The Insurance Intelligencer
9/24/07
UPCOMING ENGAGEMENTS IN THE SEATTLE AREA
This coming week ... Issaquah Library, September 25, 7:00 p.m.
Discover U Seminar, October 17, 6:30 p.m.
**** NEW PODCAST ON MY WEBSITE ****
Do you know a group or organization that needs to hear the I.W. story?
PPO Pitfalls
Or should I say “pratfalls”?
The majority of insured people these days belong to PPO-type organizations. When I ask them what “PPO” means, they say, “It means that I get to go wherever I want for medical treatment.”
These PPOs are often sold on the basis of choice. They are even named with this “enhanced choice” marketing in mind: First Choice, Best Choice, Acme Freedom Insurance.
PPO – what choice do you have?
Not so fast. This type of organization is not so different from any other type of insurance set-up. It involves a group of medical providers who are contracted with the insurer. In other words, these providers have a contractual relationship with the insurance company, which obligates them to accept whatever fee the insurer sets for their services.
Here’s where the choice comes in. In the HMO world, the Primary Care Physician is the gatekeeper—the person in charge of controlling access to services. If you had a persistent bladder infection, and wanted to see a urologist, you had to first sell your request to your Primary Care Physician.
Many years ago, I belonged to an HMO in California, and I encountered just such a situation. After nine months of suffering with a bladder infection, and begging and pleading to be referred to a urologist, I decided to change my tactics (I was already a budding Insurance Warrior). “OK,” I said to the immovable PCP, “How about sending me to a psychiatrist? This infection is driving me crazy.”
He sent me to the psychiatrist, who had no problem sending me to a urologist. Finally, I got the right medication, and the nine-month suffering was over.
In the PPO world, you are allowed to send yourself to a specialist, without going through the Primary Care Physician ... as long as they are within the group that is contracted with the insurer.
Is it as simple as that? Do you simply make an appointment? Not necessarily.
The Pre-Authorization Review
A near-universal feature of PPOs is the “pre-authorization requirement.” Before you go anywhere—in or out of the network—you may be required to request the treatment, and get your pre-authorization. At the HMO, you are required to visit your PCP, and debate with him in person. At least you are arguing with a doctor. With this pre-authorization process, your request drops into the same shadowy no-man’s-land where appeals go.
We recently had a request for out-of-network treatment denied. The next step was a “peer-to-peer” review. Sounds like they find a doctor who is knowledgeable about the treatment—a true peer of your expert—and he renders an opinion on whether your really need it, yes?
The treatment was a chemoembolization procedure, which is performed by a medical oncologist specializing in inoperable liver tumors. The insurance doctor who denied the request was a recently graduated family practice physician, with no experience in oncology. Sort of like the doctor working for the auto insurer, whose job it is to tell you that you didn’t get injured.
If they deny your request, you will have to write an appeal. Sounds like less choice to me, not more choice.
Going out of the network
You have an “out-of network benefit,” yes? This means that you can go to any specialist anywhere, right?
So not so. First, you will have to go through an even more draconian “pre-authorization review.” I guarantee you, if you request an expensive out-of-network treatment, it will be denied every time. Your insurer will state that they are not going to pay because the treatment which you have requested is “experimental,” “investigational,” or “not medically necessary.”
How you overcome these objections is another newsletter. Suffice it to say that the insurer isn’t going to make it easy for you.
Let’s say that, by some miracle, your insurer says, “Sure, we’ll pay for it. Go wherever you want for your treatment.”
Before you go anywhere, you had better count up your total net worth. Your out-of-network benefit is an illusion of choice, all smoke and mirrors. There are staggering financial disincentives, should you need to seek treatment from a doctor who is not contracted with the insurer:
• Higher deductible. Your out-of-network benefit could be subject to a separate deductible, or a deductible that is thousands of dollars higher than the one that applies within the network.
• Higher out-of-pocket. You could be required to pay out thousands more, before the insurer starts to pay.
• Separate cap. Your out-of-network benefit may actually have a cap on it, separate from your lifetime maximum. “Cap” means that that is all they will pay, ever.
• They only pay 50%-70% of charges that they deem “reasonable and customary.”
Let’s say that your cancer surgery plus hospitalization will cost $200,000 (a cheap date, in the world of cancer cures). First, you pay your special out-of-network deductible for tests and office visits relating to the surgery of $1,500. Then, you pay an assortment of co-pays prior to the surgery to the tune of $400.
Finally, when you get through the surgery, your insurer only pays 60%. Not 60% of the $200,000 which was billed, mind you, but 60% of what THE INSURER DEEMS TO BE REASONABLE AND CUSTOMARY, which could be 60% of anything. Just for the sake of argument, let’s say that they decide to pay 60% of $90,000, or $54,000.
Because your out-of-network surgeon is not contracted with the insurer, he is perfectly within his rights to balance-bill you for whatever the insurer doesn’t pay.
You are recovering from your surgery, and you start receiving bills which reach a total of $147,900. Of course, if they have a low cap on the out-of-network thing, you might be paying even more than that.
Some choice, eh?
If you have a PPO, and you need expensive treatment out-of-network, forget that you have any out-of-network benefit at all. Treat the insurer’s offer to pay as a denial, write a blockbuster appeal, and make them pay it all. By that I mean “90% of billed charges, with no patient responsibility.”
Good Insurance Warrior-ing,
Laurie Todd
|