Concerns About Health Insurance Bills

1:15 PM, Aug 10, 2012   |    comments
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BUFFALO, N.Y. - When an Elma man got out of the hospital and started receiving medical bills and statements from his insurance company, he was amazed when he saw the hospital's charge and what his health insurer contracted to pay.

The explanation of benefits that Paul Dugas received from BlueCross BlueShield indicated that the hospital charges totaled $14,011.98. However, the insurance company negotiated payment for his particular service at $15,591.16

BlueCross BlueShield of Western New York could not speak specifically about a patient's case for confidentiality reasons, but they did explain that insurance companies negotiate prices with hospitals and healthcare providers for all services to determine a contract allowance.

Laurie Kalman, director of commercial accounts for BlueCross BlueShield said, "if the allowance is more, for a particular service, than what the hospital or the provider bills, we would pay the contracted amount, minus the member's co-pay, co-insurance or deductible."

It is very rare for this to happen. "It's about less than one percent of our total claims that the situation occurs."

The health insurance company says contract allowances are simply discounted prices they negotiate to benefit patients and they say most of the time the bill is reduced in half because of deals worked out between the health insurance company and the health care provider.

Kalman cited two examples. "A total hip replacement at an area hospital, the average bill for that is about $40,000, with our contract allowance it's less than $24,000. An average maternity claim at an area hospital will come in somewhere around $13,000. Our allowance for a standard maternity claim is about $6,000." 

Medical Billing Advocates of America (MBAA) is a national organization which reviews medical billing errors and insurance mistakes told 2 On Your Side that they see contract allowances that are more than an actual bill across the country.

It can be a shocker for patients like Dugas. "When you see something like that where they're actually paying more money, that's pretty upsetting to me."

Pat Palmer, founder of MBAA said patients can do always, "request a detailed itemized statement and review line-by-line the charges. Certainly a patient can identify that they may have not had that drug or it was discontinued for some reason and they're still being charged for it. They may be charged for four hours in an O-R (operating room) , when in fact they were only in there an hour or two."

Understanding health insurance bills is complex. Kalman said it's important to know that "our contract allowance isn't paying just for the service. It's paying for all of those other costs that are required to be able to have a hospital open. You're paying for brick and mortar, you're paying for insurance, you're paying for people, you're paying for technology, you're paying for administration."

Click here to here more about insurance billing and contract allowances from Dr. Rajhu Ram, Chief Medical Officer for BlueCross BlueShield of WNY.

The explanation of benefits that Paul Dugas received from BlueCross Blue Shield indicated that the hospital charges totaled $14,011.98, however the insurance company's negotiated payment for his particular service was  $15,591.16

BlueCross BlueShield of Western New York could not speak specifically about a patient's case for confidentiality reasons, but they did explain that insurance companies negotiate prices with hospitals and healthcare providers for all services to determine a contract allowance.

Laurie Kalman, director of commercial accounts for BlueCross BlueShield  said, "if the allowance is more, for a particular service, than what the hospital or the provider bills, we would pay the contracted amount, minus the member's co-pay, co-insurance or deductible."

It is very rare for this to happen. "It's about  less than one percent of our total claims that the situation occurs."

The health insurance company says contract allowances are simply discounted prices they negotiate to benefit patients and they say most of the time the bill is reduced in half because of deals worked out between the health insurance company and the health care provider.

Kalman cited two examples. "A total hip replacement at an area hospital, the average bill for that is about $40,000, with our contract allowance it's less than $24,000. An average maternity claim at an area hospital will come in somewhere around $13,000. Our allowance for a standard maternity claim is about $6,000."

Medical Billing Advocates of America (MBAA) is a national organization which reviews medical billing errors and insurance mistakes told 2 On Your Side that they see contract allowances that are more than an actual bill across the country.

It can be a shocker for patients like Dugas. "When you see something like that where they're actually paying more money, that's pretty upsetting to me."

Pat Palmer, founder of MBAA said patients can do always, "request a detailed itemized statement and review line-by-line the charges. Certainly a patient can identify that they may have not had that drug or it was discontinued for some reason and they're still being charged for it. They may be charged for four hours in an O-R (operating room) , when in fact they were only in there an hour or two."

Understanding health insurance bills is complex. Kalman said it's important to know that "our contract allowance isn't paying just for the service. It's paying for all of those other costs that are required to be able to have a hospital open. You're paying for brick and mortar, you're paying for insurance, you're paying for people, you're paying for technology, you're paying for administration."

Click here to here more about insurance billing and contract allowances from Dr. Raghu Ram, Chief Medical Officer for BlueCross BlueShield of WNY.

WGRZ

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