YOUR MONEY-Beware of pitfalls in high-deductible health plans


By Beth Pinsker

NEW YORK, Nov 26 (Reuters) - Evan Dudik got severe stickershock after his wife broke her ankle last year. Not only did hishigh-deductible medical plan put the family on the hook for thefirst $5,500 in charges, but Dudik also had to sort out a numberof discrepancies in the bills.

All told, the 61-year-old self-employed managementconsultant from Vancouver, Washington, says he was charged$1,300 more than he should have been for an out-of-stateemergency room visit. It was only after a long battle that herecouped that money and other overcharges for follow-up care.

Millions of Americans - roughly 18 percent of workers - arenow in this world of high-deductible plans. With that coverage,patients and their families must pay at least $1,250 per personbefore the insurer takes on any charges, according to benefitconsultant Mercer.

More and more employers are steering workers towardhigh-deductible plans, and they are likely to be the choice of alarge percentage of people shopping on the public insuranceexchanges just launched as part of the U.S. Affordable Care Act.

The idea is that consumers who have to pay for their ownhealthcare will make better decisions and incur lower costs. Butthey also need to become billing experts because they must payso much out of their own pockets.

"These plans are putting people in the driver's seat, butwithout GPS," says Maribeth Shannon, director of the market andpolicy monitor program at the nonprofit California HealthCareFoundation.

To make sure you are paying a fair amount, here are threekey elements to check:


First and foremost, wait before you whip out your checkbook.

"Our guidance is to not pay until you get your explanationof benefits," says Mark Smithson, vice president of providerprocess and services at health insurer Humana Inc.

Insurance companies put every claim through a repricingengine, where they figure out the difference between what theprovider charges and the negotiated discount rate - and that issupposed to happen even if you have not met your deductible.

Yet sometimes people get bills from doctors and pay themwithout thinking about it.

"Consider any bill from a provider as the beginning of anegotiation rather than like a bill from a plumber or Visa,"advises Dudik.

And sometimes the repricing never happens. Pat Palmer,founder of Medical Billing Advocates of America, says she hasseen cases where insurance companies did not bother to put billsthrough repricing, since they were not paying them anyway.

"They take whole amount and apply it to deductible, and theyneglect to put on the explanation of benefits that there is adifferent amount that you should be paying," Palmer says. "Wehave had some insurance companies tell us that 'it costs usmoney to put a claim through repricing, so we just process theclaim.'"

That simply goes against Humana's policy, Smithson says. Hisadvice to customers for avoiding all billing problems: Stayin-network whenever possible, because the insurer has a closerrelationship with those providers and can exert more controlover billing practices.


The definition of "network" is another problem, one JohnCertalic faced after he had heart trouble while on vacation inFlorida earlier this year.

Certalic, a 64-year-old charity manager from New Berlin,Wisconsin, had a plan with a $7,500 deductible from HIRSP, whichoperates the high-risk pool in his state.

However, the hospital he went to was not an includedprovider because it was out of state. When patients go out ofnetwork, insurers usually cover just a very small amount, andthe patient is responsible for the rest. The bills at fullcharge totaled more than $55,000.

Certalic turned to Medical Billing Advocates, whicheventually found a clause in federal Medicaid regulations thatrequired the hospital visit to be covered. The bills werereduced to the insurance company's negotiated rate.

HIRSP processes all claims blindly to look for errors,regardless of the deductible, Chief Executive Officer AmyGoldman says. People who have further disputes can file agrievance or appeal, or have a case reviewed by the stateinsurance commission.

Dudik's insurer, LifeWise of Washington, says it has afinancial accuracy rate of 99.8 percent on claims, but notesthat out-of-network charges like his may get confusing tocustomers. "When a member sees a doctor outside the network, themember is responsible for paying the doctor and then submittinga claim to LifeWise," says spokeswoman Melanie Coon.


Certalic looked mostly at the bottom line, but Dudik duginto the coded language of his bills and noticed what lookedlike a lot of mistakes - duplicate charges, mysterious servicefees, overbilling for nonemergency services and overcharging forcommon equipment.

"One of the most eye-opening mistakes for consumers onhigh-deductible health plans is not checking for the rightservice level," says Katie Vahle, founder of medical billingadvocate CoPatient, which helped Dudik. "We see that all thetime."

CoPatient got the coding changed on some of Dudik's carefrom emergency management to follow-up, which reduced one billfrom more than $2,000 to just above $500.

"You have to look at the bill, and if it's not clear, youhave to ask for explanation," Dudik said. "But don't expect tounderstand it. You have to get somebody who knows how to pushback."

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