Most Americans and most health brokers make poor health insurance choices as there are too many and confusing choices with bewildering array of options

Health Insurance Choices: Too Many and Confusing

Austin Frakt, senior research scientist with Harvard T.H. Chan School of Public Health, wrote a piece in the N.Y. Times on 8/24/20  -The Fine Line Between Choice and Confusion in Health Care. There is no data about the number of plans by employers. Medicare Advantage generally has over 10 plans, Medicare Part D has over 27 drug plans, Obamacare Exchanges has 19 on average, Federal Employees has 24 plans, and Medicaid has about seven plans. The rationale for all these choices is the freedom to choose what one thinks is best for one’s situation, but in practice, it is extraordinarily confusing, overwhelming, and burdensome. Excessive choice leads to poor choices for most consumers, as elaborated below.

Veteran NY Times Healthcare correspondent Margot Sanger-Katz  writes in a 12/11/20 Upshot  column –  “It’s Not Just You: Picking a Health Insurance is hard. She goes on to write :”Most Americans make poor choices. So do most professional insurance brokers. But Robots may help.”

Nobel Prize-winning economist Paul Krugman is a columnist for the New York Times and teaches at City University of New York. He found various University Health Plan options for his health insurance “incomprehensible “! When Krugman called H.R. at CUNY to explain the differences, they could not. He, therefore, chose one Union plan at N.Y. Times that was simple enough for him to understand!

Faculty staff at  Kellogg’s School of Management at Northwestern University asked Amana Serc, an associate Professor of Management, for her advice in choosing from plans that covered the University’s Hospitals, and she mostly steered them to high deductible plans with lower premiums. High deductible plans work well for those who do not need to utilize much healthcare but can be quite burdensome for those with multiple chronic conditions who require a lot of care.

It was revelatory to me that only 5% of Dutch customers in the Netherlands made a rational choice for Obamacare -like marketplace. (The Dutch have universal coverage-everybody has to purchase private health insurance in a strongly regulated market.). These 5 % were individuals with college degrees, and many of them worked in the health insurance industry.

Health Insurance professionals also did a poor job of enabling enrollees to choose the best plan; their performance improved when they used Artificial Intelligence (A.I.)- supported decision tools or decision-support software. However, A.I. would not be good if the enrollees wanted a plan covering the doctors and hospitals they use.

In conclusion, from an exhaustive research paper on “Consumers’ Mishandling of Health Insurance,” researchers recommend designing health insurance products that are truly simple and require plans to offer identical features.

One way to prevent bad choices is to limit the number of choices available to enrollees, specifically by removing bad options.

At a conceptual level, some bright, innovative minds in the health insurance industry need to design and offer at least a straightforward plan that will cover unavoidable emergency and catastrophic care and will only cover strict evidence-based elective clinical and preventive care with a lower overall Maximum of Pocket Expenses. In such a plan, people will have to accept the necessary restrictions. Such a plan will not be suitable for those who do not want to adhere to evidence-based care as a matter of personal choice –   who want to have “everything checked out” for peace of mind.

For people who are making choices for Medicare Part B and Part D plans, the State Health Insurance Assistance Program (SHIP) is a good resource. When I was choosing a Medicare plan for my wife and myself, I found Wisconsin SHIP people to be knowledgeable and gave me unbiased information, which was very helpful. 

State Health Insurance Assistance Programs help you navigate the complexities of Medicare. On the SHIP website, if you click “FIND LOCAL MEDICARE HELP,” you will be directed to appropriate resources in any state in the U.S.

Even after choosing the best insurance available, patients have to endure enormous difficulties and frustrations navigating denied health care claims submitted to Insurance companies by providers.

MY RECENT PERSONAL EXPERIENCE WITH MEDICAL BILLING ERROR

As a background, I am a senior retiree with Medicare Insurance and Medicare Supplement Insurance. Once a year, I have a Medicare Wellness visit and office visit with my primary care physician. One of my diagnoses for the last 15 years has been Pre-diabetes. As a result, I have an Hb1AC  test annually, and Medicare always covers it. My doctor ordered the test last January 2023. Adhering to HIPAA rules, I can’t name the large healthcare clinic in the Milwaukee area that I go to. I got a billing statement from this provider asking me to pay $80.00 for the Hb1AC test, which Medicare denied. Since Medicare denied it, my supplementary Insurance, which typically covers the portion that Medicare does not, would also not pay the portion it was responsible for.

[As an aside, a web-advised quote for Hb1AC tests cost $40.00]  I sent a message to billing through the online portal stating that Medicare covered this test in previous years, and I needed to understand why Medicare denied it this time. The billing department reiterated that I had to contact Medicare to ask why they rejected it. They did not make any effort to find out what was different this year and also made no effort to address the coding that was associated with this service. To my surprise, I called Medicare and, contrary to my expectations, talked to a very knowledgeable and helpful representative. He reviewed previous Medicare claims records and informed me that, unlike previous years, the billing included the correct CPT code 83036 for HbA1C, a code used to identify medical services. Still, a billing clerk for laboratory services added a modifier (83036-GY), a code used to indicate a specific circumstance that changes the description of a service. Medicare did not cover the GY modifier. The representative told me there was no reason for the modifier. He further asked me to contact the billing department for the laboratory services and ask them to review why somebody added a modifier. He said that Medicare would pay $13.39, and my supplement would pay $2.70 when Medicare processes the resubmitted corrected bill. He also told me Medicare’s eligibility criteria for HbA1C testing are not only a diagnosis of Pre-diabetes and Diabetes but also for those who have a risk for diabetes such as obesity, dyslipidemia, hypertension,  or a previous elevated fasting blood sugar, amongst some others. There was no basis for Medicare to reject a claim for HbA1C testing except for inaccurate coding. This incident prompted me to research medical billing data and understand coding practices. 

In the US, healthcare insurers process over 5 billion claims for payment annually. Shockingly, the medical billing error rate is a staggering 40% to 60%! This means that a significant portion of these claims are not accurately processed, leading to potential financial burdens on patients and healthcare providers. Qualified healthcare professionals’  codes identify their professional services by associating with CPT (Current Procedural Terminology) and ICD-10 (International Classification of Diseases, 10th Edition) codes. These codes describe medical, surgical, and diagnostic services and are crucial for accurate billing and reimbursement.

CPT stands for Current Procedural Terminology, an American Medical Association (AMA) trademark. The AMA CPT editorial panel, consisting of 17 members, is responsible for maintaining and updating the CPT codes. These 17 members, nominated by medical specialty societies, play a crucial role in ensuring that the CPT codes accurately reflect the services provided by healthcare professionals. Their work is essential in maintaining the integrity and accuracy of the medical billing and coding system.

With a vast array of over 10,000 CPT codes, each updated annually, the complexity of medical coding becomes apparent. This underscores the necessity for professional guidance in navigating the intricacies of the healthcare delivery system.

The World Health Organization (WHO), with its extensive database of more than 200,000 ICD-10 codes, and the Centers for Disease Control (CDC), which has adopted over 70,000 ICD-10 procedure codes and more than 69,000 ICD-10-CM codes, play a crucial role in maintaining the reliability and comprehensiveness of the ICD-10 system.

CPT works in tandem with ICD-10 to bill insurers from providers. How the providers code a medical visit is best described below:

“This patient arrived with these symptoms (as represented by ICD-10 code), and the provider performed or ordered these procedures ( as represented by CPT code).”

So, in my case, the ICD-10 code for pre-diabetes is R73.03;  the CPT code for HbA1C testing is 83036. To find out why a billing clerk for laboratory services added a modifier GY, a deep dive was necessary to understand the use of modifiers. Providers use CPT modifiers to supplement the information or adjust care descriptions to provide extra details concerning a procedure or service provided by a physician. Most websites about coding and modifiers are for providers to enhance their revenues by coding and adding modifiers. Some common reasons for using a modifier are a more complicated procedure than anticipated; another common reason is doing the same procedure like an X-ray being done in one facility, and the results are read in a different facility.

Definitions of the GA, GY, and GZ Modifiers:  Medicare, specifically the Centers for Medicare & Medicaid Services (CMS), defines modifiers as below: GY – Item or service statutorily excluded or does not meet the definition of any Medicare benefit—GZ – Item or service expected to be denied as not reasonable and necessary.

As a patient, it’s important to understand the billing codes used for your healthcare services. The patient’s insurance company sends a quarterly explanation of benefits (EOB) that shows how much the insurer paid for each service and matches the CPT code. My billing statement did not match the CPT code for the Hb1AC charge. The Medicare Summary Notice for Part B  provided me with the CPT information as conveyed to me previously by the Medicare Representative on the phone.

The Laboratory’s billing clerk asked me to call one month after resubmitting the claim to Medicare for the A1C test. When I called she told me that the billing department had written off the outstanding bill !

Footnotes: The VERY WELL HEALTH WEBSITE, with columns from Trisha Torrey, is a very helpful resource for patients regarding medical billing and explanations of medical benefits. This resource can provide further information and clarification on the topics discussed in this article.