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The medical care system is not easy to understand. There are hundreds of different payers for care given to individuals – insurance companies, government, unions – all with different rules for paying and limits on what they’ll pay for. They have different methods for determining what is reasonable for them to pay for visits, lab tests, procedures, surgeries, etc., and they have different expectations on what will be written off by the provider or paid for by the patient. For those without insurance in Massachusetts, there was, and still is for some, the so-called “free care pool” for those who are poor enough to qualify for it, and there are significant out-of-pocket expenses for those above that level of income. There are also out-of-pocket expenses for most insured people, in the form of copayments, deductibles and non-covered services.
These different ways to pay for services are divided into two different terms that describe health care revenue – third party payments (generally the money that comes from insurance companies, unions and the government to pay for services), and first party payments (money out of the pockets of the recipients of care). In the recent past, many insurances would cover nearly all the cost of health care (minus a small copayment for a visit to a doctor). But health care payments are more and more made up of a combination of first and third party payments for services. So, you pay a $5 or $10 or $25 copayment when you get your prescription, a $10 or $25 or $50 copayment when you visit your doctor, and some are now paying copayments when admitted to the hospital. The hospital payments can also be in the form of “balance billing” payments that are due afterwards, based on what your insurance will pay for a service, and what they will allow the provider to bill you directly afterwards, after the insurance has paid its share.
These costs are often ignored in the reporting of health care expenditures, including coverage of Chapter 58. When State officials talk about keeping the cost of health care low, they are referring to the third party cost. So, when the announcement was made that 37 year olds could get insurance under Commonwealth Choice for $170 per month, they were referring only to the cost of health insurance. You had to read into the story to find out that The Connector lowered the initial cost of insurance by increasing the first party costs, which can be upwards to $2000 per year if you actually use health care services.
What happens if the formerly uninsured person decides to buy the health insurance provided by The Connector, but then fails to pay the copayments and deductibles? That’s one of the worries of the safety net providers, of which my organization is one. The great fear of the safety net is that we won’t get paid, that we’ll be forced to “eat” the loss of reimbursement when a patient fails to pay or turn away the patient. Since the safety net’s missions are to provide care no matter what the financial circumstances of the patient, the fear is that we’ll be faced with lots more bad debt, which is the term for when a patient fails to pay for a service for which s/he is required to pay.
Another fear of those of us in primary care, is what happens to those patients who are ineligible for Medicaid or Commonwealth Care or Choice? There will continue to be a free care pool, we have been told, but it will be much smaller. Will all services currently paid for continue to be paid out of the pool? What happens if we cannot get information required to allow for reimbursement from the pool? In this regard, the raid on the Michael Bianco Factory in New Bedford was a terrible message for immigrants that will affect the safety net system. If immigrants, legal and illegal, were previously reluctant to provide information needed to certify eligibility for care to providers of care, many are now terrified to do so. Our failure to collect information results in our failure to be reimbursed for the services we deliver. For citizens, what if the patient just doesn’t sign up for the new insurance? Will there be reimbursement for services, or are we expected to turn them away?
And for some primary care safety net providers, the rate of reimbursement will fall sharply as the state adopts Medicare reimbursement regulations instead of Medicaid. Why the state decided to adopt Medicare regulations, generally written for the elderly, instead of Medicaid regulations, written for people who closely resemble the uninsured, is a mystery that will result in lower reimbursement for some parts of the safety net.
The reality is that the safety net is full of holes. We deal with the most complex people and health issues, and this complexity generally leads to difficulty tracking down the information necessary for reimbursement. At the Codman Square Health Center, for example, the third of our patients who are uninsured results in over a million dollars in bad debt annually.
All of this is to say that there are many, many details that are still being worked out around Chapter 58, and safety net providers are hoping that we do not become victimized by a failure to carefully monitor the effect of Chapter 58 on the providers who care for the poor. The health of the safety net needs to be a major concern as Chapter 58 is implemented.
Post Script: After I completed this blog, I received in the mail a publication by The Access Project, entitled “The Illusion of Coverage: How Health Insurance Fails People When They Get Sick.” Among its findings: Underinsurance (into which they include insurances with $2000 in deductibles) results in poor access to care sometimes resulting in increased cost from lack of preventive care, increase in personal debt and bankruptcy, change in employment, access to credit, and psychological consequences. For more information, see http://www.accessproject.org.
Bill Walczak is the CEO at Codman Square Health Center
This program aired on May 21, 2007. The audio for this program is not available.
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