People have a right to receive in plain language a summary of what doctors bill, what insurers pay and how much they themselves must pay. I had hoped that with all the talk about transparency in health care, Medicare would be taking a lead in making its own explanation of benefits (or EOB) - called the Medicare Summary Notice (MSN) - easier to understand.
A recent MSN I received illustrates what we're up against. I dissected the notice examining what Medicare paid, what the doctor billed, and what Aetna, my supplemental carrier, paid for a $289 claim for an eye exam, a Medicare-covered service. It was an exercise in frustration. There were three different forms to juggle, which, to make things more complicated, did not arrive at the same time, but showed up over a five-month period. The exam took place before Christmas last year; the doctor finally sent his bill in late May.
The MSN arrived in January telling me that Medicare's approved amount - the amount it would use to determine its share - was $94.29 and that Medicare paid the doctor $75.43. That was 80 percent of the approved amount, which is standard operating procedure. (It would be nice for Medicare to reinforce that point since most beneficiaries do not understand it.)
Medicare said I might be billed $18.86. I had assumed that since the doctor accepted Medicare's payment of $75.43 in full, and I had paid my Part B deductible for the year, I wouldn't have to pay more.
Then I spied a special note at the bottom that said the approved amount was based on a special payment method, which I had never heard of. At the end of a section called 'general information,' I learned that my claims may have been adjusted since Medicare changed in 2010 how it pays for certain services. It advised comparing previous claims and said my provider might owe me a refund, or I might have to pay more coinsurance. Was that required by Medicare, my insurance carrier or who? It was unclear. I looked at past claims and found the same note attached to a charge for a flu shot and a pneumonia vaccination.
As the MSN instructed, I called Medicare's helpline where an agent told me the special payment method was used when doctors accept assignment. It means, he said, "no copayment with the doctor accepting assignment for the shot" and that it could mean different things for different claims.
Not finding that very helpful, I called the Medicare press office. Wearing my journalist's hat, I asked again what was the special payment method. The answer would win a prize for government speak. The press office gave me a description of the most common applications of the special payment. One explanation was simply indecipherable. The second said the payment is applied "when the item or service is covered under a local coverage determination". That is, the local claims processing contractor has adopted a policy that limits coverage of a specific service to certain diagnoses, frequencies, or other restrictions. While this might have made sense to a bureaucrat, it made no sense to me. Did it mean contractors' private insurance companies who actually pay the claims'have the power to decide on a claim-by-claim basis what gets paid?
Aetna's EOB for the claim arrived a few weeks later. Under a heading called 'Not payable by plan (Remarks)' it confirmed that neither I nor Aetna would have to pay $194.71 (the difference in the original exam fee of $289 and the Medicare approved charge of $94.29) because the doctor accepted the Medicare approved amount.
The Aetna EOB said that after Medicare paid its 80%, the remaining amount due to the doctor was $18.86. Aetna advised me that it would pay all but a $5 copayment of that amount. It would have helped had the carrier said this was a co-pay imposed by my Medigap policy and not Medicare. Copayments and coinsurance confuse people.
One of the columns on the EOB said I could contact the doctor for the diagnosis codes for the claim if I wanted to know more. Three months later the code showed up on a bill that identified the service as an eye exam for an established patient, but ominously noted the "charges exceed your contracted legislated fee arrangement.'' And it noted the following: "Writeoff Aetna Payment Insurance unknown reason." None of this made sense in the context of the bill.
This little exercise involving a simple claim shows how hard it is for people to engage in their medical care. Pity the poor patient who has dozens of claims and forms following a serious illness! This whole mess needs to be tidied up, perhaps by regulation and standardization if we are really serious about the promise of transparency and clarity advanced by health reform. And especially if we are expecting seniors to take on more of the burden for paying for their health care.