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“Free” Health Care is Often Not Free

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The health insurance industry is still weighing the benefits of a new federal requirement that prevents doctors from billing patients or charging a co-pay for recommended preventive care.

On the one hand, by encouraging people to make regular visits to the doctor, we may save lives and money by catching illness in their early stages. Yet it is certainly misleading for anyone to expect preventative care to simply be “free.”

Every “free” preventive doctor visit and “free” preventive test is billed by providers to insurance companies. Those costs are passed on to policyholders and employers in the form of higher insurance premiums.

The other issue is that should be addressed is when patients are billed for care that they expected to be covered at no direct cost to themselves as preventive care.

As a health insurance broker and president of the New Jersey Association of Health Underwriters, I’ve been answering numerous questions from policyholders who can’t understand what is free and what isn’t. They are skeptical when they receive a bill for routine visits, wondering if their insurance company is already fronting the cost.

This isn’t as if people are acting less than honest. Here are the culprits:

1. Billing code confusion.

You may think of a mammogram as a preventive service, but if the billing code for a diagnostic service is submitted to the insurance company, you will get a bill. I spend considerable time on the phone, discussing this issue with policy holders, medical providers and insurance companies.

The key to understanding the difference between preventive care — which should not be billed — and diagnostic care, which is eligible for billing — is this: preventive care is given to people who are apparently healthy. It is precautionary. Diagnostic care is given to people to determine the cause of their symptoms.

The same service can fall under either category. A mammogram given to an apparently healthy woman should be billed as preventive. A mammogram given to a woman who has noticed a lump in her breast should be billed as diagnostic.

Protocols need to be put in place to ensure both the physician and the patient knows if the visit is preventative or diagnostic.

Further complicating this issue is the creation of health insurance exchanges, in which Americans could soon be able to purchase their insurance online. In this informal transaction, there will be no one that can go to bat for the patient, ensuring he or she receives the benefits entitled.

Patients also need to be better informed. I highly recommend asking doctors and their support staff if they can confirm a service is going to be billed as preventive.

2. Preventative care becomes diagnostic care.

Let’s say you visit a physician for a colonoscopy. You don’t have any symptoms but you have reached the age where it is a recommended preventive service. If the doctor finds nothing unusual, it shouldn’t cost you a cent – it will be billed to your insurance company.

But if the doctor finds a polyp and removes the offending growth to send it for further testing, you have now received a billable, diagnostic procedure. It’s like getting a free piece of birthday cake, but then finding out that it’s only free if you don’t eat it.

3. Out-of-network care is treated differently from in-network care.

This is something policyholders may actually be used to. If you go to a healthcare provider that isn’t in your insurance company network, you probably expect to be billed at a higher rate. Just because a preventive service is supposed to be free, that doesn’t mean you can get it for free anywhere.

I call on legislators in state houses and in Washington to craft sensible legislation to make it easier for people to understand what is free and what isn’t in this new era of health care reform. I call on doctors to be fair, open and transparent in their billing. I call on patients to be informed and to ask questions.

As a health insurance broker it’s my job to stay up-to-date on regulations and answer policyholders’ questions but I’d rather see these problems avoided in the first place. Preventing a billing issue is always easier than curing one.


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