In the prior post in this series, I dove into detail of the bill I got from a doctor visit. The doctor was wonderful. On the other hand, the billing amounts to a deep well of opportunity for innovation, innovation of the kind that doesn't involve blockchain, machine learning, AI or even Big Data! Merely the kind of innovation that reduces costs and makes things better for everyone. That's all.
In this post, we get to dive into a treacherous bay in the sea of healthcare billing the likes of which can be found nowhere else.
The doctor visit bill
Again, here’s the bill I got for a visit with the doctor:
The bill I got for the MRI was pretty discrete about the fact that an insurance company was involved. Here's what they said:
That's all. It flies by so fast, even assuming you read it, most people won't notice that according to the bill (I'm not sure I believe it), they were paid just weeks after the service was rendered. No talk about what was billed, who was billed and what they paid. I'm just a patient, I have no "need to know." What I do need to know is that I owe them $85, and I'd better pay up.
But this is billing for a doctor visit. Different department. Different software. Different bills. Different payment mechanisms. This bill makes clear that the insurance company is a major player here. Here's the first part:
Unlike the MRI bill, this bill tries to tell who was billed how much and for what. Who was billed? "BCBS OUT OF STATE." My insurance company is Anthem. Yes, I know the industry lingo that BCBS means Blue Cross Blue Shield, but the name of the insurer is Anthem. Sorry.
What was the bill for? This:
Remember, we're dealing with a HUGE IT department here, stuffed to the gills with experienced professionals. But I guess that looking at the bills and making sure they make sense is low on the priority list. Do you know what a "comple" is? Because I spend WAY too much time on this stuff, I do know what it means. It's truncated from "complexity."
This is our first glimmer of a fierce, take-no-prisoners war that's actually going on beneath the surface of these innocuous-seeming bills. What presents itself as a bill is in reality a communique from a war zone. The "high complexity," which is a translation of the ICD-10 code that Northwell put in their claim that they sent to the "BCBS OUT OF STATE" is their rocket launched over the trenches to the Anthem side to try to get Anthem to pay more for the 20 minutes the doctor spent with me telling me what I could have read from the radiology report, if the medical system had stooped to giving me the results of the reading of my images, paid for by me. But those trenches are already dug deep, and aren't going to change because a mild breeze of common sense wafts by.
Because of inserting the code for "high complexity" in the claim, Northwell is trying to get the enemy ... oops, sorry, the honorable insurance company ... to pay 641.00 for that visit.
An inquiring mind may wonder, what exactly does Northwell want, given that they're asking for:
Do they want Euro? Peruvian Peso's? Bitcoin? I suspect they want plain old US Dollars, but unlike any other bill you've ever seen, they can't be bothered to get it right.
(You may wonder why I trouble my pretty little head about such "trivial" issues. Simple. I wrote software for 30 years, and led the effort for credit card billing software that now processes half a billion accounts world-wide. I know software in general and billing software in particular. In the same way that an editor has trouble taking seriously a writer who doesn't bother to spell correctly, and that a conductor has trouble taking a candidate musician seriously who flubs lots of the notes, there is good reason to believe that a software group that lets obvious flaws like these appear on patient bills has far deeper problems, and that the "underground" parts of their software are probably nightmares. Which all the evidence shows that they are.)
Now let's shift to the right column. Here's what we see:
More than 2 months after my visit, Northwell claims that "BLUE SHIELD," not BCBS and not Anthem, paid them 232.89 Ether, or whatever currency they ended up agreeing to. So the response to the HIGHCOMPLE rocket was a grenade that, when it exploded, screamed "I'll pay you 36% of what your rocket demanded. BOOOM!!"
Northwell sadly reports to me how badly they lost the battle (they're used to losing), and cleverly inserts a "OK, we lost. Fine." line item of 358.11.
What the &*()&*() is that about? How did they ever arrive at that amount??!
This leads to our next juicy topic...
Insurance Co-pays
Medical systems have a myriad of ways of putting it. Some of them just say something like they did for the MRI bill: "This is what you owe. Really. Pay it. It's your responsibility." Others, like this branch of Northwell, handle it totally differently. They make a pathetic, flawed attempt to do the standard accounting/billing thing of "This is what you started owing, this is what you paid, and this is what's left. Please pay it." Except you haven't paid for a thing! The insurance company somehow decided to pay 36% of the bill, and then Northwell somehow decided to subtract an "adjustment," magically leaving the nice, round amount of 50.00 Yen, Bitcoin or whatever to be paid.
Just to be helpful, they put a line item in there "Patient Payments 0.00." Duhhh. Like, you haven't billed me, man. This is the first bill you've sent me for this, a mere 3 months after my 20 minute visit. Of course I haven't paid. And it's in bold, no less. I guess I'm supposed to feel guilty? Or perhaps just hurry up and pay (via the doesn't-work online payment website) the 50.00?
This whole thing is a fake, of course. As everyone who's dealt with insurance knows, way back around the time the Pope divided the New World between the Portuguese and the Spanish (which is why they speak sort-of Portuguese in Brazil and sort-of Spanish in the rest of South American), a group of genius-level experts, the kind of people who decide important things so that the world will work as it should, got together and invented the notion of "co-pay."
"Co-pay" is one of those ideas that only true experts, people who see farther and deeper than us mere mortals can see, could come up with. The core idea is to give patients an incentive to care about the cost of their health care. If they have to pay something every time they "consume" health care, they'll exercise caution and not use too much of it! That's co-pay. Sheer genius! Even better, we'll make the co-pay something that they owe to their doctor. Genius again -- it's the doctor who's providing services, so of course it's the doctor who should be paid. Insurance companies are hated enough as it is. By shoving the burden of billing and collecting onto the medical systems, maybe they can see what it feels like to be disliked. And get collectors involved. And see what substantial levels of double-digit payment defaults look like on the financials. It's all a good thing because we're influencing patients to be careful about what medical services they consume, and from whom! I really don't understand how this kind of galactic-level genius can sleep at night, quivering from the excitement and self-regard of being responsible for such a transformative idea.
Now back to reality. Do co-pays "work?" I mean, do they influence patient behavior in the way intended? No, of course not. But now they're deeply dug into the trenches separating the payer and provider armies, and extricating them will take a real act of courage.
In this example, suppose Northwell decided to bill 591 instead of 641. Suppose (humor me here) that BLUE SHIELD paid the same lousy 232.89. Suppose Northwell made the same 358.11 ADJUSTMENT. Net result: Bill paid. PAID IN FULL!!
Now was that really so hard? Of course, there are some awful consequences of this. A truce would have to be called on a major part of the front. There are jobs and important bodies of software at stake here, on both sides of the war. And support people. And collection agencies. What would they do with all their time?
Probably the worst consequence would be patient behavior -- patients would start consuming healthcare services like crazy because there's no 50.00 co-pay! Not. The second people respond with the same amount of serotonin to the phrase "don't worry, this giant needle won't hurt a bit, just a pinch" as they do to the question "what kind of massage oil would you like me to use," we'll know we have a problem. Until then, I think we're OK.
Conclusion
This post was supposed to focus on the insurance aspect of medical billing, using an example bill. The bill I used was a typical, benign example; not the kind of extreme example you'd expect when reading something that dives into a problem. I said nothing about pre-auth, denials, deductibles, insurance company coverage notices, or any of the other all-too-common joys of the medical business. That was the point! The transaction described here, with the on-the-surface messes and below-the-surface nightmares are business-as-usual!! And that's sad, for everyone concerned -- which includes pretty much everyone, except those of us who are looking at a small patch of grass from the side of the grass where the roots are.
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