- Health Care, Drugs & Insurance
The Disconnection between the Medical Professions and Medicare Coverage
The popular medical symbol
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 medicare tax charges are going up every year along with the tighter restrictions on the benefits everyone receives.
This is one way our politicians are taking advantage of the Seniors of today and the tide of Baby Boomers using the system now.
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.
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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.
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!
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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