Note: This is documentation of Item 2 in the August 11 posting.
It’s not a health care problem. It’s not an insurance problem. It’s a system problem.
Early morning September 1, 2007, the first day of the month I turned 65 and the day Medicare became my primary health insurance provider, I crashed my bicycle in the nearby IHop parking lot and smashed my face into the parking lot pavement. I went to a primary health care provider and was told I would have to go to the hospital for a scan to see if there were any broken bones in my face.
I took the doctor’s advice and showed up at the hospital a couple of hours later as arranged. Not realizing that particular day was the first day of my Medicare coverage and not having received my Medicare card which I had dutifully applied for three months earlier, I handed the hospital insurance people my old insurance card which had been primary the day before but was now secondary. My mistake. Over the next few hours they checked me out, pronounced me unbroken, and sent me home without even a stitch. The doctor said my upper lip area looked macerated and he didn’t see anyplace to put a stitch.
The bill from the hospital was $3,854.00, probably based on some arcane accounting cost allocation system. To make a long story short, my secondary insurance denied the claim because it should have been filed first with Medicare. Once the hospital filed with Medicare, Medicare paid $356.46, a little less than 10% of the charge, and the Medicare Explanation of Benefits said I might be billed $218.77. That was in December 2007.
Paperwork bogged down, probably because of my original filing mistake, and my secondary insurance was unresponsive for months. In March, 2008, six months after the accident, the hospital sent me a letter saying that my bill had been assigned “to our self pay department” and that I owed $1,271.54. I have no idea where that number came from, but they must have some formula for discounting the asking price in the self pay department process. I didn’t want my credit messed up so I went ahead and paid the $1,271.54 assuming that I could get a refund once the insurance got straightened out. That happened May 28, 2008, when the secondary insurance paid the hospital $218.77, the same amount Medicare had said I might be billed, and I promptly got a refund from the hospital of the $1,271.54.
So, the bottom line is that I received excellent health care at a reasonable cost…at the end of a ridiculous process. The hospital received $356.46 plus $218.77 or a total of $575.23 after billing $3,854.00. That is 15% of the original charge. After Medicare paid, the hospital collected $1,271.54 from me before settling with my secondary insurance for $218.77 and then having to refund my $1,271.54. They let my insurer off the hook for 17% of what they demanded from me. I would have been perfectly happy to have let them charge $575.23, a reasonable charge for services provided, to my credit card on September 1, the day the service was rendered, and skip all the hassle. Wouldn’t that have been much better for everybody than dealing with all the frustration and paperwork and delays? Well maybe not for all the employees of the hospital and Medicare and insurance companies who were making a living processing the paperwork.
It’s not a health care problem. It’s not an insurance problem. It’s a system problem.
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