Health care cost and complexity necessitate closer attention
This week’s blog comes from a guest author, Derek Fitteron, CEO of Medical Cost Advocate. We invited him to share his insights on the issue of medical costs and medical billing errors.
The complexity and cost of health care are on everyone’s mind. With the implementation of the Health Care Reform Act, the pace of change and related confusion are guaranteed to increase. No wonder 79% of wealthy Americans cite health care costs as their top financial concern in 2012 (Merrill Lynch). Most families lack the time and capability to properly manage their growing health care risk exposure.
It is widely reported that more than 70% of medical bills contain errors. What’s more, 77% of Americans have trouble understanding their insurance coverage or reading an Explanation of Benefits. Too often we hear, “I just pay the bill” or “I don’t bother filing medical claims.” These issues have consequences beyond overpaying because your insurer or Medicare is not aware of your true utilization of coverage. You may be exposed to uncertain risks should you ever become ill and need to use your full plan benefits.
The prevalence of billing errors is expected to worsen. In 2014 the ICD-9 code system hospitals have used since 1979 is being updated to ICD-10; increasing the number of codes from 24,000 to more than 155,000. The ongoing implementation effort has been compared in scope with the issues the technology industry faced leading up to Y2K.
The requirements of insurers are also becoming more stringent. For example, in the last 3 years there has been a 23% increase in pre-authorization requirements to prove medical necessity prior to insurance covering treatment. There has been a marked increase in the number of appeals families require to secure coverage.
In 2014, several key elements of Health Care Reform Act will begin; including coverage mandates, insurance exchanges and tax increases. The implementation of these changes will be taking place throughout 2013 and the impacts will be felt for a decade. Premiums, out-of-pocket costs and taxes for currently insured families will be going up. In the meantime, physicians are opting out of insurance/Medicare networks in increasing numbers and creating concierge practices to proactively serve a smaller number of patients, outside the normal system.
Families are paying for and deserve competent medical care, but not the tangled billing and administration that often accompany it. Who is reviewing, filing, appealing and tracking your medical billing? Who is making sure your family realizes value from your insurance coverage? Who is providing the claims advice you need to navigate this health care environment?
This is the first in a series of blogs that focus on a wide range of health policy issues. Look for our next policy post in January.
About the author:
Derek J. Fitteron
As founder and CEO of Medical Cost Advocate (MCA), Derek is responsible for strategic direction, general management and quality delivery of MCA services. Prior to founding MCA, Derek was a senior manager in Arthur Andersen’s Strategic Services Consulting Practice and the Chief Operating Officer of Best Manufacturing Group, a global health care and hospitality garment manufacturer/distributor. He is also the founder of Eventerra Health, a health care focused business consulting firm. Derek is an operating advisor to two private equity firms– Long Road Asset Management and Main Street Resources. He holds an MBA with honors from Columbia Business School, a BS from Lehigh University and is a CPA.