In Part 1 of this Analysis, we discussed the specific and integral parts of Healthcare Finance so all could understand the elements critical to making it work. Let’s detail the “Fix” so we can get started:
- Medicare Part B has an existing fee schedule as does Medicaid. To “fix” healthcare finance, Congress needs to pass a law (enforced and administered through the CMS) requiring ALL insurance companies who wish to remain part of the Medicare Part B Reimbursement system to adopt a private insurance fee schedule that will parallel the Medicare Part B fee schedule long in existence, and agree to NOT balance bill policy holders for any amounts charged above the fee schedule amounts. (See the “Fee Schedule” detail section of Part 1 of this posted yesterday)
- Healthcare Providers will also agree to accept fee schedule payments from ALL insurance companies — Medicare, Medicaid, active and retired military and military family dependent payers, AND private insurance companies — as payment in full for their services and will not balance bill patients for amounts billed which are above the fee schedule allowable amounts. (See “Fee Schedule” detail section of Part 1 of this posted yesterday)
- Hospitals which now are paid primarily under a Medicare Part A plan fee schedule (which is drastically different than Part B and we will not get into today) will be included in the CMS fee schedule requirement to continue to operate in the Medicare system. (Again see “Fee Schedule” detail section of Part 1 of this posted yesterday)
- Most out-patient providers are already involved in the Part B fee schedule system for government payers. They will also be required to adopt the private insurance fee schedule for payment for their services rendered under ALL payer policies.
- Drug companies will be required to enroll in a separate but similar fee schedule system created and administered by CMS as part of the same law passed by Congress.
Will Hospitals, Physicians, out-patient Providers, and Drug companies agree to these requirements?
Of course in the free market system a business typically has the right to set its own operating rules and guidelines, particularly as they pertain to pricing for their goods and services. However, Healthcare is a different and unique beast. There are currently existing issues from time to time with timely and accurate payment by the private insurance companies who are contracted with the Federal and State governments to be claim processors and claim payers for government insured individuals and also for their private insured policy holders. These primarily pertain to timely payment for provided services, accurate payment for provided services, and claim denials and the subsequent appeals process for providers. For this process to work, Congress and CMS would have to assure providers and require insurance companies that payments for ALL provider services will be paid within no more than 45 calendar days of receipt from providers by the insurance companies of accurate and complete coded bills and applicable medical treatment documentation sufficient to adjudicate the validity of each claim. Further, for denied claims, the appeals process for providers must be streamlined so as to resolve claim disputes with providers that provides resolution within 15 days of receipt of secondary data, documents, and/or information by the payer from the provider for each denial sufficient to determine treatment necessity.
Hospitals will balk and fight prolifically to stop implementation of such a system. Why? $$$$$ The billions they make now will be reduced initially. However, market forces of supply and demand in the competitive business environment will over a short time significantly reduce their costs of operations which will offset most of their initial revenue decrease. However, when a business has for years because of NO competition been able to price their goods and services at any prices they choose, they have been able to pile up profits with no regard for their “customers.” Unfairness and greed now drive the healthcare pricing model. Competition with open and public information about services will take care of that. The same holds true for Drug companies. Insured people will actually be able to check prices and know in advance what costs will be.
Guaranteed payment for medical services within these specific times will be mandatory for providers and insurance companies to agree to this system. Insurance companies currently operating as Medicare and Medicaid claims processors, payers, and administrators are handsomely compensated for their services under government contracts. But they all fight government red tape. The payment process to providers must immediately move up to #2 in the Healthcare Reimbursement pecking order barely behind the healthcare provided to patients. Healthcare professionals and institutions are required to obtain initial and continual significant education and certification in their respective fields. The costs to them for this are staggering as are costs for treating patients. Fair and timely compensation MUST be a priority.
In today’s healthcare system, special interest groups continually drive the cost of medical services steadily upward. Those special interest groups are comprised of multiple non profits, lobbying firms and individuals, politicians, and attorneys — all who have built-in objectives for pushing for and against regulations in healthcare, healthcare provider issues, patient issues, facility issues, and even federal and state legal issues. Hospitals have lobbyists that lobby Congress for assistance. Patients have lobbying entities that operate on their behalf like AARP and others that market their services for a price to their “members” — American citizens — who trust these and others to lobby Congress for their specific desires in healthcare. The AARP is one example of hundreds of lobbying entities whose lobbyists “get” face-time with government officials to “sell” their products, ideas, and concepts. Lobbying of Lawmakers and others on Capitol Hill for any and all issues concerning Healthcare Finance must immediately be terminated by law. The massive flow of lobbying dollars that go to influence lawmakers to make decisions on healthcare finance must be shut off. They alone have driven the costs of healthcare to astronomical levels over the last two decades.
Healthcare Tort Reform
This too must be immediately tackled as part of Healthcare Finance reform. We all see and hear the constant 60-second commercials by attorneys, “phishing” for clients as part of “pending” Class Action lawsuits against pharmaceutical companies for complications attorneys claim occur from certain drugs. The same holds true for purported problems with certain medical devices and treatments. The common denominator of these is Litigation. Certainly there are times when litigation for some of these is justified and the responsible entities should be held accountable for harm to patients. But “phishing for clients” on radio, television, the internet, and print media, while occasionally will help a injured person who has no idea what to do, most often simply creates massive malpractice insurance premiums for healthcare providers of all kinds who are punished — not for their misdeeds, but for the greed of attorneys. Many of those attorneys often are not as deeply concerned as it may appear for the injured persons they are trying to reach in those ads. Often they will file suits with no plan to litigate and take a provider or insurance company to trial. They know the cost of litigating a case is high. They will offer to settle, knowing that those they sue understand the costs and will pay up front rather than finance a trial — even when those providers and/or insurance companies know they are right.
How do we fix Tort Reform? By a law, (that does not impact the injured) that sets damages that can be collected from such a lawsuit at “actual damages” with no “punitive damages” paid above “actual.” In fact, some states already have those laws in place. This will pay those injured fairly, but will only pay attorneys legitimate amounts for their services. This in itself will stop much of the senseless and often unethical litigation that has driven the cost of healthcare dramatically higher. And in most of these cases, the attorneys are the only winners, eating up huge percentages of settlement amounts instead of those injured.
What do we do about Medicaid funding?
Simple: for medical treatment providers must accept Medicaid fee schedule payments from insurance companies. But the overall funding of Medicaid must go back to the strict combination of Federal and State funding through block grants. States need to be responsible for their Medicaid patient treatments and provider payments. What needs to change immediately is “Means Testing” for Medicaid coverage. The current system for eligibility is broken. Example: a man and a woman live together but never marry. They have children. Because they are not married, even though he works as does she, if she applies for Medicaid they are immediately covered because eligibility is computed using solely her income but NOT his. The process must be revised based on REAL financial needs rather than social obligation (which is promoted by Democrat Party social politics). If someone truly needs coverage because of income and obligations, it will be provided.
What About Pre-existing Conditions?
The cost for treatment of those in this category will dramatically drop with the institution of the fee schedule system. However, a fund exclusively for this coverage must be created to begin coverage at implementation of this system. Because there is no way to accurately predict what those costs will be, this fund will have to be flexible. One suggestion for the source of funding is to use the billions of dollars collected by the federal government as fines and settlements from corporations and other entities for various violations of regulations and laws. Examples of this are the billions of dollars banks have paid for improprieties in mortgages and breaking other banking laws, chemical companies for environment regulation violations and others that most often under the Obama Administration have been paid to partisan non profit organizations as partisan campaign seeding and “payback” for political support. (This would be another way to “follow the money” in political campaign contributions)
Without this or a similar Healthcare financial overhaul that protects actual healthcare and providers, America will soon be a socialist third-world country — at least in Healthcare. Americans do not deserve that. But any such overhaul will not happen without the stopping of people and entities with their hands in the pockets of Uncle Sam. They are taking Americans’ dollars for corporate, personal, and political purposes that are earmarked for the health and welfare of American citizens. The greatest healthcare system in the World does NOT need to be blown up. Healthcare finance does, using the skeleton of the government/private funding system that is already in place and has worked with dramatic and positive results for decades.
Who can get this done? That’s the big question. The answer? Only Americans who activate themselves and others to educate friends, relatives, business associates, and political representatives to the concept, then push to get it done. There MUST be demands for legislators to immediately instigate the legislation mentioned above (and any other necessary) to stop the lobbying in Healthcare while initiating the laws necessary to structure compliance obligations from facilities, providers, and insurance companies to operate in this scenario. Tort reform goes hand in hand with lobbying termination. It CAN be done. But it will NOT just happen.
Please forward yesterday’s Part 1 and today’s Part 2 of this: “The Only Fix for Healthcare that WILL Work.”