A new definition for "medical necessity"

[lwieland11]

So, I received the following email yesterday from a financial counselor at my doctor's office in response to a question I had about the almost $5,000 sleep study I had done there. Doesn't that sound a bit outrageous? Yes, it was different that the all night CPAP titration I had in December, which was $2,500. And this one was a BPAP with backup rate if needed. But more than double the cost.

Their reply is unbelievable. Yes, I believe doctors are intimately familiar with what procedures cost!! And no, medical decisions -especially about the need for expensive procedures that would help pay for the new sleep center they are planning - are NOT always based on medical need.

"Good morning- I understand your concerns. XXXX has a large staff of financial people, scattered all throughout the campus, who are able to estimate costs for patients in your situation. It is absolutely true that our clinical staff, including the physicians themselves, have no idea what things cost- but I think that is how it should be. It would be terrible if a physician, knowing something was very expensive, wrongly assumed their patient could not afford it and therefore did not offer it. The complexity of the financial side of healthcare in America makes it necessary for medical facilities to hire dedicated financial people. It would be impossible for physicians to consider cost as well as medical need, simply because of the wide range of insurance options. Our physicians make recommendations based solely on medical need. If I can help you further in the
future please don't hesitate to contact me."

[keroseneburner]

I was stunned at the level of fraud involved with sleep medicine. Having a sleep Dr sell equipment at 3x the price I could buy it elsewhere for outdated and older equipment....and the part I really find interesting is the insurance companies have no problem with it.

[D.H.]

I was stunned at the level of fraud involved with sleep medicine. Having a sleep Dr sell equipment at 3x the price I could buy it elsewhere for outdated and older equipment....and the part I really find interesting is the insurance companies have no problem with it.

Yes, the insurance companies sometimes refuse to pay beyond "reasonable and customary" costs. Unfortunately, these numbers are sometimes set arbitrarily, set at a given time but not updated, or don't take into account special situations. I think more attention to what's legitimate and what's fraudulent would go a long way in reducing fraud.

[amenite]

"Good morning- I understand your concerns. XXXX has a large staff of financial people, scattered all throughout the campus, who are able to estimate costs for patients in your situation. It is absolutely true that our clinical staff, including the physicians themselves, have no idea what things cost- but I think that is how it should be. It would be terrible if a physician, knowing something was very expensive, wrongly assumed their patient could not afford it and therefore did not offer it. ...

So for the situation where there are two treatment options, one very expensive and 90% effective, and one half the price that's 80% effective, or any decision based on efficacy vs cost, who makes that call? The finance guy? Seems like in this individual's economic ignorance scenario of physicians/clinicians not knowing cost, no physician is expected to consider the two factors together. So that leaves the finance people to make medical decisions? Doctors should not know the cost of treatment because there is a possibility that they will potentially make assumptions that will lead them to withhold information? Is that malpractice?

Many years ago I was given a prescription for an antibiotic, and some starter doses in the office (aka "free" samples). The doctor made a point to ask me if I was going to go get the prescription filled before I took any. I said of course I will, thinking to myself that was an odd question, why wouldn't I? When I picked it up at the pharmacy it was clear why he asked, this was like a $120 bottle of pills (not sure what that would be in 2017 dollars, but many times more than your run of the mill Keflex or something). Would a $20 bottle of pills have worked as well? Maybe, probably, who knows - I was never given the choice by the physician who seems to have known in advance what was up.

[EdNerd]

I had a talk with a man I know and trust who manages a local DME. He explained how the insurance companies will tell him what price numbers to put in his contracts with them. Even though the price he could purchase is double or more what he could buy off CPAP.com or Amazon. They have told him, "Either use these numbers, or we won't contract with you." So the insurance companies are doing what they can to maximize their profit. Trickle that down through the doctors, subtract for less than honest scruples, and we often get stuck.

Fortunately for me, my doctor isn't involved in equipment sales and prescribes a decent and current machine, and I can trust my DME (I've known the guy for almost 20 years). The insurance company, on the other hand ....

Ed

[ChicagoGranny]

The complexity of the financial side of healthcare in America makes it necessary for medical facilities to hire dedicated financial people. It would be impossible for physicians to consider cost as well as medical need, simply because of the wide range of insurance options. Our physicians make recommendations based solely on medical need.

It sounds like the bean counters are in control of your doctors.

[chunkyfrog]

Any time a doc suggests a new med, ask for samples.
Any time the Rx is a horrible price, I call the doc and ask for an alternative/generic.
Any more, I carry my Medicare part D formulary to the doc's office.

[linuxman]

I had a talk with a man I know and trust who manages a local DME. He explained how the insurance companies will tell him what price numbers to put in his contracts with them. Even though the price he could purchase is double or more what he could buy off CPAP.com or Amazon. They have told him, "Either use these numbers, or we won't contract with you." So the insurance companies are doing what they can to maximize their profit. Trickle that down through the doctors, subtract for less than honest scruples, and we often get stuck.

Fortunately for me, my doctor isn't involved in equipment sales and prescribes a decent and current machine, and I can trust my DME (I've known the guy for almost 20 years). The insurance company, on the other hand ....

Ed

Strange. My insurance company (Anthem) has very good prices negotiated with their in-network DMEs. They're the same as or even sometimes lower than the online providers. Only downside for me is that they only carry a couple of brands, and are 40 minutes away. I'm not sure what motivation an insurance company would have for intentionally increasing their costs by setting higher contract prices with the DME.

Or am I misunderstanding what you're saying and they do try to get a lower price? If that's the case, not sure why that would be bad thing. Lower prices negotiated by the insurance company mean lower prices for you, both when you're paying toward your deductible and generally via lower premiums. Will the insurance company get more profit? Maybe, maybe not. I certainly hope they do - they're a business and employee people just like any other. Their abilty to do so is of course limited to the extent that they have competion from other insurers and the supply and demand for the services that they offer.

[amenite]

... I'm not sure what motivation an insurance company would have for intentionally increasing their costs by setting higher contract prices with the DME.

If you make the covered cost of the equipment equal to or higher than the open market price of the same equipment you're going to have more and more people opting to go on their own rather than use their "benefits" since the benefits are more costly, more hassle, or both, to utilize. If as an insurer you can effectively pre-empt a chunk of some class of claims I would think you're improving your bottom line. It's not as if people who go on their own and buy their own equipment and supplies are going to drop their health insurance over it. And for those getting benefits through their employer they are likely tied to that plan. Some people might eventually drop a plan that behaves in this way when/if they are able, but of course many cannot.

[linuxman]

... I'm not sure what motivation an insurance company would have for intentionally increasing their costs by setting higher contract prices with the DME.

If you make the covered cost of the equipment equal to or higher than the open market price of the same equipment you're going to have more and more people opting to go on their own rather than use their "benefits" since the benefits are more costly, more hassle, or both, to utilize. If as an insurer you can effectively pre-empt a chunk of some class of claims I would think you're improving your bottom line. It's not as if people who go on their own and buy their own equipment and supplies are going to drop their health insurance over it. And for those getting benefits through their employer they are likely tied to that plan. Some people might eventually drop a plan that behaves in this way when/if they are able, but of course many cannot.

I've never seen that sort of behavior with any insurance I've ever had (and I've had many), but I guess I can't say it doesn't happen at other companies. Quite to the contrary, the negotiated prices are usually drastically lower than the "asking price" (which of course means that asking price means essentially nothing). It doesn't sound like a winning business plan to me, but if you've seen companies doing this (and had a way to actually verify the price was higher than market price), I'll concede the point.

[lwieland11]

Doesn't $4,000+ seem high for a sleep study??

[lwieland11]

And I just got ANOTHER invoice...$350..from a psychologist's office for a polysomnography w/CPAP. What in the world is that?

[LSAT]

And I just got ANOTHER invoice...$350..from a psychologist's office for a polysomnography w/CPAP. What in the world is that?

Most likely for reading the report from the SS.

[ChicagoGranny]

If you make the covered cost of the equipment equal to or higher than the open market price of the same equipment you're going to have more and more people opting to go on their own rather than use their "benefits" since the benefits are more costly, more hassle, or both, to utilize. If as an insurer you can effectively pre-empt a chunk of some class of claims I would think you're improving your bottom line. It's not as if people who go on their own and buy their own equipment and supplies are going to drop their health insurance over it. And for those getting benefits through their employer they are likely tied to that plan. Some people might eventually drop a plan that behaves in this way when/if they are able, but of course many cannot.

Do you own a business? If so, where? I would like to stay as far away from someone who thinks up such scams.

[amenite]

Do you own a business? If so, where? I would like to stay as far away from someone who thinks up such scams.

No I don't, and the owners of that DME I was referred to a few years back - the one that I called shenanigans on - they don't either. They sold out to Apria some months after I dumped them.