Who pays for your CAM health care?
- By Dr. Kelly Morgensen
- Published 05/25/2007
The short answer is you do. The long answer ultimately is the same, of course, so maybe the better question is, "Who pays the most for CAM health care?" Surprisingly, many patients with health insurance are likely to pay more for CAM than the uninsured. I can sum up the reason in a sentence; "I thought my plan covered those services!"
Insured's who pay a higher price for CAM usually have a benefit plan that contains "exclusions and limitations" for specific services, or, more occult in the plan language, for specific services when they are performed by a CAM provider. These insured's receive bills from the provider after their insurance plan paid very little or nothing at all, even for so-called "covered services." How does this happen? This is what I've seen: 1) Acupuncture is a covered service when provided by an medical doctor but not when provided by a licensed acupuncturist, 2) Massage is a covered service when provided by a doctor of chiropractic but not when provided by a licensed massage therapist, 3) Physiotherapy services are covered when provided by a physical therapist but not by a doctor of chiropractic.
Insured's also pay more for CAM when they make up the difference between what the provider charges and what their plan actually pays. The "allowed charge" that is adopted by an insurance plan will determine the actual reimbursement to the provider, regardless of the usual and customary fees in the provider's geographic area. In other words, insurance plans adopt their own fee schedule for reimbursement purposes.
So, the financial sting for an insured might play out something like this: "Health Plan" will pay for covered services at 80% of their allowed charge. "Insured" will pay 20% coinsurance to the provider. "Insured" chooses a CAM provider, a doctor of chiropractic, who provides three covered services and bills "Health Plan" $145.00. The fee for service #1 is $72.00, the fee for service #2 is $47.00 and the fee for service #3 is $26.00. "Health Plan" allows $40.00 for service #1. "Health Plan" allows $31.00 for service #2 only when a physical therapist provides it. "Health Plan" allows $20.00 for service #3. "Health Plan" pays $48.00 to the provider, which is 80% of the allowed amount for services #1 and #3, and pays 0% for the excluded service #2. "Insured" expected to pay $29.00, which is 20% of the total bill. "Insured" must actually pay the provider $97.00 to make up the fee schedule difference for services #1 and #3, AND pay the provider in full for service #2 that is subject to exclusion.
Why is the insured still paying more than the uninsured? Because many health care providers offer discounts to patients who pay for services when they are rendered; these are known as self-pay discount and time-of-service discount. The level of discount might range from 10% to 50% of the provider's usual and customary fees. Although self-pay discounts are available to everyone regardless of insurance coverage and, by the way, to the insurance companies too, the uninsured are more likely to pay up front, in order to avoid the backend cost: discounts are unavailable if the fee for service is billed to the patient or a third party payer.
In the previous scenario, if the CAM provider offered a 40% self-pay discount, the insured could opt in and save $55.00. This requires an up-front payment of $87.00 to the provider to be eligible for the discount. Then the insured must submit a copy of the bill to their health plan for direct reimbursement of $45.00 for "covered expenses." Remember, the insurance company is also eligible for the self-pay discount, and they pay 80% of the discounted fees up to the allowed amount. The insured still pays more than expected ($42.00 out-of pocket versus $24.00 coinsurance) and must engage in the paper chase with the insurance company. Is it worth it? Maybe the better question is, "Is your insurance plan really the best value for your health care needs?"
Insured's who pay a higher price for CAM usually have a benefit plan that contains "exclusions and limitations" for specific services, or, more occult in the plan language, for specific services when they are performed by a CAM provider. These insured's receive bills from the provider after their insurance plan paid very little or nothing at all, even for so-called "covered services." How does this happen? This is what I've seen: 1) Acupuncture is a covered service when provided by an medical doctor but not when provided by a licensed acupuncturist, 2) Massage is a covered service when provided by a doctor of chiropractic but not when provided by a licensed massage therapist, 3) Physiotherapy services are covered when provided by a physical therapist but not by a doctor of chiropractic.
Insured's also pay more for CAM when they make up the difference between what the provider charges and what their plan actually pays. The "allowed charge" that is adopted by an insurance plan will determine the actual reimbursement to the provider, regardless of the usual and customary fees in the provider's geographic area. In other words, insurance plans adopt their own fee schedule for reimbursement purposes.
So, the financial sting for an insured might play out something like this: "Health Plan" will pay for covered services at 80% of their allowed charge. "Insured" will pay 20% coinsurance to the provider. "Insured" chooses a CAM provider, a doctor of chiropractic, who provides three covered services and bills "Health Plan" $145.00. The fee for service #1 is $72.00, the fee for service #2 is $47.00 and the fee for service #3 is $26.00. "Health Plan" allows $40.00 for service #1. "Health Plan" allows $31.00 for service #2 only when a physical therapist provides it. "Health Plan" allows $20.00 for service #3. "Health Plan" pays $48.00 to the provider, which is 80% of the allowed amount for services #1 and #3, and pays 0% for the excluded service #2. "Insured" expected to pay $29.00, which is 20% of the total bill. "Insured" must actually pay the provider $97.00 to make up the fee schedule difference for services #1 and #3, AND pay the provider in full for service #2 that is subject to exclusion.
Why is the insured still paying more than the uninsured? Because many health care providers offer discounts to patients who pay for services when they are rendered; these are known as self-pay discount and time-of-service discount. The level of discount might range from 10% to 50% of the provider's usual and customary fees. Although self-pay discounts are available to everyone regardless of insurance coverage and, by the way, to the insurance companies too, the uninsured are more likely to pay up front, in order to avoid the backend cost: discounts are unavailable if the fee for service is billed to the patient or a third party payer.
In the previous scenario, if the CAM provider offered a 40% self-pay discount, the insured could opt in and save $55.00. This requires an up-front payment of $87.00 to the provider to be eligible for the discount. Then the insured must submit a copy of the bill to their health plan for direct reimbursement of $45.00 for "covered expenses." Remember, the insurance company is also eligible for the self-pay discount, and they pay 80% of the discounted fees up to the allowed amount. The insured still pays more than expected ($42.00 out-of pocket versus $24.00 coinsurance) and must engage in the paper chase with the insurance company. Is it worth it? Maybe the better question is, "Is your insurance plan really the best value for your health care needs?"
