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Talk about ''confusion''.............

by Mac McMullen / January 16, 2006 4:27 AM PST

I'm Medicare eligible, and carry additional insurance to cover virtually any expense that might occur, including deductibles. I'm fortunate to be in relative good health, and have probably paid more in insurance premiums that I have incurred in medical expenses.

Recently a visit to the doctor to obtain a prescription renewal, nothing else, resulted in a bill from the provider for $62.00.

Upon receipt of an ''explanation of benefits'' sheet, you know, those sheets that state in bold print ''This is not a bill'', I was put to wonder as it indicated that Medicare paid $78.48, and a ''supplemental'' paid $12.40. By my math, this totalled $90.88 paid for a $62.00 bill. H'mm ?

This the opposite of what we normally hear about Medicare, and other insurances, paying less than what providers initially bill.

I took the time to call. Suffering through the myraid of the automated instructions and choices finally talked with a real person. It seems there is something out there called a ''revenue code'' that Medicare pays against, not necessarily the actual invoice. I know nothing about a ''revenue code'', and guess it wouldn't matter if I did. In any event, this was as far into confusion about the situation of the moment as I cared to endure.

So why is it that some doctors refuse to accept Medicare patients ?

I guess I'll never understand how government operates.

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I think because...
by Angeline Booher / January 16, 2006 5:56 AM PST

...... they are paid sums "alllowed by Medicare" Then the Medicare supplemental kicks in their 20% of just what Medicare allowed.

The amounts "allowed" by Medicare, as I understand it, can vary from region to region. Their allowable payments are based on the history of what had been charged for the same procedures and visits over a time period. (At least that's how it was when I filed claims.)

Doctors and other providers that do not "acept assignment" can charge more than what Medicare pays, but it can be no more than 15% of Medicare allowed charges. This "limiting charge" applies only to certain services, and not to supplies or items. The providers can also choose demand payment at time of service. Medicare will then send you what it paid.

My guess is that some do not accept assignment because of the payment for services Medicare allows. And perhaps because claims have to be coded properly when sent, so mistakes can be made. It might be too much of a hassle for them. My experience with Medicare claim problems have arisen from errors made by the filing office, not by Medicare.

Say, a non-Medicare, privately insured person is charged $80 for a visit. A Medicare claim would pay $50, the supplement $10, a short fall of $20.

I can see some specialists, like those who do elective cosmetic surgery, to not accept assignment (and some of those will allow for monthly payments). But, with the aging population, volume alone wouldn't be so bad. Happy

Angeline
Speakeasy Moderator
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What I don't understand....
by Rolway / January 16, 2006 7:18 AM PST

is why the charge for a prescription re-newal? I get them re-newed all the time over the phone. Either by myself or the pharmacy. On occasion the Dr. may set up an appointment for me to come in. He still re-news the prescription, but wants to check me over, do blood work-up, etc.

As far as trying to figure out those charges Del, its useless. Even they can't explain them. Its designed that way so no one person can figure it out. They work on the basis the average person, doctor or lawyer will give up and just pay it. Theres no rhyme nor reason to the whole system. Just chaos and waste and gouging.

Example: How do they justify $7000 for one injection (in the arm, just like a flu shot) of Darbepoetin (Aranesp) Since I get one every week for I don't know how much longer, I questioned this and was tolded, we have shots costing more than that. Don't worry about it, your insurance company is paying it. And, an average 5 day stay in the hospital, excuding the Dr. is $20,000 plus. Don't worry about it your insurance company is paying it. Well, I'm not, till I look at my health insurance premiums and wonder why they mushroom every year.

But still, given the talent and care of some of these resident Doctors and Nurses, I believe they are under paid. Its the Hospitals and Drug companies that need triming along with a more, pay attention government.

George

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Aranesp
by Bill Osler / January 16, 2006 9:54 PM PST

I don't know what dose you are taking, but the medication is quite expensive. According to the source I checked a vial of the medication can cost as much as $1500. Depending on your weight and other details a single dose could be more than one vial. The more important variable, though, is the markup the hematologist applies to the vial.

The price the hematologist charges will be higher than the cost of the medication because of the need to cover expenses like medication storage as well as losses to expired medication, indigent patients, insurance company billing requirements and (probably) some provision for profit.

It turns out that medication markups are a major source of revenue for oncologists.

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Re: Aranesp
by Rolway / January 16, 2006 11:10 PM PST
In reply to: Aranesp

Hi Dr. Bill:...The dose I'm on right now is 500 mcg or as I understand would be 5 Vials. The hospital pharmacy mixes it into one big needle, consequently 1 shot. I have to go over to the hospital and a Nurse in hemotogy injects it. And boy, let me tell you it stings, burns and hurts for those few seconds going in. After that initial agony, theres no after effects.

Don't know how long I'll be on it, but all indications show it to be working very good. At least its stimulated my system to start making Red Blood Cells on its own. Beats getting the Blood transfusions. Right now its once a week. Probably will taper off to every 2 weeks, then 3 weeks etc. once it gets regulated, according to my Doctor.

George

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Coding office visits ...
by Bill Osler / January 16, 2006 10:17 PM PST

Each physician chooses how to manage refills. Some don't charge for refills over the telephone, others do. Some require office visits for all refills, others don't.

Medical board rules can affect this. In our office we will usually do free refills over the telephone if patients have kept scheduled follow-up appointments but we generally require an appointment for a refill if patients have not kept follow-up or if it has been a year since we saw the patient for the relevant problem even for fairly harmless things like allergy medications. That is partly because the NC Medical Board requires that patients 'examine' patients prior to prescribing. That clause has been interpreted in various ways but it is hard to claim I've examined a patient who hasn't darkened the door of the office in over a year.

The coding rules for office visits determine which code to apply based on the amount of information collected, the number of chronic diseases being managed and the extent of decision making required. It turns out that for patients with multiple chronic diseases the visit code can end up corresponding to a fairly large charge even if no changes were made.

I don't have much to do with the business end of the practice right now, but my understanding is that Medicare pays the lesser of the charge submitted and the allowable charge. If your physician submitted a charge less than $62 then Medicare should not have paid more than 80% of $62. However, that simplifies things a bit.

If your physician is a hospital employee working in a 'provider based' practice then the physician probably submitted 2 charges to Medicare. One was a fee related to the 'professional component' of the charge and the other was related to the 'technical component' of the charge. One is reimbursed from Medicare Part A and the other from Medicare Part B. Again, I've simplified a bit but that is more-or-less the way it works. In these cases the whole reimbursement situation becomes so complex that patients frequently get confused about what the charge was and who paid what. Our billing system enters the Part A and Part B charges in separate lines on patient bills with the result that some patients think we are charging Medicare twice for the same service!

As far as the economics are concerned, my practice probably makes a little on Medicare patients, but only because we are 'provider based' so we get the benefit of billing both Part A and Part B as well as other reimbursement from Medicare. Not all practices have that benefit. In fact, for physicians who are not 'provider based' the Medicare allowables are frequently below cost. That, combined with the barriers Medicare intermediaries introduce to delay/minimize payment, is why many private physicians do not want to accept new Medicare patients.

I'm over simplifying a bit here and ignoring some of the mysteries of modern cost accounting, but if the practice expenses average ~70% of gross charges (the actual ratio depends on specialty, overall volume and other factors) and the Medicare allowable is only 50-60% of gross charges (not an unusual situation) then there is at least the appearance of a significant loss on Medicare patients. How that plays out in an analysis of fixed vs variable expenses, marginal net revenue and such is more complex than I want to get into right now.

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Thanks Bill,
by Mac McMullen / January 16, 2006 11:52 PM PST

You probably spent more time in writing your message than I spent in the office visit in question.

It was an "annual" visit with no changes to report or were found. Spent more time at the nurse station undergoing that ritual, ie BP/weight/etc, than I did with the doctor. No change to prescription.

Appreciate the explanation. I had no problem/question with the amount involved, only the "why" payment in excess of invoice/claim. In reality, I don't understand how they can maintain the physical facility and meet payroll on charges like I see.

Add to that the expenses incurred within Medicare and the insurance companies processing the claim, and I really don't understand the business side.

Again, Thanks for the explantion. Still a big grey area, but I guess someone has a handle on it.

Thanks.

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