Tuesday, June 18, 2013

Drowning in Paperwork

Because CPA Boy has had so many procedures in the hospital this year we have many medical bills. And the thing is this: every single bill means at least 3 to 5 sheets of paper to sort through.

You get a pacemaker. The hospital sends you a statement with the words "THIS IS NOT A BILL" on top. It tells you the full cost of the procedure and that they have submitted the charge to insurance. They send these monthly until the insurance company pays so you sometimes end up with 2 or more of the "not a bills".

Then insurance pays and an explanation of benefits (EOB) is generated. I log into the insurance website and print them out to match to the hospital (not a) bill.

And I also have an Excel spreadsheet to keep track of everything! Each EOB is logged and I can tell at a glance where we are on meeting the deductible or whether I've paid a bill yet.

The hospital will finally get around to sending a statement with the words "THIS IS A BILL" on it.

And each of these statements, whether a bill or not, includes a pay envelope which go right into the recycling because I pay on-line or over the phone with a credit card.

Then I make piles of each item and match them up. And because a pacemaker doesn't insert itself, the doctor bills you, the anesthesiologist bills you and there are sometimes separate hospital bills for lab work.

This year our insurance has a deductible of $5,650. So we pay 100% of every bill that comes through up to that amount. But then we have what is called "out-of-pocket" costs of $11,000.

After we reach the $5,650 insurance starts paying 70% and we pay 30% until we reach $11,000 (5,650 deductible + 5,350 out-of-pocket). This only happens in years when we have some sort of surgery. Most years we just pay for a few visits to the doctors, prescriptions and flu shots and never even reach the deductible.

And that doesn't even count how much we pay in insurance premiums every year! That's another $10,000!

But without insurance the doctors and hospital would make us pay 100% of their bills. That amount so far is just over $105,000. Obviously paying $21,000 is better than paying $105,000 (and that will go up as the year progresses).

What's really interesting is the comparison to how much is billed and how much insurance lowers with "patient savings" (this is the deal each insurance company works out with medical providers).

For example, the angiogram at the hospital was billed for $28,543.40. Insurance deducted $19,057.40 so the hospital only gets a total of $9,846 (part from the insurance company and part from us).

For the pacemaker, the charge from the hospital was $61,828.36 and the savings was $41,146.03 meaning they will receive $20,682.33 (again, part from insurance and part from us).

You have to wonder how much things really cost! Does an angiogram really cost $28,000 or is it really closer to $9,800? Does a pacemaker procedure cost $62,000 or $21,000?

Presumably the hospital would not be willing to accept an amount lower than the actual costs but I'm not sure that's the case. Perhaps there are people without insurance who are struggling to pay the full amount. Maybe it averages out.

Time Magazine had an amazing cover story a few weeks ago about this very subject. One of its points is that there needs to be greater transparency in medical pricing.

People can't really shop around because hospitals don't offer pricing guides for comparison and then many people need hospital services on an emergency basis and don't have the luxury to compare prices.

So this is where our money goes this year. (Our last big medical expense year was 2010 when I had some female surgery and The Boy had a procedure on his leg.)

(I'm completely ignoring the entire political healthcare debate. I don't believe this is a partisan problem. It would be nice if there were bi-partisan solutions though!)

And that's why I'm drowning in paperwork!

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