This ruling puts emergency physicians in a hard spot, but protects consumers. This goes back to the Prime/Kaiser scenario and more can be found under the related reading section here. There is a separate case pending with the California Supreme Court, so the matter is not closed yet by any means, so stay tuned.
Who really suffers from all of this are the smaller practices and hospitals to a degree and it comes back around to low compensation contracts from insurers in California, which are some of the lowest in the country. Who’s going to pay the bill?
In the meantime in the midst of this situation, Blue Cross has found its way to find 101 million to start a Venture Capital Corporation, I can’t help but think that the 101 million could have certainly contributed to the payment of many claims. All insurers sit on one big hay stack of money, could even be up to a few trillion across the country at this point, but a related post shows the amounts of just 3 carriers in the state of Washington a couple years ago and no doubt it has grown so do the math and multiply this across 50 more states and add in a few hundred additional carriers and that might give an idea as to the cash stockpiles. In Pennsylvania the legislators have been asking questions about such reserves.
“Capital maintains a financial surplus, as do the state's three other BlueCross and BlueShield plans. The Blue plans have been forced to justify those surpluses to regulators and legislators.
They have maintained that the surpluses, and the resulting investment income, help them to cushion the impact of medical cost inflation and would help keep them solvent in the event of something such as a flu outbreak that would cause widespread hospitalizations.”
So what is the answer here, the carriers say they need the large reserves in case of a gigantic flu outbreak, but in the meantime consumers go without the healthcare they need and some are dying in the effort. California has even brought the insurers to task as well demanding for a certain percentage to be dedicated to paying claims, but as mentioned above, profits are allowing for the creation of new Venture Capital Companies, and where the money goes who knows, so far only one software company funding has been announced and it is the business of risk management and not directly towards better healthcare.
There’s also a pilot program going on with Blue Cross to begin covering surgeries done in India as it is cheaper, so where is all of this leading to, a trip on the “Brokeback Jet” to another country to get healthcare in our future? BD
California physicians suffered a setback in the effort to block the “balance billing” regulation this week when Sacramento County Superior Court Judge Michael Kenny denied the California Medical Association’s (CMA) petition to invalidate regulations promulgated by the California Department of Managed Health Care (DMHC) that prohibit physicians and hospitals from “balance billing” for emergency care.
“Balance billing” is the practice of billing patients directly for outstanding out-of-network care costs not covered by health plans. Balance billing has been a remedy to address nonpayment or underpayment by HMO’s and health plans; physicians could seek payment of “usual and customary” fees not only from the plans, but from the patients enrolled in the plans when the plans failed to pay. Until the regulations took effect, the only constraint on balance billing were contractual provisions in health plan contracts that prohibited billing patients for “covered services.”
The DMHC policy appears to have emerged as a negative reaction to a single provider, hospital system Prime Healthcare, which balance billed thousands of Kaiser Permanente HMO patients for out-of-network emergency care.
Health insurance companies are 800-pound gorillas, responsible for 30% of health care dollars siphoned aways from healthcare to excessive administrative costs, lobbying, marketing, CEO salaries and profit-taking - $1.4 billion stock options to former UnitedHealth CEO William McGuire; $30 billion annual after-tax health insurance profits, plus $32 billion insurance underwriting and marketing costs, in a year. Health insurance companies are gaming the system for profits giving rise to the $20 billion annual business of “denial management” - health insurance middlemen employed solely to search claims for excuses to delay, deny or renege on reimbursements. The managed care industry is more involved in managing the dollars than patient care. Thirty percent of physician and hospital claims are initially denied, requiring multiple resubmittals adding a significant shortfall in revenues and pushing the hospitals to financial insolvency. The major factor causing hospitals and emergency departments to shut-down is poor reimbursement. The cost of health insurance premiums have steeply climbed 8%, more than twice the rate of inflation or cost of living, with an average annual rate of $ 12,000 to get coverage for a family. At the same time the payments to the doctors and hospitals have been decreasing even when not accounting for the rate of inflation.ReplyDelete
The 30% off-the-top administrative cost of healthcare in the US is uniformly brushed off with benign euphemisms like "bureaucratic inefficiency" as if it is an inescapable dimension of reality. But this is just hot air from conservatives who want to keep the status quo and keep the insurance companies profitable claiming that government run healthcare would be a bureaucratic nightmare and more monies wasted in bureaucracy. This is a lie. Medicare's administrative costs are only 3%. In other words, Medicare is 1000% more efficient than private health insurers. 97% of Medicare's expenditures actually purchase treatments and services for patients, not more vacation homes for senior vice presidents.ReplyDelete
In the end, the health insurance companies are about profits, they are accountable to their shareholders and not their patients. I feel like the only case in which they really truly care about their patients is to make sure they do not get sued for being negligent. I remember the story that John Edwards used to always tell about the girl whose life-saving transplant was denied by her health insurance company, and they finally approved her transplant the day she died. In that case she had health insurance but the health insurance picked profits over their patient, and she died for it. I really don't think that a health insurance company should be both in the business of keeping people healthy and making profits.ReplyDelete
My thought about the health insurance companies is that instead of a traditional dividend to stock holders, etc., monetary gains could be disbursed back to policy holders in the form of a rebate or improving reimbursement rates for hospitals. I still think paying CEOs $18 million dollars a year is excessive by most standards, as with Aetna's Ronald Williams. This was in the New York Times recently.ReplyDelete
These HMOs are using health care premium dollars paid by the consumers to post billions of dollars in profits rather than provide fair reimbursement to hospitals and physicians (in 2006 profits posted by the profits posted by the big three insurance giants totaled over $ 7 billion: PacifiCare/United Health - $ 2.9 billion, Aetna - $ 1.26 billion, and Wellpoint/Blue Cross - $ 2.29 billion). Similarly, healthcare executives have amassed fortunes to the tune of hundreds of millions of dollars away from healthcare. On the other hand, the doctors and hospital are left with empty bag begging to be paid a fair payment timely so that they don’t have to go insolvent. Fifty five percent of California hospitals are currently in red and over 20 hospitals have closed while far greater number of hospitals have shutdown their emergency rooms in the past decade alone. The single most important factor contributing to hospital closures is decreased reimbursement. Even if these hospitals were paid only their costs of providing care, they would not have gone bankrupt and closed.ReplyDelete
"Balance billing" is charging the patient for amounts that the insurance company should rightfully pay, but chooses not to. DMHC (Department of Managed Health Care) is the government entity that is in charge of regulating the insurance companies including making the insurance companies pay what they must for the covered services provided to the health plan enrolles. But, DMHC has become so corrupt and inefficient that it takes not significant action on the very entities it is supposed to regulate. DMHC is opting to not enforce its authority over the insurance companies and instead letting them keep the premiums they collected from the enrollees. A while back there was a big uproar from the consumers to make insurance companies spend at least 80% of the premiums collected towards actual medical care, instead of administrative costs and CEO bonuses. That proposal was shoot down by the big insurace companies. The health insurance companies hardly spend 50% of the premiums on actual healthcare costs. The rest of the monies goes directly to their bottomline. Where ever the HMOs are pressured, the first thing you hear from them is that they want to raise the premiums. It is as if raising the premiums is the universal solution to the ciris plaguing the health care industry today. Why do HMOshave to raise the premiums when they are making record profits, which is disporpotionately higher than any other insurace business. DMHC is the same agency that let the insurace companies like Kaiser, Blue Cross, HealthNet, recind the coverage after the patients were provided treatments for cancer, claiming that these were preexisting conditions. DMHC never sued any of the insurace companies over these appalling practices. Everybody listerns to a 800-pound gorilla and don't really care for the doctors and hosptials working in the trenchs providing actual patient care.ReplyDelete
Thanks to everyone for commenting here, it is a mess and as I pointed out funds are going other places other than health care as we all agree to here by all means.ReplyDelete
Fox News also has been kind enough to put my Desperate Hospitals series up, so hopefully we can get some additional awareness there as well. It's like a steamroller with no brakes and just keeps moving with nobody minding the shop.
Here's the link to Fox News and pass it along to others if you find it helpful in getting the word out.
Why was DMHC sleeping on the job when the insurance companies were retrospectively denying coverage after the medical care was provided by doctors and hospitals. Who did they think was going to pay for the cost of the medical care that was provided. These same governmental agencies are now trying to protect the profits of the insurance companies under the pretext of protecting the patients. There simply would be no balance billing if the insurance companies paid their fair share of medical bills instead of forcing doctors and hospitals to bill patients. Why can’t government mandate insurance companies to first pay the medical bill and then argue about what fair amount is? Medicare and Medi-Cal for example do just that. MediCare and Medi-Cal pay just for the cost of medical care. While the insurance premiums have doubled and tripled over the past decade, reimbursements to doctors and hospitals have halved. So who is the cause for our broken healthcare system?ReplyDelete
We can go in circles arguing about who is to blame until cows come home. The fact is it will take strong government regulations to reign in on the insurance industry to fix the healthcare crisis. That is not going to happen if the same politicians who are pro-HMOs and pro-big insurance companies remain in power. It needs someone who can take on the big insurance companies. President-elect promised to take on these insurance companies and have them cover preexisting conditions, something these insurance companies denied to his mother on her deathbed.
If your insurance doesn't cover for necessary medical care, why have insurance? Just as well save your premiums for a rainy day! The HMOs have been exploiting the public for years and profiting from it. Obviously this issue with balance billing is a diversion tactic to take public mind away from the cause of the our current healthcare crisis, the private health insurance industry. As an analogy, if your optometrist got paid $100 for a $400 glasses, should be expect the optometrist to eat $300 because you don't think you "ought" to pay for it? Get real. This is more true for a hospital or an emergency department. When did the government get the idea that they shouldn't force the insurance company to pay for what they insure?ReplyDelete