Turning Employees Into Allies in Healthcare Rising Costs
Over the last five years, the news about health costs has gone from bad to worse—it’s bad for plan sponsors, who are paying 32% more for coverage, and worse for individuals, who are paying 42% more for care than they did in 2008. What makes the matter even worse, however, is that many plan sponsors—typically employers—have been forced to reduce costs through higher deductibles or more restrictive benefits. Either way, the employee is bearing the brunt of cost shifting and will be less satisfied with their benefits.
But are there other options?
One of the cost centers that many of these methods miss is also one of the biggest potential savings opportunities: fraud and waste. A recent Price Waterhouse Coopers study concluded that about $1 trillion is wasted annually on healthcare. This includes administrative errors, unnecessary care, poor quality care, and many other savings opportunities. So how do we start making a dent in all of this waste?
As with many things, the first step is realizing that there is a problem. Many people are unaware of the volume of errors that can slip through the medical billing system. Plan sponsors often assume that the third party administrator (TPA) and/or health plan is already finding these mistakes during claim adjudication, but unfortunately they have some blind spots when it comes to providers’ billing. Provider billing offices are often understaffed and overworked, and many billers may have limited training or experience. In addition, much of the information that they are trying to translate into a bill is often handwritten on paper.
The result is that the patient statements may contain errors, and the third party administrators (TPA)/health plan never sees those statements! In fact, when doing a root cause analysis of the medical bill errors encountered by CoPatient, 90% originated in the provider billing office.
Why aren’t individuals more engaged in their healthcare?
Nearly one in three Americans have spent time disputing a medical bill or appealing an insurance denial, so they often get overwhelmed by the complexity and give up. In the direst situations, Harvard researchers found that 2/3 of personal bankruptcies were associated with medical debt, and in most cases those individuals had jobs with health insurance coverage at the onset of their illness. Businesses have invested considerable time and energy in finding, hiring, and training their employees so the productivity loss of an employee under such extreme financial duress is substantial. Not only is this stressful for the individual, but it is incredibly costly to their employer.
There is assistance available, and it may make sense to ask an expert for help if the billing that the employee is receiving is especially confusing or overwhelming. The AGC Oregon-Columbia Chapter is partnering with a unique technology-enabled medical billing advocacy firm called CoPatient. CoPatient’s medical billing advocates understand the terminology and jargon used in creating medical bills, so they can often untangle more complicated questions. For example, they can describe a procedure to the employee in plain English so the employee can verify whether they actually received the procedure. They can also find issues with the complex universe of billing codes used in healthcare, which will be growing even more complex with the release of the ICD-10 update in 2014.
CoPatient offers their services on a contingency basis, meaning they will investigate any bill for your employees for FREE. If there is an error or overcharges then your employee (or their dependents) can opt-in to their appeal service which means sharing in any cost savings realized. So if CoPatient resolves a billing issue and saves your employee $2,000 then CoPatient charges 30% of the cost savings or $600. The employee is only out of pocket $600 instead of $2,000, not to mention the time and frustration saved, which positively impacts employee productivity.
We all know that shared responsibility for healthcare spending is the only way to get everyone aligned around reducing costs in a responsible way. As the healthcare industry tries to evolve for sustainability, it is absolutely necessary to engage your employees in the conversation. Employees can be their own worst enemy or best ally when it comes to healthcare expenses. Working together will fully empower them to take charge of this new role.