Because case managers are seen as experts in the healthcare and insurance industry, our families and friends often ask us to help them make sensible healthcare decisions. The advent of flexible savings accounts means that often, these questions may relate to cost. Employers today are increasingly offering flexible savings account to their employees to help cover out-of-medical pocket costs. This can be particularly useful to people who have chronic diseases, and whose out-of-pocket costs each year can be burdensome. Flexible savings accounts allow consumers to budget and contribute funds tax-free each year to help cover healthcare expenses. The challenge often lies in determining exactly how much to contribute, because if you don’t use it in that calendar year, you may lose it. One method of predicting expenses is to keep detailed records from year to year, but this still leaves the problem of how to anticipate any new costs one may incur in the coming year. In this week’s edition of Across My Desk, I’d like to share a story that occurred within my family which demonstrates how complicated this can be.

In June, my brother emailed me to let me know that during his annual physical, his physician had recommended a colonoscopy (he is 50 years old) and a stress test (due to high blood pressure readings). He wanted to know if I could help him figure out what the cost of these procedures would be so he could decide if he had enough money in his flexible savings account to have the procedure in 2006, or whether it would be better to wait until 2007, when he would have a new account and could fund it appropriately. As it turned out, in the end the question became moot because by the time he’d determined the approximate cost, it was already almost 2007.

In order to better understand what had happened — and the challenges that face all healthcare consumers in such matters — I asked him to send me an email describing the events. Here’s what he wrote:

On July 17, I went to a cardiologist, had the stress-echo test and based on the test, I am now on blood pressure medication.

On July 20, I went to a GI physician for a consultation. The physician checked me over and said to schedule the colonoscopy with his schedulers. The physician said I could have the procedure done at a surgical center or at one of the hospitals in the area; it did not matter to him. I talked to the scheduler who said she would need to verify my insurance. She said she could not do this right away and would call me back.

On August 5, the receptionist from the GI office called back and informed me that the surgical center is out of my insurance network. My out-of-pocket cost to have the procedure done at the surgical center would be $852 — insurance would cover the rest (60 percent, out-of-network coverage). This fee is only for the facility (the physician is in-network; the anesthesiologist’s fees were not included). I have since learned that my out-of-network deductible is $700, none of which has been met in 2006. After the out-of-network deductible is met, the insurance company would pay 60 percent, and I would be obligated for the remaining 40 percent.

Next, I contacted the hospital. As it turns out the hospital is in-network, and my insurance will cover 80 percent of the “contracted rate,” less my in-network deductible of $350. I would owe the balance (20 percent). At the time, my remaining in-network deductible was $247. Per the billing administrator at the hospital, the facility charges for normal colonoscopy procedure include:

• the hospital facility charge of $1,000, not including doctor fees, or other services (i.e. biopsy, anesthesia)
• Operating Room time @ $2,994
• Recovery room charge @ $??
• Anesthesia time charge (i.e. equipment, etc. @??)

(The physician’s and anesthesiologist’s fees are not included.)

On 11/29, I spoke with my insurance company’s customer service department (it is a large, national insurance company) to find out how to determine the unknown costs so that I could make some decisions. The representative suggested getting the procedure code for the colonoscopy procedure from the surgical center, and then the insurance company could provide me with the “usual and customary charges” associated with that code in my area.

On 11/30, I spoke to the surgical center billing department and was told that the billing code was 45378 and that the doctor, facility and anesthesiologist will each charge using this code. I then called my insurance company back and was told by another customer service representative that they do not offer “pre-determination of costs” based on the billing code 45378. In pressing the customer service representative so I could understand the costs, I was told that my insurance company will pay anywhere from $965 - $1,345. Assuming the highest fee charged three times (e.g., for the facility, the doctor and the anesthesiologist), the total should then be $4,035. If this represents the 80 percent the insurance company is responsible for, then I would be responsible for $1,359 (20 percent + $350 deductible).

My brother’s question to me was, “I need to decide how much I will need for my 2007 flexible spending account. Without a pre-determination of the cost for this procedure, I don’t believe I have enough information to make a valid decision. Do you know where I can get any more information on the cost?”

Today, consumers are told and expected to take responsibility for their care and the cost of that care. As you can see from this exercise, the industry does not make this an easy process. WHY?

I think that you will agree that there is no other industry for which you cannot find beforehand the exact cost of a product you’re planning to purchase. In the healthcare industry, we expect consumers (and that includes you and I) to pay whatever we’re told the service or product will cost. When we try to investigate those costs, we can’t get a straight answer. This must change, as today, consumers are increasingly being asked to share in the cost of their healthcare.

This example is provided to show the frustration that consumers experience when they take the time to plan out their budgets. I had no answer for my brother except that he make a “wild guess” on what he should put away in his flexible savings account. This was not the answer he wanted to hear so the only thing left for me to say was that I was sorry for the inadequacies that continue to exist within our healthcare industry and reimbursement systems.

See you next week,

Anne Llewellyn, RN-BC, MS, BHSA, CCM, CRRN
Editor-in-Chief of Across My Desk, Case in Point magazine, and the Case Management Resource Guide
allewellyn@dorlandhealth.com