Dear Governor Rick Scott,
My wife and I both voted for you. We believe in your ability to make sensible decisions that will make things better. What I am proposing will upset a lot of physicans. But that is only because most physicians have in the past, are currently committing, or are planning on committing Healthcare Fraud.
As a chiropractor, and based on one of your recent signatures, obviously I know that healthcare is an area you seek to improve. The changes I am proposing are simple and revolutionary in healthcare. They EMPOWER THE PEOPLE AS THE WATCHDOGS.
The changes I am proposing would expose and eliminate fraud as we know it and reveal how much bigger healthcare fraud is than anyone imagined.
The Solution seems too simple. But please understand what it will do to fraud. Here it is:
Currently, insurance companies collect premiums and pay partial fees for services to physicians. Physicians, then, are supposed to charge the patients the copayments and deductibles.
My proposed solution without changing any benefits, only changing the way the money flows is:
Insurance companies, who already charge premiums, should also be the ones who collect co-payments and deductibles. They then pay the physicians 100% of the usual and customary fees or negotiated contracted fees.
The rest of this will explain the common scenarios and make sense of how it eliminates fraud and at the same time empowers the people as the watchdogs.
The plan will require a few tweaks such as rules pertaining to signed advanced fee disclosures to the patients. But this will save the insurance companies money because:
- PATIENTS WILL FEAR HAVING TO PAY THEIR CO-PAYMENTS AND DEDUCTIBLES AND WILL GET LESS UN-NECESSARY CARE
- PATIENTS THAT DON’T PAY RISK HAVING THEIR POLICIES TERMINATED
- TERMINATING SUCH CONTRACTS ELIMINATES THE HIGH RISK CUSTOMERS
- INSURANCE COMPANIES WILL GET MOST CO-PAYMENTS AND DEDUCTIBLES BACK
Would This Really Be Fair To The Insurance Company?
Because laws and insurance plans vary from state to state, let me present a scenario for Florida residents. Everyone knows that in Florida, Personal Injury Protection for auto accident victims pays quite well (but no longer as well for chiropractors:) The insurance companies usually talk to their insured prior to them seeking injury care, to establish a claim number, unless they are transported to a hospital in which case treatment is probably necessary.
Imagine you were in a motor vehicle collision and your insurance company called and told you something like this: “Don’t worry Mr. Scott, you can go to whatever doctor you choose. But don’t pay the physician anything ever. We’ll pay the physician 100% of your bills and only charge back to you your deductible, the first $1000.00 dollars, and then 20% of any charges after that; also, make sure you sign a fee disclosure document that tells you how much they are billing for your visit”.
Now, you, the insured knows that a $200.00 visit will cost you $200.00 during the deductible period or $40.00 after your deductible is met! You will realize that it will add up if you are getting therapy 3 times a week for several weeks. Chances are, people will only go now if they really injured. They will only get massage if they need massage. And the doctor won’t be able to say: “you won’t have any out of pocket costs” Or “you’ll never have to pay the deductible and co-payments”.
How Will This Affect The Honest Physicians?
These changes will level the playing field. Suddenly, patients that go to the “free” guys will choose the guy they really want to go to. Also, with fraud decreased, the insurance premiums can probably also decrease. (this is unlikely to happen with the recent changes - only the players changed)Patients will be able to afford better insurance. “Usual and customary” reimbursements can eventually better reflect true usual and customary fees because physicians will no longer be billing so many unnecessary services per visit. After all, billing for frivolous services would create red flags and confusion when the patient asks: “how much will my insurance be charged?”. They ask, of course, because now they will actually be paying the required percentage that the other guy used to waive - and because of the fee disclosure.
Patients will certainly report much more illegal activity now that it directly impacts them. This will weed out, expose, squash, and shut down many of fraudulent “health care” facilities.
Common Frauds in Healthcare:
1. Waiving deductibles and copayments
Some hospitals and medical practices (or likely most) "pay the employees co-payments and deductiles" when they get treatment at the facilities they work at. The physicians bill whatever they want and the employees don't pay anything. This is fraud since the employees might get services they otherwise would not get... since it is not costing them anything.
Physicians will waive copayments and deductibles so their patients can afford care. Sometimes they even give services away that aren't covered - and instead bill for services they didn't actually do. As an example, massage therapy, recently eliminated in PIP and which is rarely a covered service, might be billed as "97140 manual therapy" or even as range of motion exercises. The patients don't report the physicians since the visit didn't cost them anything.
Recently, a potential patient was interviewing me to see if he should switch physicians. He gets regular spinal manipulations, electrical muscle stimulation, and massage therapy. My office is much more convenient for him so he wanted to see how much it would cost him to come to me. After an insurance verification and going over his co-payments, he asked if he would have to pay his co-payment. He went so far to tell me that all the county employees go to the other guy because they don’t have to pay anything to the other guy. He admits that the other doctor over-bills the insurance company, but hey, its free! He did not switch chiropractors, but instead chose the “free” care from the guy that would not make him pay his share. He admits he goes often not because of pain, but just because it feels good.
Physicians will even lie to patients and simply say "you have no out of pocket expenses, You only have a twenty dollar co-payment" or "you’ll never have to pay anything here”. After excessively billing the insurance company, they write off the balance.
2. Reporting higher than appropriate diagnosis codes
Oftentimes, diagnosis terms and the related codes are stretched to a higher diagnosis for the benefit of justifying unnecessary services. The higher diagnosis codes electronically trick the insurance companies software so they miss excessive diagnostic and treatment charges. The terms they use to document in the patients medical charts help justify their medical decisions - just in case their records are ever checked.
In August 2008, my 28 year old wife went to a physician with mastitis. She has been nursing our infant and told the physician she had mastitis. She has had it before. She and I are both health care professionals and agreed on the diagnosis. However, instead of documenting that she had tenderness in her breast, the physician wrote “chest pain” and ordered an EKG. The now risky differential diagnosis (chest pain instead of pain in the breast) justified a comprehensive exam with a medical decision making of moderate complexity. Eventually, he prescribed the not so complex antibiotics for mastitis. However with chest pain on the documents they can do a bigger exam and also perform tests for a differential diagnosis such as heart problems.
Our insurance company was billed $668.68 for the visit. My wife only had to pay an in-network $25.00 co-payment. Just a few hours earlier, we chose to not go to the out of network walk-in clinic because we would have had to pay the entire bill… $100.00 for treating mastitis with a prescription. But to us it seemed more reasonable to pay only $25.00 and go to an in-network “Preferred” Provider and let the insurance pay the difference.
Of course the insurance company “adjusted” the bills. But it was much more than the original $100.00 we would have paid. The complex diagnostic test likely involved paying the physician, lab, and someone to interpret lab tests. Finally, the insurance company will have the administrative costs. But it only cost me 25 bucks. A bargain for me, and why would I complain, afterall, they did do the unnecessary testing that they billed for. It's not like it cost me anything.
3. Physicians billing peoples insurance even though they didn't perform the services nor see the patient.
A potential customer once asked if I needed patients. The guy he goes to gives him money every time he comes in. He thought I might pay him more to have permission from him to charge his insurance whatever I wanted. This mechanic didn’t tell me his name and wouldn’t tell me who he was going to. He only told me: “times are hard, anything to make a buck”.
Certainly you have heard of staged accidents. Doctors will pay as much as $1,500 per fake patient (and, of course, waive the co-payments and deductibles). But after changing the direction the money flows, and with a 1,000 dollar deductible and 20% co-payment, suddenly the "victim" becomes the informant. As soon as they get the first bill from the insurance company for deductiles and copayments with a pending forfeit of benefits and cancellation of policiy for non-payment, the physicians will be ratted out for the set up.
Over the years, I have read plenty of cases where these same frauds were exposed. About 15 years ago, State Farm and the Sun-Sentinel teamed up for four days in a row with the front four pages of the newspaper to expose these frauds. But it didn't stop them. Physcians have billed kids for dental services to Medicaid kids that were never treated. I am confident you are aware of such fraudulent scams that have been exposed.
Unless we make a change, we will never know how bad it really is.
Where To Start
In Florida, PI makes sense. or, choosing a single medicare region as a testing ground for the country could prove wise and provide a platform to work out the bugs on a smaller scale.
Should you have questions, feel free to contact me.
Dr. Michael Haley
Chiropractor, Pompano Beach
cell 954 444-5353
office 954 545-9750