Stanley Feld M.D., FACP, MACE Menu


Dear President-elect Obama : Part 3


Stanley Feld M.D.,FACP,MACE

A huge problem in the healthcare system is mistrust between all the stakeholders. Medicare Part D is one example of abuse to consumers by the healthcare insurance industry and the government.

Physicians mistrust the government and healthcare insurance industry because of delayed Medicare reimbursements. The government outsources administrative services for Medicare claims to the healthcare insurance industry. The government pays these companies for claims processing.

The government states that Medicare overhead is only 2%. The healthcare insurance industry has published an overhead of 15%. Does this mean the healthcare insurance industry overhead without a surcharge is passed on to Medicare? In that case Medicare’s total overhead would be 17%. My guess is Medicare’s total overhead is closer to 20% including an added surcharge.

The vendor for Medicare (the healthcare insurance industry)  in California, Nevada and Hawaii is holding back physician reimbursement. In the late 1980 physicians were promised they would be reimbursed within 10 days by Medicare if they electronically billed. The billing software was provided free of charge and installed by the vendor. Now in California, Nevada and Hawaii there is an unpaid claims backlog of up to nine months.

Doctors across California and in two other Western states are owed millions of dollars in backlogged Medicare reimbursements, leading some physicians to turn away elderly patients and pushing others to the brink of bankruptcy.”

How did this happen? The problem has resulted in a California Medical Association law suit. Law suits only add to the cost of medical care as well as an increase in mistrust.

California is not the only state in which this has happened. It has happened to many physicians in Texas also. I suspect the delay in reimbursement is happening in many other states as the administrative service providers (vendors) try to hold on to the float of the cash as long as possible.

“In the most extreme cases, doctors have not been paid since February. Others are owed hundreds of thousands of dollars. Doctors who serve high numbers of Medicare patients say they are defaulting on rent, laying off staff and begging drug suppliers not to stop shipments. One cardiologist said she’s even resorted to doing the office laundry to cut costs.

“Economic stress leads to mistrust.” This should not be happening as everyone should be working together to repair the healthcare system

“Medicare owes Dr. Tim Ganey and his Bay Area practice of oncologists $750,000 in outstanding claims. He sought grace periods from vendors for his drug payments, but now he’s running out of time. He won’t be able to order more chemotherapy treatments unless he pays his bill.
“The things that we’re dealing with, they’re not elective things,” Ganey said. “They’re pertinent to people either fighting their cancer or being cured of their cancer.”

Physicians are always given excuses when Medicare or Private insurance misdeeds are highlighted. There are two excuses published in this case of delayed reimbursement.

“The holdup is twofold. By May, doctors were supposed to be using a new universal identification number assigned by the Centers for Medicare and Medicaid Services. Without the new number, which is like a Social Security number, doctors can’t get reimbursed. Scores of doctors still waited for those numbers.”

Most physicians are using the new physician identifier (NPI). There was a long delay by the government in setting a deadline for its use because of delays in physicians applying for it . Now most states will not renew physicians’ medical licenses without an NPI. A NPI can be obtained instantly on a government web site. I suspect this point is an excuse.

The second excused presented;

“In September the federal agency switched to a new claim processor for its 90,000 California providers. The move to Palmetto GBA in South Carolina, part of a national effort to reform Medicare contractors, compounded the billing issues and left even doctors who had their universal identification numbers waiting months for reimbursement.”

This does not make sense. If the government was moving to a better administrative service organization (healthcare insurance company DBA ASO) why is this ASO worse than the old one?

“This is just a complete disaster,” said Dr. Dev Gnanadev, medical director and chairman of the Department of Surgery at Arrowhead Regional Medical Center in Colton and president of the California Medical Assn.”

“Rep. Henry Waxman (D-Beverly Hills), whose office was contacted by at least two dozen doctors, called the transition to the new contractor “marred by missteps.””

Nevada has the fastest-growing Medicare population in the nation and physicians there are having the same problem with Palmetto.

“If we’re still dealing with this in January or February, Medicare patients are going to have serious access problems,” said Larry Mathies, executive director of the Nevada State Medical Assn.”

I am sorry. Excuses do not work any more. If the previous vendor was insufficient, why hire a vendor that almost paralyzes the medical profession’s ability to deliver care.

President elect Obama, beware of what your goal is with your national insurance exchange and your plan to expand Medicare Part C in its present form. The healthcare insurance industry is going to be your administrative service provider and the costs of healthcare will continue to escalate. They will control consumers healthcare dollars that the government will be providing and abuse your physician workforce.

It is much wiser to let consumers administer the first $6,000 of the healthcare dollar needed for a family of four and provide real healthcare insurance with the second $6,000 while creating incentives and education in order for consumers to be wise and fugal consumers. Any government subsidies for healthcare system with this design will be money well spent and reduce the cost of healthcare.

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