Ep 03: Payments and Administrative Burdens

Welcome back to the Let’s Fix It series about the American health care system. I’m Dr. Chris Robertozzi, a practicing podiatrist in Newton, NJ. This podcast will review payments and administrative burdens. There are two payment paths. One is the payment to the insurance carrier for coverage by the patient or the company that pays for part or whole amount of their employees’ health care coverage. The other is the payment to the provider from the insurance company for medical services provided.

It always intrigued me how salaries for any job were determined. I remember when I first opened my office. Two nights a week and on Saturday mornings, Fran typed up all my reports on an IBM Selectric II typewriter. One day when the news came on over the office radio, it was discussing the contract that a sports figure had just signed for millions of dollars per year. The announcer stated at the end that this sports figure could do what other sports figures in his sport couldn’t. Fran looked at me and said, “I don’t get paid millions of dollars for what I do and there aren’t many people who can type 150 words a minute without a mistake.” Fran got me thinking. How do we calculate salaries? How is the minimum wage determined? Was she looking for a raise?

During the pandemic, when individuals were dying who had COVID, health care workers were leaving the field left and right for a good reason. Who would take care of their family if they contracted COVID and died? The increase in salaries did not keep them.

Education isn’t the driver of salaries either. The CEOs of large corporations, sports figures as well as actors and actresses’ salaries are higher than physicians who went through four years of classroom learning beyond college and then anywhere from 3-7 more years of clinical learning in residency programs and fellowships.

Why is it that professionals who make service calls after hours get a shift differential but physicians who get called to the emergency room in the middle of the night to save someone’s life or limb don’t? Why do those who make service calls get a fee for showing up at the site in addition to their fee for time and labor for doing the job while physicians don’t get a fee for showing up for a house call?

For many companies, health care insurance is part of their benefits package. The Affordable Care Act mandated that full-time employees must be given health care insurance. So many companies now hire two part time employees to not have to pay for health care insurance. This provides more jobs but not necessarily with the employee making enough money with the one part-time job to pay their bills. It helps keep down the overhead for the company, which helps them keep their costs down. Inflation is also kept down when prices don’t continually go up. These are the issues that need to be addressed when looking at how to fund health care. How can we do it so it’s affordable for individuals and businesses and pay the providers fairly?

There are areas to focus on that drain money away from providing care for patients. Fraud on every front must be eliminated. It is present with physicians, health care facilities, insurance companies and patients. The filing of frivolous lawsuits must be addressed. This problem goes back decades. President Obama promised the American Medical Association that if they backed The Affordable Care Act, tort reform, the way to correct the malpractice dilemma, would be addressed. However, tort reform was never addressed in The Affordable Care Act. Medical records are in different EHRs that are not linked together. The role of stocks in health care insurance companies must be evaluated. These areas contribute significantly to the high overall cost of the American health care system without improving it.

In general, insurance premiums are calculated by actuaries. They look at the previous year’s expenses, predict what the increase in health care services will be, figure an increase for the following year due to inflation and the increase in the cost of living. This is then divided by the number of policy holders with different plans to come up with a yearly premium.

The American Medical Association has a committee that looks at and sets the relative value units for all their codes. The relative value unit reimbursement rate, which is a dollar amount, is multiplied by the number of units for each individual procedure to get the providers’ reimbursement rate. This is not used by every insurance company. Rather each insurance company calculates its own reimbursement rate. Thus, they set their own fee schedule for physician reimbursement. They vary from insurance company to insurance company and CPT code to CPT code.

For the last several years, health care premiums have gone up while reimbursement to health care providers has gone down. The insurance companies state that they must raise their prices because of inflation and the cost of living. Those same issues affect every health care provider, be it a physician, hospital, etc. So how are the providers doing it? There are several ways they are cutting costs. Staffing is cut back. Staff hours are reduced. Less time is spent with each patient. Benefits are cut back or not paid at the same level as they have been. Raises are minimal if at all. When full-time employees leave, they are replaced by part time employees, so health care coverage and full-time benefits don’t have to be paid by the employer. Physicians are working longer hours without an increase in pay. Unfortunately, none of these improve the quality of care.

An example will shed light on this topic. In 1983 when I opened my practice, a new office visit in my geographic area, CPT-4 99203, paid between $20-$40 depending on the insurance carrier. The minimum wage was $3.35 per hour. A bunionectomy, CPT-4 28296, paid between $2,000-$2,500. Now the minimum wage in New Jersey is $15.13. Code 99203 pays between $60-$128 with the copay or coinsurance. A bunionectomy pays between $400-$700. Minimum wage went up approximately 4.5 times. Then the reimbursement should go up at least that much to maintain the status quo. That would mean that code 99203 should be paying $90-$180. Meanwhile the surgical procedure where the physician must follow the patient for 90 days without any additional reimbursement decreased by 65%-80%.

There is no question that providing top quality health care and staying within a budget is difficult. For us to achieve our goals, multiple changes must be made. If we don’t change, the system will collapse. It is being pressured from every direction. Today’s health care providers want to have a better quality of life in relation to their work life balance. This will undoubtedly help reduce the high burn out and suicide rates in health care. As new technology and better medications become available, there are additional costs to the system for these cutting-edge treatments. The use of WebMD and Google to look up information about diseases many times tends to backfire because they talk about the disease entity by itself. Most of the time, there are other factors that come into play with a treatment plan. Despite the physician’s best effort to explain why the internet solution is not the best, the patient is left with the impression that the physician is not listening because he is not agreeing with them. Yet nothing could be further from the truth. The physician is listening and is trying to get the patient on the road for the quickest recovery. Physician patient relationships are strained because physicians can’t spend the time that they want with the patient due to the many administrative burdens which bring us to that topic. The caring in health care is rapidly fading away. It has become a business which has brought us to be the worst health care system in the world!

The administrative or business side of health care has become a full-time job. Authorizations, predeterminations, referrals, letters of medical necessity, disability forms, appeal letters for denied care take both staff and physician time away from caring for patients. By taking advantage of technology most of these issues can be overcome. Let’s look at authorizations for a procedure or medication. The patient or someone helping the patient should be able to go on the insurance companies’ website, type in the procedure code and diagnosis using the patient’s identification number to log in and not only see if it is a covered service but see what their financial responsibility will be. This is in line with the bill that is in front of Congress called transparency in billing. The patient should know what their out-of-pocket cost will be. Providers and hospitals can’t tell the patient what their out of pocket will be because they don’t have the allowed and paid amounts by the insurance company. Those two figures determine what the patient will pay the provider.

It is common that staff are on the phone for approximately an hour to get one authorization for one procedure for one patient. This is a waste of time and money for the provider as well as the insurance company and it further deteriorates the quality of healthcare by taking away from the patient. Authorizations do not mean the insurance company is paying for the service. However, if the provider does not get an authorization, then the service is not covered. Consequently, the provider must have staff explain this to every patient and make them aware that they may be responsible for the bill. In some cases, the patient is asked to sign an advanced beneficiary notice letting them know that they should be prepared to pay the bill in full. Once again, a significant waste of time and resources.

There are multiple disability forms. Yes, there is an overlap of questions from one form to another. By having one form that can be formatted in the electronic medical record, the time to complete the form can be shortened as the patient information can be pulled through. The rest of the information can be typed or dictated so there are no issues with being able to read what was written on the form. The provider will know what is required before sitting down to complete the form.

The explanation of benefits and electronic remittance advice should also be standardized across the industry. Not only are some of the forms hard to understand for the physicians’ staff but when the insurance company is called it takes several phone transfers before someone from the insurance company can explain it.

These are just some of the more common issues. When the meetings start, a more in-depth evaluation will be performed. It is in everyone’s best interest to be honest about the struggles that they are having so a solution can be reached that helps provide better patient care at a lower price.

If you want a better health care system and think that what I’m proposing will get our country there, then contact the organizations that I will mention and request that they send a representative to the Zoom meetings to start on February 5, 2025, at 4:00 pm EST. They have all been sent an invitation for the proposed collaboration on health care. I will provide the names and phone numbers of the various organizations at the end, but you can see all the organizations and their phone numbers on the website: www.betterhealthcarereform.com. It is appropriate if no one answers the phone to leave a voicemail. A simple statement such as please participate in Let’s Fix It health care reform Zoom meetings starting February 5, 2025, at 4:00 pm EST. Feel free to give your name and any other pertinent information you are comfortable sharing. The listed associations received a letter in December with all the details.

Those who attend will write the health care proposition that will be sent to Congress to make the appropriate changes, whether it is a law or alterations in the delivery of health care. A summary of each meeting will be posted on the website within a few days so you can keep up with the progress and provide feedback. Likewise, the recommended changes that will be sent to Congress for approval will be posted.

The Affordable Care Act took 26 months from the time President Obama took office until it was passed by Congress on March 23, 2010. It was not implemented until January 1, 2014, 45 months later. Our goal is to write the proposal, pass Congress and be implemented in less than six years.

The following are the names and phone numbers of the organizations that need to be contacted to participate in the Let’s Fix It Zoom meetings for health care reform.

American Academy of Physician Assistants: (703) 836-2272

American Association for Respiratory Care: (972) 243-2272

American Association of Nurse Anesthesiology: (847) 692-7050

American Association of Nurse Practitioners: (512) 442-4262

American Chiropractic Association: (703) 276-8800

American Dental Association: (312) 440-2500

American Health Care Association/National Center for Assisted Living: (202) 842-4444

American Hospital Association: (202) 638-1100

American Institute for Medical and Biological Engineering: (202) 496-9660

American Medical Association: (312) 262-3211

American Nurses Association: (800) 284-2378

American Osteopathic Association: (312) 202-8000

American Occupational Therapy Association: (301) 652-6611

American Physical Therapy Association: (800) 999-2782

American Podiatric Medical Association: (301) 581-9200

American Public Health Association: (202) 777-2742

America’s Health Insurance Plans: (202) 778-3200

National Association for Home Care and Hospice: (202) 547-7424

National Patient Advocate Foundation: (202) 347-8009

National Pharmaceutical Association: (480) 405-9291

Thank you for taking time out of your day to listen to this podcast. Please share this with your family and friends and let’s work toward a better health care system for all American citizens. Please contact the organizations and let them know that you would appreciate their participation at the Let’s Fix It meetings so we can achieve a better quality of health care for all Americans and reverse our rank in health care in the world.

Ep 03:

Payments and Administrative Burdens

TRANSCRIPT