By Becky Wiese
Price checking and comparison shopping makes sense for small and big ticket items — we want to get the best value at the lowest price. It’s why we scour the weekly grocery ads, visit several automotive dealers when we’re car shopping, and watch for sales on washers and dryers.
We are still getting used to price checking and comparison shopping for medical services, however. That’s a little tougher to do, for a lot of reasons. Not too many medical facilities have their charges listed on the bulletin board in the lobby. Even if they did, the patient/consumer won’t know exactly their out-of-pocket expense until and unless they know what their specific insurance plan covers, what their deductible is, and whether they have copays or coinsurance to consider.
It’s a lot to think about. The best time to do that, like with any other major expense, is before you need them. Just like it’s harder to price shop when your washing machine has flooded the basement, it’s harder to know the least expensive option to get a mammogram or MRI or other medical service when you feel like it should be done now. Many times, patients simply go where their physician’s office suggests — especially if it, whatever “it” is — can be done down the hall. Convenient? Definitely. Cost efficient? Maybe not.
If you’re watching your health care budget, perhaps the thing to do would be to create a list of tests, procedures, and possible needs based on your age, general health, and input from your primary care physician. Ask what kinds of tests would be reasonable for a person at your age with your history for preventive and diagnostic purposes? You may not need them all, but knowing the costs of some can save a significant amount of money.
Patient, know thy insurance
Since the implementation of the Affordable Care Act, patients have had to know much more about the specifics of their insurance plan. Some have lower monthly premiums but higher deductibles and out-of-pocket before insurance kicks in, while others have higher premiums, but the deductible is lower so insurance kicks in sooner.
Patient/consumers also need to know what their specific plan covers — the physicians, facilities, specialties, medications — there’s a lot to consider. In addition, each plan has a different copayment (“copay”) amount for things such as primary care visits, specialty physicians, emergency room costs, medications. The copay is the dollar amount the patient pays for a covered service after meeting the deductible. Coinsurance is the percentage of the cost the patient pays for a covered service after meeting the deductible amount.
Note the “covered service” — if the procedure isn’t covered, patient pays all costs. Also note the “after meeting the deductible” — if you have a low monthly premium with a corresponding higher deductible, it will take you longer every year to meet the deductible amount, thus you’ll be paying more before the copayments/coinsurance kicks in.
The patient/consumer needs to know if they’ve met their deductible, if a procedure needs pre-approval, if there are physicians/facilities that are “in” network, if they have a copay or a percentage. Talk with your insurance company — ask questions. Write down responses. Make a note of who you talked with and when and how to reach them again.
Patient, ask thy questions
For some tests (especially in non-emergency situations), patients need to start asking questions regarding the cost. They can take the time to research the cost at different places, and take into consideration other factors such as quality, ambiance, ease of access — some of the more non-medical related issues — before choosing a facility of their liking that accepts their insurance.
“Insurance companies will determine “yes” or “no” about coverage for a procedure based on the patient’s need.” Explains Dr. Wayne Manness, A neuroradiologist and Medical Director of Advanced MRI. “Patients can go anywhere their insurance is accepted, but they should choose where they want to go first, so that the insurance company can authorize the procedure at that specific facility.”
“Basically, the fee charged by the provider is irrelevant, unless the procedure is not covered, then this amount is very relevant to the patient. And that’s where cash discounts set up through the provider become very valuable,” he explains.
“It gets confusing because most providers only quote their charged fees, even when there is a contracted discount. Although the providers’ charges are the same for all patients and insurance plans, providers cannot require patients/insurance to pay more than the contracted discount rate, and the discounts vary depending on the insurance plan.”
For example, patients with Insurance A may see a discounted rate of $600 for an MRI, because that’s the rate the insurance company and the provider have negotiated. Patients with Insurance B may see a discounted rate of $850 for the same MRI at the same provider — again, due to the difference in the contracted discount rate.
The provider may charge $1200 to both patients, but the actual amount each patient will pay depends on these factors: the insurance plan’s contracted discount with the provider, the insurance plan’s deductible amount, and the insurance plan’s coverage terms after the deductible is met (full coverage vs. co-pay vs. percentage).
To make things even more confusing, Medicare uses only the government-allowed rates (i.e., not discounts or negotiated rates). Providers still charge the same amount (for example, $1200 for the MRI), but the total amount the provider can collect from the combination of payments from Medicare and the patient is the government rate.
In addition to cost, Dr. Manness suggests looking at quality. An accredited facility, technology, who reads the tests or interprets the results—a general physician or a subspecialist for that particular body part, and referrals from other doctors and other patients can make a significant difference in the long run.
Another tool to use in finding out costs for medical care is www.healthcarebluebook.com. This website can help you find a fair price based on your location for a variety of medical procedures, tests, and services. Think of it as the Kelly Blue Book of health care.
Other medical services that might be worth checking into regarding cost include colonoscopy, physical therapy, outpatient surgery, and even child birth. Being prepared with knowledge before you need it can help save money on your health care costs every year.
Although there will likely be some changes to the Affordable Care Act, it’s almost a certainty that price shopping for healthcare is here to stay. It will still be extremely important to know what your particular insurance plan covers and will be even more important to advocate for yourself and ask questions regarding cost, quality, and even convenience. Planning ahead for these types of questions can help you make informed, cost-effective decisions when the time comes.
Determining out-of-Pocket Costs Can be Confusing
Amount charged minus contracted discount
with insurance company equals the amount paid
Amount Paid may be from patient or insurance or combination
If deductible has not been met, patient pays entire amount
If deductible has been met, insurance will pay its share, which may be entire amount or a percentage