traditional benefits?

Remember that you have lost the status of “employee”, so you’re former company is not going to pay the same share of your health coverage. As an “employee” your benefits were a shared cost. Accessing health coverage through COBRA requires that you pay the employee portion of the premium, the employer portion of the premium and typically an administrative fee of 2%. Once you recover from the sticker shock – it’s time to seriously consider if this coverage is for you.

Things to consider.

While the cost may appear to be prohibitive on first glance, the question may be “can you afford NOT to have coverage?” If you have a lapse in your medical coverage, there is a far greater likelihood for future claims to be denied based on a pre-existing condition. It is common for an insurance carrier to look at a period of no coverage as the point in time when an ailment manifested. Do you or a family member have an on-going illness that requires continual medical supervision? Are there children or elderly people being covered by the policy? If you answer yes to any of these questions, this may be the option for you to use, at least for a short period until more permanent benefits take effect.

Note: If you had medical, dental and vision coverage while employed, you may not have to elect this rich a package while using COBRA. Each plan varies, but it may be possible to only pay for medical coverage during this period of transition.

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Comparing health plans can be confusing and time consuming. But knowing what you are looking for
and your personal health priorities can help to make the process simpler. Whether you are purchasing an individual policy or selecting a plan through your employer, assess your expected situation for the
coming year and select accordingly. Here are a few things to pay attention to throughout the selection process:

Understand what kind of organization and coverage you would like to work with. Is it an HMO, PPO, or POS plan?
At the most basic level, this will determine how you manage your provider relationships over the next year.

• HMOs are typically more restrictive and require referrals, but they generally have low out-of-pocket costs.
• PPOs are less restrictive when it comes to provider selection, however they typically have higher initial out-of-pocket costs.
• POS plans provide the largest amount of provider selection, yet typically have higher costs when you choose to go out-of-network.

Look at how the plan is financially structured and decide what is most important to you. Is it your yearly out-of-pocket costs or the deducible and premium amounts?

• Typically a higher deductible translates to a lower monthly premium.
• If the plan has co-insurance (how you and your insurance company split the balance on claims after the discount has been applied). If the co-insurance is 80/20, that means you will be responsible for 20% of the cost; 90/10 = 10%.
• If you frequent the doctor multiple times a month or need surgery – having a lower co-pay with a higher premium may make sense.
• If you rarely visit the doctor – a higher deductible/higher co-pay with a lower premium may create cost savings for you and your family.

Look at the network.

• Is there a wide selection of providers or are the options limited?
• Double-check to see if your most important providers are in-network. For example, you may decide it is important to have your children’s pediatrician or favorite dentist in-network.
• Next, check to see which local and regional hospitals are in-network (if you have multiple options).

See how the pharmacy plans compare.
This can really impact your out-of-pocket expense depending on the number of prescriptions you need.

• Do you take any maintenance medication?
• Some plans have a standard co-payment on drugs. For example, you may have a $20 co-payment unless the drug costs less.
• Other plans have lower co-payments on “preferred” brand name drugs or generics. For example, generics may be $10, preferred brands $20 and others $50.

Always read over the dental, vision and behavioral health coverage.

• There are often limits on this kind of health coverage. Some policies restrict the type and amount of coverage.
• Often supplemental coverage is needed.

Finally, remember there is always a trade-off! If you are looking to pay a lower premium, you can probably expect to have less coverage or a smaller network. If you have a small deductible, you can expect to have a higher monthly premium.

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