Health for life

"If youre telling the truth, hit 1; if not, hit 2.  If youre not sure, please wait on the line....."

If the Disease Management Care Blog accepted the common wisdom about commercial health insurance, itd believe that the businessis is an evil empire controlled by pirates who 1) use weenie print to fool unwitting patients and 2) rely on opaque decision-making to deny coverage for life-saving treatments.

Once again, the DMCB eschews common wisdom:

The reason why insurers have used small fonts in their coverage documents has been because their state regulators likewise use small font in their rule making and require full word-for-word disclosure to the beneficiaries. Think of lawyers run amok and youll understand the main reason for the arcane language.

The good news is that new regulations promise easy-to-understand "labeling." The DMCB thinks thats a step in the right direction, but that doesnt mean that a lack of preciseness wont lead to misinterpretation and wrong assumptions. Time will tell.

As for the opaque decision-making, check out (for example) Aetnas and Humanas open-access coverage documents. Yet, despite a high level of on-line transparency, critics may point out that commercial insurers will still require a hassle-laden preauthorization process.

That may be true, but the DMCB says who can blame them? There is literature here here and here that point out that physicians will readily resort to deception get a proposed treatment covered.

To really make the point, check out this just published Health Affairs article. Using a validated survey on a representative sample of physicians (obtained from the AMAs masterfile, which contains all practicing docs, not just AMA members), about 10% of the respondents indicated that, in the past year, they had lied to a patient. A whopping 50% admitted telling a patient that their prognosis was better than warranted.

Egads. This is not only driving medical costs, its increasing variation and exposing patients to unnecessary and potentially dangerous treatments.

Keep in mind that the fee-for-service Medicare program does not engage in "preauthorization" that can lead to a usal to pay for a treatment.  Rather, Medicare generally pays all claims and then relies on retroactive audits to "claw back"any improper payments.

While that has shielded the Medicare program from being lumped in with all the allegedly evil commercial insurers, the DMCB asks two rhetorical questions about the few bad apples who are hurting the profession:

Which would you rather have for you, your parent or your child: an insurer that scrutinizes a proposed treatment ahead of time and doesnt necessarily take the docs word for it, or an insurer that lets things happen and uses hindsight after the damage is done?

And last but not least, how will the new payment mechanisms, like bundling and shared savings, reduce the likelihood of bad behavior?

One of the Disease Management Care Blogs local hospitals has jumped into a lawsuit against Medicare. 

According to this article, the dreaded 2003 Medicare Modernization Acts RAC audits have gummed up Part B as well as Part A payments.  Thats important because Part B includes physician services, which outside of hospital-physician alliances like Accountable Care Organizations, is typically completely separate. Hitting A as well as B not only represents a potential double hit to hospitals bottom lines.

Could that give hospitals a reason to think again about hiring physicians?

Even if the DMCB is wrong about the scope of the lawsuit, the articles paragraph on this hospitals costs in dealing with the RAC audits are eye opening: 6 staff members and additional hundreds of thousands of dollars to cover medical record requests, consultants and appeals.  If other hospitals are being forced to follow suit, the cost to the health care system is considerable.

And those are Medicare administrative costs. These are borne not by the feds, but by hospitals, which must comply with thousands of pages of complex rules and regulations.  While its mathematically true that Medicare has "low administrative costs," thats because the Agencys principal means of enforcement are cudgels like RAC audits with clawbacks with interest, penalties and other sanctions. 

While there is no shortage of hospital bad behavior, DMCB suspects most hospitals are honest and, despite that, have had no choice: add additional administrative expenses that are ultimately passed through to the patient and the nations fisc.