Part 1 introduced health insurance and focused on history and overarching philosophy. We will now review the types of insurance and what it means to be in or out of network. We begin with concepts and terminology.
When I studied rhetoric, I learned that mystification referred to the use of special terminology to convince lay people that specialists are more knowledgeable. I found it ironic that the use of the term “mystification” by rhetoricians was an instance of mystification. Nonetheless I find a fair amount of mystification in health insurance terminology.
Let’s begin with the concept of insurance itself. Typically, insurance pays or reimburses for relatively infrequent and occasionally catastrophic negative outcomes that result in loss—auto accidents, fires, storm damage, etc. In contrast, health insurance pays or reimburses for frequent and expected services as well as the less frequent. I’m stating the obvious to point out that healthcare decisions are being made by mostly for profit organizations whose structure and culture is to compensate for loss.
Indemnification is used in the health insurance context to describe insurance policies that protect you from loss due to health related expenses by pre-payment or reimbursement.
In contrast are health maintenance organizations (HMOs). Initially and historically, HMOs maintained your health by providing all necessary medical services. Today, HMOs offer limited or no choice in providers for lower costs.
In a pure indemnification model, you would choose any provider at any time and the insurance would pay or reimburse you. Period. In a pure HMO, your choice—at best—would be limited to providers within the HMO. Furthermore, the HMO would determine whether or not you needed services.
Pure indemnification is rare in private policies. (Interestingly and perhaps tellingly, Medicare is pretty close to pure indemnification. So is Tricare Standard, a policy for active military.) Most non HMO policies have various degrees of choice. In general you pay more for being able to choose.
Let’s look at some key definitions.
In network (sometimes participating). This refers to a provider who has a contact with the insurer and has agreed to accept the contact (allowed) fee as full payment for the various services. If the provider bills for an amount higher than the agreed fee, the fee is adjusted. This adjustment is sometimes called an insurance write-off.
Out of network (sometimes non-participating). This refers to a provider who does not have a contact with the insurer and is free to charge whatever fee they find suitable and appropriate. If the provider’s fee is higher than the allowed fee, the provider may bill for the difference between the allowed fee and their fee. This is known as balance billing.
Now let’s look at insurance plan designations.
In additional to HMO, one of the most common is Preferred Provider Organization (PPO). These allow you to choose either an in network provider or an out of network provider, with greater cost to use the latter. The Point of Service (POS) plan is a variant of the PPO. The difference is that you are required to get a referral to see a specialist.
A variant of the HMO is the Exclusive Provider Organization (EPO) which allows you to choose within the network. While its name sounds similar to a PPO it is a form of HMO.
The requirement for referrals and other types of authorization is called gatekeeper functions.
There are terms referring to payment.
The first is deductible. This refers to the amount the client is responsible for before the insurance will begin to pay. Deductibles may apply globally or they may apply to categories of services. For example, there may not be a deductible for office visits, but there may be one for tests. Deductibles typically only count the insurance share of a reimbursement, making it take longer than expected to be reached. Until a deductible is met, the client is responsible for the full fee.
There are two other ways a client shares the cost of a service. A copay is a fixed amount for a particular type of services. Coinsurance is a percentage that the client pays for each instance of the service. Typically, a client is required to pay either a copay or coinsurance but very rarely both.
There is one time that the insurer gives you a break. That’s when you reach your maximum out of pocket expenditures (MOOP). In that case copays and coinsurance would no longer be required.
One final term that impacts costs are modality specific session limits. These may be hard or soft. Hard limits cannot be adjusted. Soft limits can be increased with varying degrees of difficulty and likelihood of success.
I know it’s a lot of information. Let’s summarize, make a final point, and then take a break.
Today’s health insurance combines elements of indemnification and managed care. All things being equal, costs increase as choice increases: HMO (least cost, least choice), EPO, POS, PPO, indemnification (most cost, most choice).
Deductibles are how much you must pay before the insurance pays anything. Copays and coinsurance are your ongoing share of the cost.
If you are lucky (or unlucky) enough to spend so much money out of pocket you reach your maximum, you don’t have to pay anymore copays or coinsurance for the rest of the plan year.
Keep track of session limits. For various reasons, providers usually don’t.
A final point. Health insurance is a strange 3 party arrangement.
You, the client, have a contract with the insurer. Indeed, you are the insurers customer. In theory, they work for you—their purpose to pay or reimburse for healthcare services.
Your provider also works for you and answers to you. Your provider always works exclusively for you. You are obligated to pay your provider and/or release your insurance company to do so.
Your provider may or may not have a relationship with your insurer. A participating or in network provider provides behinds the scene services including billing, note and plan submission, and other administrative tasks. A non participating or out of network provider need not provide any service other than a statement when you pay. Creative, as a courtesy, currently provides billing, note submission, authorization requests, and so on, promptly and free of charge.
—Richard Feingold, Co-founder
Is transdisciplinarianism a real word? First, let’s see what it means.
The 20th Century brought us many great things. And many challenges. The Newtonian physical theories of both the very large and very small were supplanted by General Relativity and Quantum Mechanics. Nuclear technology revolutionized everything from medicine to power generation to war and peace. Aviation and the automobile transformed travel. Computers have transformed most everything from navigation to entertainment.
Science, technology, and information processing drove material progress and had profound social implications and enormous cultural influence. One of the most unfortunate takeaways of this progress was reductionism—the idea that problems could be solved by reducing them to their most basic constituents.
That perspective was often adopted in healthcare. Specialization dominated. Practitioners isolated symptoms, minimized the domain of interest, and treated. Specialists even specialized within specialties. This was further challenged by a medical model that shifted from health and healing to symptomatic diagnosis and characterization and long term pharmacological intervention.
There was the all too true cliché of seeing clients as personifications of their symptoms. Patients referred to by their issues: “Send in the broken arm.” “When am I scheduled to see the bowel obstruction.” I cringe when I hear someone referred to as a “special needs child.” To me, it is a child with special needs or better, a child with differences.
It’s not political correctness, rhetoric, or semantics. It’s fundamental. We must see the child as a unique holistic human being with differences from typical development that inhibit his or her ability to engage the world, to know themselves and feel good about themselves. We must treat the whole child.
And to treat a child holistically, we a need a single integrated plan of care. The services provided must be driven and defined by the unique needs of the child.
So, how do we do that when there are increasing modalities to learn? more and more knowledge necessary to successfully treat the children we see?
It’s by continuing to learn and work as a team. It’s by meeting every day as a team and remaining focused on the unique needs of the child.
That’s transdisciplinarianism: The perspective, belief, and practice that informed treatment must optimally focus on and respond to the holistic needs of the individual and multiple disciplines are combined, integrated, and harmonized for maximum benefit.
Our practice believes so strongly in this approach that we meet as a team one hour every day. Every day. Each child we see requires, deserves, and receives the benefit of our collective expertise. Each child.
Okay, transdisciplinarianism is not a real word yet. I have faith that will become one. In fact, I just added it to my spelling checker dictionary.
What do you think?
Treatment Denied to Increase Corporate Profits
Fairfax, VA, May 18, 2016—Billie* is a 6 year old child with special needs. According to the US Census Bureau there are 3.7 million children in the United States like Billie. These children suffer from autism, traumatic brain injury, cerebral palsy, attention issues, or any number of conditions that affect their cognitive, social, emotional, and physiological well being. Billie and his family had felt fortunate that they live at a time when there is so much that can be done to help him.
Indeed, until recently Billie was getting effective help at a Northern Virginia clinic. He was improving and he and his family were optimistic. Now he is lost and his family is devastated.
For the 11 months prior to October 2015 his health insurance company had paid for his weekly therapy sessions. Then without warning the company stopped paying.
When Billie’s parents questioned the company representatives, they were told that the clinic therapists weren’t “credentialed,” that its chief therapist’s “status as an occupational therapist was in question.” They were even told that the clinic was “under serious investigation,” yet when they went to the insurance website, the practice was listed as a “preferred provider.” They were also told the claims weren’t “coded correctly” even though the claims were coded consistently—the same throughout the entire course of treatment—and the parents knew from past experience that the claims were coded the same way that they were with other insurers, including strict government programs.
Worst of all, the parents could find no other practice in the insurer’s network that was within geographical reach, provided comparable service, and had availability.
“I don’t understand,” Jack, Billie’s father said. Jack is a long term federal employee who pays handsomely for the “premium” insurance plan. “What the insurance representatives tell me is inconsistent and doesn’t make sense. I spoke to the owner of the practice and he showed me that every one of their therapists is state licensed, board certified, and in good standing. I saw it myself on the state and board websites.”
The practice is Creative Health Solutions and the insurer is CareFirst/BCBS, self-proclaimed as “the largest health insurer in the Mid-Atlantic region.”
“Billie is one of many,” Richard Feingold, co-founder of Creative said. “CareFirst has denied most claims for months now. We can no longer afford to see clients without payment. It breaks our hearts that these children are denied service for no valid reason.”
Because of the issues with Billie and dozens of other clients with similar denials, Creative has taken legal action against CareFirst.
“They’ve retaliated,” Richard said. “CareFirst has an arbitration clause in their contract specifically to keep the action out of court. Yet they are counter-suing our arbitration in federal court. Imagine that, an $8 billion company taking a small practice to federal court because we had the audacity to assert our rights and the rights of our clients.
“They want to put all practices like ours out of business so that they won’t have to pay for the children.
“We can’t let them.”
(*Billie is a composite of over 80 Creative clients affected by CareFirst’s claim denials.)
Few people are satisfied with how health insurance serves us. Issues range from the very political (Obamacare good or bad?) to the very practical (will the insurance pay for my child’s service?)
Philosophically, the purpose of insurance is to protect a group of people from uncertain and potentially costly events. While contemporary health insurance maintains that role in terms of catastrophic medical events, it also has become more and more the manager of our health services.
This trend is problematic and fraught with hazards. Here at Creative we deal with its consequences daily. Many of our clients are constrained and sometimes denied services because of decisions made by administrative and quasi-medical people at insurance companies.
My purpose in this article and others to follow is to help all of us maximize our benefits by knowing the law and asserting our rights, by dealing crisply and smartly with insurance, and by maximizing our benefits and their application.
About 4 decades ago during the Nixon administration, Congress passed two laws that set the stage for our current situation. One took power from us and gave it to insurance companies; one took power from employers and gave it to us. The insurance companies have spent the last 40+ years maximizing their profits from all this. They have also done a good job in keeping us from understanding and asserting our rights.
Beginning with the first HMO enabling act in 1973, Congress allowed and encouraged insurance companies to manage health care. Ostensibly, this was so that they could add efficiencies to the markets and balance rising health care costs with collective purchasing power—all for the benefit of the consumer. Further, there was some consideration to reduce medically unnecessary services through mandatory second opinions and peer review.
The next year, through the passage of ERISA, Congress also put employers on notice that when they promised a benefit—such as medical care or pensions—they had to deliver. While the primary motivation of ERISA was protecting against the severe and increasing problem of employer pension default, the inclusion of medical benefits under its protection was prescient and forward thinking—and of great significance to us today. The passage of Affordable Care Act in 2010 extended ERISA protections to government employees and other plans.
This may be a lot to take in. So let’s make one more key point and wrap up Part 1.
Consider a pension. It’s straightforward. You leave the company and at a predetermined time in the future you start getting paid a certain benefit each month (or some other arrangement). What you get paid is determined by the plan.
The company may hire an insurance company (or a bank or brokerage) to administer the pension. That agent may even subcontract part of their function. All that is fine as long as it does not change the amount or the frequency of the benefit. Indeed, any change would be a violation of their fiduciary responsibility; and if they kept money that should have been paid you, they would be guilty of fraud.
Why spend two paragraphs on pensions? Reread them in terms of medical benefits instead pensions. The same principles apply.
We will discuss this further in Part 2.
—Richard Feingold, Co-founder
During our ongoing difficulties with CareFirst our clients have received many reasons for claims denial. The Explanations of Benefits (EOBs) have a code and short, often cryptic description; when we or clients call we get various explanations. Here’s a sampling of the most popular, along with facts we’ve provided.
185 The rendering provider is not eligible to perform the service billed.
Fact: All Creative therapists are state licensed, board certified, and are in good standing with the state and credentialing authorities.
252 An attachment/other documentation is required to adjudicate this claim/service.
Fact: From September 28, 2015 until early February 2016 Creative provided complete medical records with each claim submitted to CareFirst. Since then Creative will send any requested records as long as we are provided an electronic means of doing so.
M127 Missing patient medical record for this service.
MA130 Your claim contains incomplete and/or invalid information, and no appeal rights are afforded because the claim is unprocessable. Please submit a new claim with the complete/correct information.
Fact: All Creative claims are “clean” and accurate—we have strict internal controls, two person checks, and a practice management billing system that further checks. Every place we’ve seen this denial reason, we’ve seen identical claims (for different dates) that are processed and/or denied for other reasons.
M135 Missing/incomplete/invalid plan of treatment.
M143 The provider must update license information with the payer.
Fact: Creative has submitted license information for all therapists to CareFirst repeatedly, beginning .
N26 Missing itemized bill/statement.
Fact: Makes no sense since the submitted claim is the bill/statement; probably a mistake.
N55 Procedures for billing with group/referring/performing providers were not followed.
Fact: All Creative therapists are state licensed, board certified, and are in good standing with the state and credentialing authorities.
In addition to the above, when clients call CareFirst, they are told a number of things about the claims, treatments, and some of our therapists. Again, a sampling along with the facts.
“Creative Health Solutions is under serious investigation/is being audited/etc.”
Facts: Creative voluntarily agreed to a “Pre-payment Review” beginning September 2015 and continued until February 2016. The purpose of the review was “quality of service” and “therapist credentials.” Despite 1000s of records reviewed and full disclosure of all credentials for all therapists, CareFirst has presented no negative findings to Creative or our attorneys.
“Creative has miscoded claims and/or failed to use modifiers.”
Fact: In support of our treatment model, Creative provides Integrated Services and bills with the correct and appropriate treatment code. All insurers (including CareFirst prior to September 2015) have accepted that code without qualification or modifiers. The code is valid and correct for occupational therapy, speech or physical therapy and is adjudicated by the therapist’s domain of practice.
“Creative is required to submit records with each claim.”
Fact: There is nothing in our contract, in the client contract, or in federal or state law that supports such a requirement. Furthermore, if that is said about claims prior to February 2016, it is simply not true. All claims had been submitted with notes.
“Judy Feingold’s license status is in question.”
—Richard Feingold, Co-founder
Small private practice takes on mid-Atlantic region’s largest health insurer
Fairfax, VA, May 6, 2015—On April 8, 2016, Creative Health Solutions, a Northern Virginia healthcare practice that treats children with special needs, filed a lawsuit against CareFirst, “the largest health insurer in the mid-Atlantic region.” On April 21 Creative followed with a second legal action on behalf of their clients, asserting rights granted by federal law.
“These actions address violations of law and fiduciary responsibility,” Richard Feingold, Creative’s co-owner said. “We are seeking justice for the children and our practice.”
Creative was founded by Richard and his wife and business partner Judy to serve children (and occasionally adults) with life challenges that include autism, attention deficits, Down Syndrome, cerebral palsy, children suffering from abuse, brain injury, other traumas, children born prematurely, children injured at birth, children with fears and anxiety.
Creative and CareFirst had had a good relationship that for over seven years allowed hundreds of children to benefit from therapy. Then last September, for reasons never explained or justified, CareFirst began and continues a series of unwarranted and unprecedented actions against Creative and the children they serve—calling it a “review.”
“Not only has CareFirst illegally denied hundreds of claims affecting over 80 children, but they have on many occasions, reversed claims paid months ago—euphemistically calling this action an ‘offset.’
“They demand medical records but won’t allow us to submit them electronically. They even stopped accepting electronic billing.
“This is baffling. Prior to this review CareFirst had always accepted and strongly encouraged electronic transmissions of claims and medical records and other transactions—as does every other insurer. It’s also contrary to the federal government’s electronic health records mandate which penalizes practices for not using electronic records.”
Despite the cost and administrative burden, for the sake of their clients Creative complied with all demands of the review for 5 months. They continued to see those clients despite escalating claim denials, nonpayment, and retroactive denials and offsets. During that time Creative’s attorney, Richard “Rick” Quadrino, tried desperately to work with CareFirst. For months Judy and Richard believed that CareFirst would ultimately recognize the value and efficacy of Creative’s therapies, the quality of their documentation, and the credentials of their staff.
However, at the beginning of February, Judy, Richard, and Rick recognized that they had exhausted all constructive initiatives. The increasing burden of unpaid claims and unreasonable administrative demands was threatening the health of children Creative treats as well as the solvency of the practice itself. They decided the next steps had to be a lawsuit and other legal actions.
“We founded Creative to be a sanctuary for children with special needs,” Richard said. “A caring, loving, nurturing place providing each child the means and opportunity to reach their full potential; a place of healing and hope.
“CareFirst doesn’t seem to care that the children are losing out. Every day that goes by, every week, every month, the children are deprived of necessary services. It’s a profound injustice.”
Creative Health Solutions is a private Northern Virginia practice that provides integrated therapies for children with special needs.
Contact Richard Feingold, firstname.lastname@example.org, 703-910-5006