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Report: Insurance Coverage Gap May Impact 5 Million People in 2014

About 5 million people are expected to fall into a “coverage gap” next year in states that are not planning to expand Medicaid under the Affordable Care Act, according to a recent analysis from the Kaiser Family Foundation (http://bit.ly/1gqTaOA).

The coverage gap exists for individuals whose incomes will be above the current Medicaid eligibility in their state but below the lower limit for premium tax credits through the health insurance exchanges. The tax credit bottom limits are 100 percent of the federal poverty level in states not expanding Medicaid and 138 percent of the federal poverty level in states that are expanding.

The report indicates that 20 percent of people in the coverage gap will be from Texas, which has both a large uninsured population and very limited Medicaid eligibility. Another 15 percent will come from Florida. As of Oct. 22, 25 states have decided to not move forward with Medicaid expansion. The remaining states, as well as Washington, D.C., are expanding their Medicaid coverage to include people earning up to 138 percent of the federal poverty level.

The Affordable Care Act initially required states to accept the Medicaid expansion or be penalized by losing existing Medicaid funds, but that provision was deemed unconstitutional by the Supreme Court in June of 2012. This essentially allowed states to opt-out of the expansion.

The federal government is proposing to fully pay for expansion through 2016 and then gradually scale back its share to 90 percent. But in states that have rejected expansion so far, leaders have cited concerns over federal funding being reduced, which would increase the financial burden on the states.

Even in states not expanding Medicaid, program enrollment is expected to increase next year, according to a separate Kaiser report (http://bit.ly/15PcIp5). Additionally, state-level Medicaid spending in states not expanding coverage is actually expected to increase more than in the states that are expanding coverage. The report noted that this may be because the states that are expanding could save money as new federal dollars replace state dollars.

 

Change in the Air for Collection Agencies, Providers Due to Health Care Law

Collection companies and health care providers alike are adapting to provisions of the Affordable Care Act that have been implemented this year—and more changes are coming in 2014. One of the biggest changes this year was the launch of the health insurance exchanges in October. Next year, the individual mandate will kick in, which will require most Americans to have health insurance or face a penalty. And section 501(r), which sets forth requirements under the Internal Revenue Code for hospitals to maintain tax exempt status, continues to evolve.

Roberta Schultz, director of operations for ProSource Billing and Insurance, which is part of the Array Services Group in Sartell, Minn., said this atmosphere of change is causing collection agencies and providers to take a wait-and-see approach.

“I feel that everyone wants to see what others are doing and assuring they’re not missing anything,” Schultz said. Chad Lemke, chief operating at Array Services, said he agreed with Schultz that many in the industry are taking a wait-and-see approach. He added that most of his company’s health care clients “believe there will be adjustments” as the Affordable Care Act continues to be implemented.

The health care law has already seen several major changes since it was passed in 2010. In 2012, the Supreme Court upheld the law as a whole, but struck down a provision that would have required states to expand their Medicaid programs. This essentially allowed states to opt-out of the expansion, and as of Oct. 22, 25 states have done so.

Earlier this year, implementation of the employer mandate (which will require businesses with 50 or more full-time workers to provide health insurance to employees) was pushed back from 2014 to 2015. Opponents of the Affordable Care Act have argued that implementation of the individual mandate should also be delayed one year.

Regardless of any potential tweaks to the law, many expect high-deductible insurance plans to continue to increase in popularity as the Affordable Care Act is fully implemented. Chris Becraft, president of Collection Service Bureau Inc. in Phoenix, said people purchasing health insurance for the first time are likely to purchase bronze-level plans through the exchanges. These plans have lower premiums and higher deductibles than other available plans.

“What we will see is a shift from uninsured to underinsured because everyone who will be enrolling for insurance will choose the lowest premiums and the highest deductible plans,” Becraft said. “These folks will not understand what they have gotten into and will not be ready to pay these deductibles and coinsurance when due.”

In August, Kaiser Health News reported (http://bit.ly/19RK3ND) that providers are already seeing an increase in bad debt due to consumers choosing high-deductible plans. “It’s going to be a shock to consumers,” Becraft said of the high deductibles.

Dallas S. Bunton Sr., CEO and chairman of North American Credit Services Inc. in Chattanooga, Tenn.,said clients have expressed concerns over “balance after insurance” issues due to higher deductibles and co-pays. “There will be much more money moved into the ‘self-pay’ status,” Bunton said. “Our clients are concerned with what we intend to do to capture appropriate data, and our strategy to make effective recoveries as quickly as possible after the date of service.”

Bunton said training and compliance are at the front of his agenda as these changes continue to take effect. “I want our staff to be understanding and ready,” he said.

Health Care Prices Continue to Grow Slowly

U.S. health care prices continue to grow at a low rate, according to a recent report from the Altarum Institute. Prices grew 1.1 percent in July 2013 relative to July 2012. That was the same rate as June 2013 and only a tenth of a percent above the May 2013 rate, which was the lowest in Altarum’s data series going back to January 1990.

The 12-month moving average of 1.6 percent is a new low in Altarum’s data series. Additionally, health spending growth averaged 4.1 percent for the first half of 2013, barely above the record low levels seen annually since 2009.

Lower hospital price growth (1.7 percent year-over-year), a 0.3 percent price growth for physicians, historically low growth for prescription drugs (-0.1 percent), and continued low readings for all other categories except for dental care (3.9 percent increase) contributed to the overall low growth rates.

The report indicates that weak economic growth will continue to exert downward pressure on medical prices. “We see very little likelihood of significantly higher health care prices in the near term,” the study’s authors wrote.

The full report is available at http://bit.ly/186zhCJ.

Hospital Mergers Could Squeeze Collection Agencies

Hospitals across the nation are merging at a rapid pace these days—a trend that will impact the health care collections industry in numerous ways. Mergers are occurring at the fastest rate since the 1990s, the New York Times reported in a recent article (http://nyti.ms/16S1nqe). Various factors are driving the trend, including implementation of many parts of the Affordable Care Act over the next two years.

In particular, hospitals find themselves being paid less on volume under the health care law and more on the quality of care they provide, the Times noted. That means there is less of an incentive to keep beds full, and more incentive to keep patients healthy and out of the hospital. This encourages providers to merge, reduce overhead costs, and focus instead on implementing expensive electronic medical records systems that allow them to more effectively track and evaluate patients.

Consulting firm Booz & Company predicts that 1,000 of the nation’s roughly 5,000 hospitals could seek out mergers in the next five to seven years, according to the Times. ACA International member Chris Becraft—who is president of Collection Service Bureau, Inc. in Phoenix, which specializes in health care receivables management—said the industry is going through its “biggest roll-up ever.”

“Large systems are needing to either grow organically, through opening up new facilities or services, or purchase others,” he said. “Independent facilities are unable to make a profit with the current state of government reimbursement so they either need to merge or go out of business. The independent regional hospitals are an endangered species and I predict there will be very few left in five to seven years.”

Becraft added that he sees some problems for collection agencies as a result of these mergers. “What this means is there are fewer clients for collection agencies to do business with today and there will be far fewer in the future,” he said. “There is very little hope for the smaller agency to remain viable exclusively in health care unless they are content with the ever-shrinking margin and market they will be getting from small providers.”

Becraft said the mergers topic is frequently discussed among staff at his agency. “It’s a very big topic with staff,” he said. “When a change happens, that is when we can either gain business or lose it. More agencies will be losing business because of this than gaining, I can guarantee you that. We intend to be on the gaining side and are growing aggressively to be able to continue servicing these larger providers.”

Becraft added that it’s not just hospitals that are merging—many collection agencies are merging as well, in an effort to stay viable in the health care collections field.

“Larger health care providers will eventually only want to do business with other large entities because that is what will make sense to them,” he said. “The future of high volume health care RCM will be the exclusive domain of large companies because that is all that will exist eventually in both industries.”

Mnet Financial Welcomes Rick Juretic


Aliso Viejo, California (September 16, 2013)-Mnet Financial, the leader in receivable management solutions for the field of health care, has announced ABC Amega former Vice President of Sales, Rick Juretic, as its Midwest Regional Vice President of Sales. With more than 17 years of operational and business development experience, a majority of which was spent in the financial services industry; Juretic will lead the company’s Midwest Region in its strategic and day-to-day efforts.

Prior to Mnet Financial, Juretic spent nearly three years overseeing Sales and Business Development for ABC Amega as the company’s Vice President of Sales in the Central Region, where he was responsible for developing opportunities for revenue generation through sales channels within the Central Region of the United States. While there, he played a critical role in the success of numerous ventures and was instrumental in the engineering and implementation of various contracts.

“We are very delighted and enthusiastic in welcoming Rick Juretic to our team here at Mnet Financial,” said David Hamilton, company founder and CEO. “Mr. Juretic’s strong receivables knowledge and payment technologies background will be very beneficial to Mnet Financial. This will be especially valuable as the health care world moves toward a more patient centered experience” said Hamilton. “The combination of Juretic’s wealth of natural talent and ability along with his elevated level of experience will be extremely useful for Mnet Financial as well as its clients” added Hamilton.

Prior to his work with ABC Amega, Juretic served as Vice President of Collections at TransUnion and also as a Sr. Director with Capital One. He also gained additional experience with CBC companies, Arrow Financial Services, and United States Cellular.

Employer-Provided Medical Care Availability Varies

Employer-provided medical care was available to 85 percent of full-time private industry workers in the U.S., according to the U.S. Bureau of Labor Statistics’ latest data. By contrast, only 24 percent of part-time workers had medical care benefits available. The data comes from the National Compensation Survey, which was released on July 17 and analyzed March data.

Availability also varied by employment size: 57 percent for all workers in small businesses (those with fewer than 100 employees), compared with 85 percent in medium and large establishments (those with 100 employees or more).

Additional findings include:

• In private industry, 64 percent of employees had access to retirement benefits, significantly less than the 89 percent of state and local government employees with access. Additionally, only 49 percent of private industry employees actually participated in a retirement plan (had current coverage), significantly less than the 85 percent participation rate of state and local government employees.

• Full-time workers in state and local government had greater access to employer-provided benefits than private industry workers. For example, retirement and medical care benefits were offered to 99 percent of full-time state and local government workers while only 74 percent of full-time employees in private industry had access to retirement benefits and 85 percent to medical care coverage.

• For private industry employees in the lowest 10 percent of average earnings, employers paid 71 percent of the single coverage medical plan premium. For employees in the highest 10 percent of average earnings, the employer share of the premium was 81 percent. For family coverage, the employer share of the premium was 56 percent for employees in the lowest 10 percent of earnings, significantly less than the 73 percent for employees in the highest 10 percent of earnings. The full survey is available at http://1.usa.gov/2lX9qW.

CMS Charge-Comparison Data Might Confuse Consumers

Hospital charge-comparison data released in May by the Centers for Medicare and Medicaid Services might end up confusing consumers more than it helps them, according to a recent analysis.

An article posted July 10 in the Journal of the American Medical Association states: “In releasing its data on hospital prices and charges, the US Department of Health and Human Services (HHS) suggests such information will assist consumers and patients in making better, economically informed choices when deciding on where to go for health care. But some observers are skeptical that the data are detailed enough to truly benefit individuals shopping for care.”

The data released May 8 by the CMS showed the average hospital charges for the 100 most common Medicare claims. It also showed wide variations in cost for the same services—even within one geographic area.

“Currently, consumers don’t know what a hospital is charging them or their insurance company for a given procedure, like a knee replacement, or how much of a price difference there is at different hospitals, even within the same city,” Health and Human Services Secretary Kathleen Sebelius said at the time. “This data and new data centers will help fill that gap.”

But the July 10 JAMA article claims that the numbers “barely tell the story surrounding charges and payments.” For one, hospitals may charge more because they must also pay for residency training or because the patients they treat are not as healthy as those at another facility.

The data also doesn’t help consumers trying to figure out their costs beyond what their insurance pays. Several medical professionals told the JAMA that a look at actual out-of-pocket costs would be more useful than the charge-comparison data.

“This won’t be particularly important to the public,” said Caroline Steinberg, vice president of trends analysis for the American Hospital Association. “Charge data is not really what people pay, so it doesn’t give consumers any information on cost differences or what their payment obligations will be.” View the full JAMA article at http://bit.ly/1dseLzx.

Health Care Prices Increase at Historically Low Rate

Health care prices in May were 1 percent higher than they were a year ago—the smallest increase in nearly a quarter of a century, according to a recent report. The 12-month moving average of 1.7 percent was also the lowest since September 1998. The data comes from a report issued by the Altarum Institute on July 12, available at http://bit.ly/155SuVe.

“Although July marks the beginning of the fifth year of the expansion following the Great Recession, weak growth continues to exert downward pressure on overall prices, and dramatically so for health care prices,” the report states. “In this environment, health care prices cannot be expected to rise significantly in the near term.”

Dental care (3.6 percent) and hospitals (1.8 percent) showed the largest growth, while home health care and prescription drugs showed declines of 0.2 percent and 0.1 percent, respectively. “Health care price inflation in May 2013, at 1.0 percent year-over-year, is growing at a historically low rate,” the report states. “While ’all-time low’ may be too strong, given that our data extend back only to January 1990, it’s difficult to imagine a lower rate in the last 70 years.”

Health care costs are expected to continue to grow slowly in 2014, according to a separate report from PricewaterhouseCoopers’ Health Research Institute (HRI), titled “Medical Cost Trend: Behind the Numbers” and available at http://pwc.to/LG1YM7.

“Health care cost increases continue to exceed overall growth in wages, but the gap appears to be shrinking,” said Michael Thompson, principal with PwC’s human resource services practice.

How to Approach a Commercial Insurance Appeal or Grievance

Sometimes we work with or are seen by doctors who are not contracted with our insurance company. The decision to be non-contracted or non-participating is a freedom of choice decision that the provider makes. No one can force us to do anything, so an insurance company cannot force a doctor to become contracted with them. Sometimes the doctor may have been contracted but that contract was terminated. It could be because the insurance company wouldn’t pay the doctor’s claims; it could be that the payments made by the insurance company were less than the amount that the insurance company agreed to pay. It could be because the insurance company made many unreasonable refund demands. The number of reasons can be as many as stars in the sky, but, no matter why, the doctor terminated the contract and now the doctor is not contracted.

Some insurance companies have benefit plans that allows a patient to seek medical care from non-contracted, non-participating or out of network providers. There may be no requirement to obtain authorization to do this. There is a cost for doing so. The cost may be higher out of pocket expenses to be paid by the patient. This may be in the form of higher co-pays, or coinsurance. This may also be in the form of lesser claim payment amounts by the insurance company.

As an example, Mr. Steve goes to see Dr. X, who is contracted with Steve’s insurance company. The insurance company may pay $100 on a $120 claim. If Steve goes to see Dr. Y, his insurance company may pay $50 on a $120 claim. Mr. Steve has to pay the $70 balance due to Dr. Y as a result of going out of network. The secret to working with non-par providers is to know how much the insurance company is required to pay the non-par provider. Where is the answer to this secret? It’s in THE BENEFIT MANUAL.

Mr. Steve goes to his local emergency room for emergency care. The bill is $350. The claim is sent to Mr. Steve’s insurance company. The doctor who treated Mr. Steve is non-participating with his insurance. The claim is paid the amount of $13.68 with the explanation that the doctor is non-par and the discount is a cost savings to the member. The EOB also says per Florida Statute 641.3154, the doctor is prohibited from balance billing Steve. Basically what Steve’s insurance is saying is that the doctor must write off the difference between his $350 charge and the $13.68 payment. If the doctor doesn’t do anything, this could happen again and again; so now is show time!

Did the insurance company pay what they were supposed to pay? The doctor is entitled to be paid his fee of $350. Normally a patient pays any amounts that their insurance company didn’t pay. There have been class action lawsuits regarding this problem and the insurance companies have settled out of court. Now, we want to find our PROOF! We look in the benefit manual. The following is taken from an insurance company benefit manual regarding emergency care:

As you can clearly see, the emergency room care was supposed to be paid at 100% of the allowable charge. Look at the EOB to see what they allowed. For all we know, their allowed charge is $13.68 and by paying $13.68, they paid the claim correctly, so we don’t have an appeal. I personally like to create a spreadsheet on insurance companies that I bill. The spreadsheet will include the CPT codes that my doctor bills. It will contain my doctor’s charge for that CPT code. I add the allowed amount from the EOB for that CPT code. I may see a pattern where X Insurance allows $13.68 for CPT 99283 or 99203. I may see a different pattern, where X insurance paid $13.68, $75, $250 or $350 for 99203. This proof is what I use to show that Insurance X has no established allowed amount that they say they have.

I then use the highest allowed amount as my proof in my appeal. If they paid my claims at 100% of billed charges, then this is my evidence and my proof. I have the EOBs scanned. I can cleanse the EOB for other patients so I don’t violate HIPAA privacy laws.

I once walked into a meeting with an insurance company with 1,000 EOBs all showing payment at 100% of billed charges to fight the $13.68 payment and their stand that $13.68 is all they pay for 99203. They wanted to stand behind their $13.68 but their smug smiles disappeared when asked, how much they paid on this claim? 100%. How much on this claim? 100%. This went on, and on, and on. After so many EOBs, showing 100% payment, the look of defeat became visible on their faces simply because my Kung Fu was stronger than theirs.

I also provided additional proof, from their own BENEFIT MANUAL; that 100% was what they were supposed to pay. After we received our check for the balance we were due, their $13.68 payment became history. With strong proof; I don’t care if the amount owed is $1. It’s the principal that matters. If my doctor treats 25,000 patients per year and this is $1 per patient that adds up to $25,000 that I’m fighting to win. If the Doctor was supposed to be paid at 100% and he wasn’t paid $249 of the bill, that’s $6,225,000 that has been lost. It is worth it to go after such an amount of money. That can pay my salary for more than 20 years with some very nice Christmas bonuses!

Independent Private Practice Worth the Price for Some Doctors

For some private practice physicians, the struggles that are typical to small business owners are worthwhile because of the autonomy that can be found in an independent practice. But the life of a private practice physician is much more complicated than the perception of many-a Doctor who sits in an office each day, waiting to take care of patients as they come to the practice for treatment. The reality of the solo physician is often not the laid back experience that they might have once envisioned.

Some private practices find that they run month to month from a financial standpoint. Any updates to their office, such as new furniture, carpeting, or equipment, must be viewed as an investment in the practice, and can only happen when finances allow. Some private practice doctors find that they earn less money than physicians who have been employed by a larger health care organization; and without the benefit of paid time off or matching 401k contributions.

But even still, for many private practice physicians, if given the opportunity to sell their practice; the answer would be an unequivocal “no.” There are numerous physicians who find themselves in this same situation; finding new challenges that must be met each day while operating in a business climate that is not likely to improve much in the foreseeable future. Yet they still choose to work for themselves, even though many of their peers have decided that the sacrifices necessary for an independent practice are not worth it for them.

Surveys have found that some physician owned practices are forecasting negative profitability during the foreseeable future. Coupled with that is a decline in payment and government mandated changes such as the implementation of Obamacare; issues that are of concern to the entire health care world. But even with such concerns, these same surveys point out that more than 60% of the physician owned practices would not even consider selling their practices.

A key trait found in most private practice physicians appears to be a strong entrepreneurial spirit. Those who choose to go this route are comfortable in ‘wearing many hats,’ which is important since they will be forced to have a working knowledge of regulatory and legal requirements as they serve their respective communities. Still, not all doctors find that they are cut out for the life of a private practitioner.

“You really need to complete a personal cost/benefit analysis when considering whether running a business is right for you” said David Hamilton, CEO of Mnet Financial. “I think you would need to ask yourself if you can find the right work/life balance. Running a business can be a very rewarding and creative experience but a successful personal life is also very important” said Hamilton.

The trend of physicians selling off their practices has apparently changed and the acquisition of private practices has slowed in recent years. Some physicians are now returning to private practice after their contract of employment has come to an end. The trend now seems to be that if a doctor would like to choose the life of a private practitioner, they certainly can.

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