The Disconnection between the Medical Professions and Medicare Coverage

Source

My Medicare Bills

Let me start with the fact that I am a Senior who has Medicare coverage for my medical needs.

This is not something that I chose, rather, it was dictated to me by my government. It is a process that yougo through when you turn 65, whether you like it or not.

Well, I was just looking at some of my recent medical statements from Medicare that detailed what they covered and how much they had actually paid.

After looking at the numbers, I saw that there were some amazing numbers listed and I became curious. So, I pulled a few of my older statements and reviewed them to confirm what I was seeing.

My jaw dropped when I realized the extent of the disconnection between what Doctors and Hospitals charge and what Medicare actually considers an appropriate charge for services along with what they actually paid for those services.

Who Accepts Medicare Payments

You should understand that certain Doctors, Hospitals, as well as medical treatment and testing providers are free to accept or not accept what Medicare pays them.

The acceptance of patients who have Medicare as their Insurance provider is not mandatory and when you select a Doctor or other medical service, it is up to you, the potential patient, to check if they are a Participating Provider with Medicare.

Otherwise, you could and most probably will, end up with some very high medical charges billed to you personally.

If they decide to accept you as a patient and have decided to be a Participating Provider of their services, this means that they will accept what Medicare pays them for their services.

Medicare and Social Security Tax Rates

Our Medicare costs us all money every month.

The actual Tax Rates are going up every year along with the tighter restrictions on the benefits. This is one way our politicians are taking advantage of the Seniors of today and the coming tide of Baby Boomers.

We are getting less medical coverage every year and paying more for what we do get.

Medicare Coverage Codes

In case you did not know this, Medicare has evolved a comprehensive set of code numbers for just about every possible illness, disease or physical problem that a Doctor can treat, or procedure that a Hospital or other service provider can perform on a Human body.

These codes are very specific and it takes some intensive training for even the Doctors to assure they use the precise codes that match the treatment, or they could face legal actions by the Federal government.

These codes have specific, allowed charges that Medicare will pay for each of these covered treatments, and the appropriate codes must be assigned before Medicare pays.

Medicare for Dummies 2014

Medicare Payments and Calculations

Let me note that the typical payment by Medicare is 80% of what they call their Approved Rate for each and every specific treatment.

And, we, the patients, are then responsible for the balance between the Medicare approved amount and the actual Medicare payment.

I am sure that you have noticed that, on your bill, the Doctor will often have billed an amount far in excess of what is the Medicare approved charge is for a treatment or service. This Billed Charge, is usually what they would charge for the service for a regular patient that does no have Medicare or other insurance coverage.

Why are the actual charge and the Medicare approved charge so different?

For one thing, the Medicare approved charge was once supposed to be the fair charge for the service supplied. And it was based on typical billing across the nation by many other Doctors and service providers when the system was implemented, and they were all supposed to be adjusted for inflation, actual costs and other factors, over time.

Medicare Prescription Drug Coverage 2014

The Reality of the numbers, today.

One of the problems for all of us on Medicare today, is the radical differences in the numbers, and how this difference is affecting the quality of our health care and treatments.

After looking at a number of my Medicare bills, I think I can illustrate how different the real numbers are for us today.

So, hypothetically, let's say the Doctor charges $1.00 for a service.

Of course, many of the charges to Medicare are approved in full, but there are enough of them that are at the other extreme that I want to mention here, in my example.

What I am seeing, with my bill details at least, is that often Medicare only allows maybe $0.25 for that specific service today.

Now, be aware that this ratio, I am using, is a hypothetical one, just from my seeing a few specific bills, but I do see a difference this extreme in many cases.

So, if in this instance, Medicare has an approved rate of $0.25, then it will only pay 80% of that approved rate or $0.20.The patient, you and I, is then responsible for the other 20% or $0.05.

On the face of things, this looks pretty good for us, the great population of Medicare patients, right? The Doctor or service provider wanted $1.00, Medicare said NO, you only get $0.25, and we, the patient only paid $0.05.

Wow, what a savings!

Great Huh?

Less Service Providers for Medicare

Well no, this is actually bad for us.

For one thing, many of the bills we see submitted by doctors are not $1.00 but are often hundreds even thousands of dollars. And with bills this size our 20% becomes a significant amount of money for retirees to come up with.

Also, I have seen a trend where more and more Doctors either cannot or will not accept payments that are so low for their services. Thus, more and more Doctors and Service providers are refusing to accept patients who have Medicare as their primary Insurer.

And, sad to say, many of the better Doctors are the ones abandoning Medicare patients in droves.

This means that often, our available Medicare providers are not necessarily the best, just the ones willing to subsist on much lower payments and thus, lower profits.

Oh sure, there are still Doctors who feel that they are in their profession to help the sick and the lame as the old saying goes, but we need to realize that Doctors are in business.

In business to make money!


Why are there more Foreign Doctors

And, there is another reality of the Medicare system that we need to recognize and accept as a sign of the times.

If you are old enough, look back to twenty or thirty years ago, and your doctors were fellow Americans. Now, it is not uncommon at all to make an appointment and it will be with a Doctor from another country, operating on a visa.

Why is this?

Well, often these foreign trained doctors can come to America, get a Green card and make many times what they would make in their own country.

And, why not! They have the degree, they have the training. And they get to live in America to a much higher standard of living.

I understand why they are here, and, honestly I guess we should all be glad that they are here to provide us with our treatment at the much loser Medicare pricing.

My question is; How long is it going to be before Medicare doesn't pay enough for even these Low-cost immigrant Doctors?

Why the big difference in numbers

So, let's get back to the numbers. If we ask ourselves why there is such a radical difference in billed and approved numbers, I can only give you two of the most likely causes.

Automatic Updates over Time

Medicare operates on a budget, the same as any government agency. When it, or any agency goes over its budget, its management takes a lot of heat to stay within their budget and the agency is obviously pushed constantly to adjust its expenditures and bring its costs into line with its budget.

But what can it adjust, really?

Well, it can; operate more efficiently, it can reduce its staff, or it can reduce its coverage for services rendered by Doctors and the other Service Providers.

Political Sleight of Hand

Or, it can ask make national news by asking Congress for more money. We all know this isn't going to happen in today's political environment.

Or, possibly, the Cost of Living adjustments to allowed charges can be modified so that certain services actual costs do not increase, over time relative to allowed charges..

OF course, any adjustments to Medicare allowable charges would be driven by our very reluctant and often uncaring Politicians.

Another problem is the politically driven reductions in coverage that they continually attach to other Bills in order to hide from the public what they are actually doing to their health coverage..

One of the beautiful things to watch is when Congress or the President shines its spotlight onto Medicare costs and demands that these outrageous costs be lowered and what they call "Medicare fraud" be eliminated,

With such a public demand, the managers at Medicare must do something.

And what can they do? They can lower "Allowed Charges" in the short term, and freeze them over time..

That's it, Sorry!

And over time the difference between real expenses and allowed expenses spread to the radical differences we often see on our medical bills today.


Get rid of the Waste!

Waste in the medical community is rampant. Here are some examples of what I see when I go to a (non-profit) hospital or even many doctor's offices.

1- Do I need to walk down MARBLE halls to visit a sick relative?

2- Do I need to see original works of art hanging on the walls of the halls of many hospitals?

3- Do I need to look out of windows in waiting areas and hallways that are framed in colored glass designs?

4- Do I need to see expensive pottery sitting on walnut side tables?

5- Do I need to see such waste being charged off as operating expenses, just because they can do this with impunity?

And this list goes on.

I know you have noticed such waste, yourself at one facility or another. And we are all paying for these wasted and frivolous items.

They do not improve our medical care one iota,

How do we fix this problem?

How do we realistically fix this problem with the realities of the actual cost of Medicare with the political butchering that has gone on with the payments made?

Well, the first thought of the average American is to "kick Congress' Butt" and make them repair the system and get real costs covered appropriately.

Sorry again, folks!

Congress can't even control the national budget and get the existing deficits under control so asking them to add more costs to the budgetary problem is not a reality.

What does this leave as a real solution for those of us who are on Medicare today, through no fault of our own, and for the next generation of citizens who are going to need real and efficient medical coverage?

When such a complex problem is thrust before any person, their mind is boggled by the whole situation. But if the problem is dissected and attacked as a number of specific situations that need specific solutions, I feel that the Medicare system can be improved dramatically, over time.

Should it be done by Congress, or the President? My God, NO! We need to keep the politicians out of such a grandiose problem. They have already proven themselves incompetent at keeping the needs of the people as their number one goal.

No, I suggest a new section, under the GAO (Government Accounting Office) that reviews all medical costs, 1-what is charged by doctors and medical services providers, 2-what their actual costs are, and 3- what Medicare approves for these services.

Once this analysis is done, on a one by one basis, and a reasonable profit margin is added, the Medicare approved pricing should be adjusted appropriately.

Then, I predict that you would see more doctors providing better services at lower costs and still making a profit.


Medicare Supplemental Insurance Explained

© 2013 Don Bobbitt

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Comments 14 comments

mperrottet profile image

mperrottet 3 years ago from Pennsauken, NJ

Good article on how medicare pays, and what the cost structure is. I've looked at my bills as well, and the difference between what the doctors want and what they get is tremendous. Medicare seems to pay too little, and the doctors seem to ask for way too much. I like your solution - it would be a good idea to have an outside board look at the situation. Voted up, useful, interesting and sharing.


Don Bobbitt profile image

Don Bobbitt 3 years ago from Ruskin Florida Author

mperrottet- Thanks so much for the read and comment.

I am becoming more and more frustrated with the political perspective that we citizens who were literally forced yto contribute to Medicare for our whole lives with a promise of medical protection are now considered to be the biggest problem with America's Budget.

Every step taken by Congress over the past several decades have been to take what we paid and squander it on dozens of their pet projects.

Now, when we are at the mercy of the system, they want to cast us and the promises made to us aside.

I am ready to organize and fight for my rights!

DON


JamaGenee profile image

JamaGenee 3 years ago from Central Oklahoma

Don, pretty much everything you've said here makes the case for single-payer, (or dare I say it?) Nationalized Health Care. No, hospitals (and many doctors offices) do NOT need to be tricked out like luxury hotels or art galleries and then such amenities charged off to "operating expenses". In fact, it would cost a patient MUCH less to simply check into a luxury hotel for post-op recovery!

The good news is many communities and counties are catching on to this blatant overcharging and implementing their own cost-cutting measures. Working WITh the local medical community as partners rather than advesaries, such programs do NOT diminish the level of care, and in most instances actually enhance it. Steering the poor away from ERs for minor "emergencies" to less-costly neighborhood "wellness" and minor-med clinics, for instance. Providing free annual check-ups so people don't wait until a tumor reaches critical mass and costs tens of thousands of dollars to treat. That sort of thing.

And for the record, those $5 Band-Aids and 4$ paper pill cups hospitals like to list separately? Medicare considers such items part of the room charge. Think about it. If you go to a hotel on vacation, does your bill include itemized charges for the drinking glasses next to the ubiquitous ice bucket, or the TV remote, or the extra roll of toilet paper? Of course not, because you'd refuse to pay for these items if it did.

Medicare looks at hospital charges the same way. They also look at those marble hallways and expensive art as unnecessary "fluff"...i.e. if a hospital board thinks its building absolutely HAS to have them, let them get the money from other (private) sources, not the taxpayers.

Around a dozen other developed countries have single-payer health care, and the quality of care is twice what we have, and for half the cost.

To paraphrase Winston Churchill: 'America always does the right thing - AFTER it's exhausted all the alternatives'. ;D


Don Bobbitt profile image

Don Bobbitt 3 years ago from Ruskin Florida Author

JamaGenie- So good to hear from you again. ANd, WOW, what a response. I loved reading your thoughts on this issue. We Seniors are carrying the load for so many things that are being exploited that it is ard to find a good place to start.

In my old hometown, there is a central Health system that owns ALL of the hospitals as well as many of the satellite services in the area. And, they are quite dictatorial in their response to requests for change and efficiency.

And, they love their perks and luxuries.

Who pays? Well, like you said, Medicare has a good handle on what they pay, but this means that the poor, who cannot afford even basic insurance get the enormous bills and have no defense other than to pay, somehow.

DON


lmmartin profile image

lmmartin 3 years ago from Alberta and Florida

Great article, Don. Okay, I don't have a lot to add to the point in question but, as a health care worker I do have one related (almost) point. Until I moved to the US I had never before seen carpeted hospital rooms and hallways. Before even the most fleeting thought of cost rolled before my eyes, my stomach almost turned over. I KNOW what hits the floors of hospital rooms and corridors and you can NEVER get that stuff out of carpeting. How absolutely disgusting!!! No wonder US hospitals have such a high rate of hospital acquired secondary infections.

Give me the old instituitional blah linoleum floors of the public-funded hospitals of my homeland any day. And yes, in this case marble is preferable to carpet.

Anything is preferable to carpet -- even packed earth!


Don Bobbitt profile image

Don Bobbitt 3 years ago from Ruskin Florida Author

lmmartin- I, myself, have not seen carpet, but I agree that it is the epitome of stupidity, if it is used in a Hospital, any hospital.

Having a number of health professionals in my family, you would blanch at some of the stories that I have heard about hospitals and poor hospital management.

You know there is a problem when a hospital will lay off say 10% of the nursing and care staff, while purchasing even more high-end technical equipment esentially so they can bill more against the average patients insurance.

DON


JamaGenee profile image

JamaGenee 3 years ago from Central Oklahoma

But isn't that how Corporate America thinks...lay off the bottom-rung employees that actually DO the majority of the work (or severely reduce their wages so they'll quit) and at the same time buying another private jet for the CEO to prance around in. Gee, ya think there's a connection between shedding vital employees to "trim the bottom line" and where the money for the jet comes from?

This is one, if not THE main, reason the 1% and their water boys in Congress are so adamantly opposed to the ACA. It'll reduce the obscene profits the health "care" INDUSTRY has been raking in for decades with both fists and force their CEOs and stock holders to suffer the embarrassment of being seen in last year's limo while denying coverage to the truly ill. Oh, the shame!

I've often wondered why these companies and their owners haven't been charged and tried for any number of crimes, starting with false advertising, conspiracy to commit fraud for having no intention of providing the products they claim one's health "insurance" premium will pay for, and last but NOT least, whatever crimes fall under the RICO act for Organized Crime. Just sayin'...


Don Bobbitt profile image

Don Bobbitt 3 years ago from Ruskin Florida Author

JamaGenie- You go, Girl!

You are right about corporate waste and extravagant actions.

But, honestly, it is our own fault with our lackadaisical approach to what Congress is doing, while at the same time the corporations have very large staffs of lawyers who drive change to their benefit.

You and I and our fellow citizens, especially the senior citizens need to start becoming more involved and vocal.

One of my contributions is to write Blogs that should "Piss Off" someone, anyone, enough to stand up.

DON


JamaGenee profile image

JamaGenee 3 years ago from Central Oklahoma

Well, we all just have to do what we can to make sure the make-up of the current "do nothing" Congress dramaticlly changes - for the better! - in January 2015.

Something else that's within the power of every senior taking handfuls of expensive drugs every day is to get on the internet and find out what those drugs actually are and whether taking them is absolutely necessary. My mother was a prescription medicine junkie and after looking up each an every one in a PDF - this was pre-internet - I found that most had been prescribed (or requested by her) to alleviate the side effects of a previously described drug.

Fast forward to the present. An 88-year-old friend had been taking a handful of drugs every day for this and that, and finally had a severe reaction from who-knows-which-one, so she stopped taking them all and after a week or so, she felt like a new person. No longer "fuzzy" and muddle-headed. She did have a few bouts of withdrawal, which is to be expected, but instead of accepting that it WAS withdrawal and nothing more, her doctor tried to put her on yet another pill! No thank you, she said.

I could site other experiences of various friends and realtives, but the point is: Is it POSSIBLE we the people, especially seniors, are simply too trusting when it comes to doctors? Is it POSSIBLE the drug industry WANTS to keep us "fuzzy and muddle-headed" so that we can't THINK clearly, or (heaven forbid!) elect local, state and federal officials who AREN'T in the pockets of BigPharma and Corporate America??? What a concept...


Don Bobbitt profile image

Don Bobbitt 3 years ago from Ruskin Florida Author

Alastar- Thanks so much for the read and the kind words.

Maybe by going on one of myRANTS, I can get a few peoples attention about our complacent and spoiled Congress.

Thanks again,

DON


b. Malin profile image

b. Malin 3 years ago

Excellent Hub Don on a subject that most people of "a certain age" do NOT understand...Having worked in the Medical Field most of my working years, I've seen first hand what the doctors go through, for the CODE BOOK changes and GROWS every year. So many problems, and the government doesn't make it easy on the Patient as well as the Doctors. A lot of GOOD Doctors are retiring out of frustration, they are getting reimbursed LESS and LESS. It's a no win situation for all involved.

I now look forward to Following your Hubs.


Don Bobbitt profile image

Don Bobbitt 3 years ago from Ruskin Florida Author

b.Malin- Thanks for the read and the supportive comment. It really is a hard problem to solve when the government is (seemingly) using documentation complexity to drive more doctors away from the Medicare system which in turn drives the ill elderly to doctors who are over worked, or are running "body processing machines" to make their profits from lower and lower approved pricing.

It is a system doomed to collapse upon itself.

Thanks again,

DON


CraftytotheCore profile image

CraftytotheCore 3 years ago

This is very interesting! A lot of time and research went in to this article. I don't have medicare but my son is special needs. He has private insurance through his father. The pediatrician referred us to a therapist. At the first meeting, my son and his father, and I were all present. The therapist said that the insurance covers her fees but we would have to pay a $15 copay. No problem. She wanted to see my son once a week.

The second time I went back, I was alone with my son. The therapist said there was a mistake with insurance and I would actually have to pay her $130 each visit out of my own pocket. She threatened me in her office and demanded I pay her.

I gave her the money. Then I went home and called my son's father to figure this out with insurance. The insurance company had also paid her. She was double billing.

I immediately filed a claim with the state against her license and sure enough, she refunded me my payment. I found a new therapist.

She tried to say because the bill was $130, but insurance would only allow $65, she decided not to go through insurance. But my son has insurance and it's too bad for her that she signed a contract with his insurance company.


Don Bobbitt profile image

Don Bobbitt 3 years ago from Ruskin Florida Author

CraftytotheCore- You will probably find that you have just seen the tip of the iceburg with Medicare crime. In fact, I have had Therapists attempt to continue therapy far beyond what the Doctor recommended and Medicare pays.

When I have to g to a therapist, I always tell them, immediately that after a couple of treatments, I EXPECT them to train myself and my wife to perform their "magic" on me.

What a crroke world we ive in;

DON

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