Doug Henwood wrote:
> Nathan Newman wrote:
>
> >It is the HMO industry - at
> >loggerheads with the insurance folks
>
> Wait a minute. Don't Aetna and the Prudential (inscos are snotty
> about this - you're supposed to say The Equitable, not Equitable,
> too) have HMOs? Isn't an HMO structurally a kind of insurance company?
>
> Doug
I'm going over my limit but this is how I understand it --
I don't know about Prudential but Blue Cross has HMO plans and PPO plans. Blue Cross contracts with HMOs to provide health care but in the PPO plan you can self direct your care. The HMO plans are cheaper and well you know how they operate with a network of doctors, providers, etc. The PPOs are more costly and allow you to choose your doctor, go where you want for medical care but Blue Cross is the overall insurance administrator for both systems.
Secure Horizons seperates itself from the HMOs so they can claim immunity from any HMO liability. They actually told me that they are not in the business of providing health care, that they were administrators only - but I think they only contract with HMOs. I don't think they offer PPO plans.
Kaiser is a different story. I believe it is the insurer and the HMO all in one.
-- Marta
-------------------
This is part 2. (again none of what follows is directed at the above list members. I is just an excuse to continue the rant.)
Oh, please don't stop here. Let's work out some more of this tangle. There is nothing that precludes any and all of these arrangements from being woven together under the same corporate umbrella, with chinese walls between the different branches--sort of a don't ask don't tell corporate diversification scheme.
Let's start with Blue Cross. They were and perhaps still are the prime Medicare claims processing and administrative contractors for most of region nine. (This contract changes hands between Aetna, Blue Cross and Prudential--unless they've merged or evaporated). Actual claim checks are dispersed by yet another private contractor. Meanwhile, Blue Cross also offers their own health insurance policies to individuals and businesses, one of which is a co-insurance scheme that works in tantum with Medicare.
So, you have Medicare. You go to the doctor and they guess what's covered and what's not. They have to guess because Medicare guidelines are changed monthly, and interpreted by individual Blue Cross service centers. The doctor's billing office or hospital submits a claim which is either approved or denied at 80% of a payment schedule of what is theoretically covered. The payment schedules themselves are the technique used to enforce cost containment policies that come down from federal budgets, congress, and the executive branch. But remember, they pay 80% on that schedule. The other twenty percent just disappears. I suspect this is why the drug companies are afraid of Medicare coverage on prescription drugs. It will mean that the drug companies will suddenly start to feel the same squeeze as public hospitals do right now.
Any way back to billing. If the claim wording isn't coded exactly as expected, or the doctor didn't word the prescription exactly right, the claim is denied. The usual denial justification is 'not medically necessary.' Whether a treatment or piece of equip is obviously medically necessary and was specifically prescribed by a doctor or therapist is irrelevant. What is medically necessary is determined by Medicare, at HICFA (I think), and as interpreted by a particular claims center. If there is a denial, then a co-insurance claim can be filed which follows a different schedule of treatment and payments and these depend of course on a policy by policy basis. This is were the state Medicaid system gets deployed. Medi-Cal is Medicaid in California. If you have both Medicare and Medi-Cal, then Medi-Cal will be the secondary source and requires that Medicare has denied the claim, before Medi-Cal will examine the claim and maybe authorize it. Just because they have authorized such a claim, doesn't mean it will be paid. A third party, reviews these authorizations and then determines if it is a valid authorization or not. This third party (forget the particular contractor's name) then sends checks out, usually divided in parts. The turn around between their notification that they received the Medi-Cal authorization and your bill, and when some part gets paid is 120 days on average.
It is this billing nightmare that accounts of the collapse of emergency and acute care medical treatment in major urban areas with high poverty rates, i.e high proportion of Medicare and Medicaid patients. The hospitals are simply squeezed to death and sell out or get bought out by for-profits or close, period.
Secure Horizons is part of the North Coast Medical Group (I think), and they are a theoretically independent claims administrative contractor for North Cast's consortium of HMO's. They are also their own HMO independently (see chinese wall above).
An HMO puts together the medical service subcontracts with hospitals, physicians, equip and service, and sells those services as its policy. Then the HMO turns around and subcontracts out the authorization process to Secure Horizons, who administers the pre-authorization process to seek the service (is it covered or not, what are the co-pay schedules on this policy for this HMO, etc.). The pre-authorization process is conducted between the service provider (doc, hospital, equip service) and Secure Horizons. The individual recipient is not part of this equation. Payment for services are then handled between Secure Horizons who pre-authorized the requested service, and a third party who actually sends the checks.
You have to wonder exactly what does an HMO do for its cash? Evidently nothing but collect it. Oh, I am sorry. They manage care. Isn't that a charming idea? We wouldn't want unmanaged care would we? Well, so there you have something of the tip of iceberg.
Now to the criminal logic of the system or catch-22. It may not be apparent at first, but this tangle is ideal for fraud. What makes it ideal, is fraudulent claims are the only kind that can follow all the rules and make it to the end to get paid. If you actually did provide treatment or service, then you would have to write an accurate explanation to justify it. But the complex and ever changing treatment codes are specifically designed not to cover as much as possible. That's called cost containment. So in this Milo Minderbinder scheme, only fraudulent claims are paid--if you follow.
In part III (maybe), I'll deal with how equipment manufacturers manage to design their products to match as closely as possible the various insurance schemes and thereby perpetuate a class hierarchy through the wards. What it basically amounts to a kind of capitalist triage. The rich get the best, the poor die early with nothing, everybody else struggles with each other to keep on top of the heap--each against all.
Chuck Grimes