Katie Ryan-Anderson, a health reporter at the Jamestown Sun in Jamestown, North Dakota, had a question. What did all that gobbledygook on the Explanation of Benefits (EOBs) from Blue Cross Blue Shield of North Dakota mean? Her infant son had been sick and the bills were coming in along with those indecipherable statements from her insurance company.
Ideally, an EOB should in clear language identify the medical services provided, what the insurer paid, and what the patient still owes, if anything. But as I have reported before, too many EOBs miss the mark; they are confusing rather than illuminating. Ryan-Anderson's EOBs were no exception. One showed that Blue Cross had made five payments to Medcenter One Health System. It listed the total charge, covered amount, and the amount Ryan-Anderson had to pay on her own. That was straightforward enough. On another page, the insurer gave a breakdown of charges and benefits. Here's where clarity fell apart.
The amounts of the charges submitted by providers were clear enough ' there was a $9 charge for an office laboratory service. But the columns called 'covered amounts' began to muddy Ryan-Anderson's understanding. The covered amounts included a 'provider discount' ' the rate the provider agreed to accept from the insurer and an amount that Blue Cross would pay. It took a few minutes to figure it all out. The insurer had negotiated a discount with the provider, which was $2.28. So Blue Cross would pay just $6.05 of the $9 charge. She would have to pay the difference remaining, sixty-seven cents, which was added to her yearly coinsurance tally. At least Blue Cross had used the term 'provider discount.' Some EOBs use the term 'insurance disallowance.' That one stops me cold and would for anyone trying to grasp insurance company jargon.
But what exactly were the services Ryan-Anderson's child received? The EOB identified one service as 'office laboratory.' In the same breakdown, there was also a charge for an 'independent laboratory' service. How could Ryan-Anderson figure out which specimens were sent to which labs without more information? How could she shop for a lab that might analyze the sample for less cost? Or plan for future expenses without knowing what tests were provided by whom?
If patients are to be transformed into consumers, they need to understand how their insurance coverage works, know what they are paying for, and have access to simple pricing and relevant provider information. EOBs that use vague or opaque terms or fail to identify a service make the job impossible.
A Medicare beneficiary I know received an EOB from GHI, a subsidiary of Emblem Health in New York City, advising him he had to pay $533 for 'durable medical equipment' supplied by DEGC Enterprises. What equipment? He had never heard of DEGC Enterprises. He called GHI and learned that Medicare covers test strips and glucose meters for testing blood, but it doesn't cover the needles. GHI, his Medigap carrier, picks up the difference between what Medicare pays and the cost. But since Medicare does not cover needles, he's stuck with the bill. How many seniors think of insulin needs as durable medical equipment?
Blue Cross did indicate on Ryan-Anderson's EOB that customers could obtain a step-by-step brochure on how to read its EOB or they could consult an online guide. That's a move in the right direction, but it adds a layer of complexity to the tasks that patients who are sick already face. Unless you know what services are given and what they cost, you're buying a pig in a poke for health care.