Kathleen Berg understands the value of having good health insurance. “I don’t want something to happen and bankrupt my family,” she said. The 68-year-old has Medicare and supplements that coverage with a platinum Blue Cross Blue Shield medical plan and prescription plan. Although retired, she works part time as a caretaker to help her afford her insurance. So when she needed to have rotator cuff surgery at Mayo Clinic in January of 2012, she knew that it would be covered. Then the bill from Mayo arrived in the mail with just over $451 left unpaid.
“I think a lot of times people just pay,” Berg said, “but I question everything.” She questioned Medicare and Blue Cross Blue Shield about why they had not paid the bill, and for a time did not receive any answers. “If you [insurance] don’t know why you’re not paying it, how do you expect me to know?” Berg said, as she described the process.
Several months later, she learned that the charges were for medication she received during her three-day stay at Mayo. Most of the pills were the same ones that she took at home. A little more digging, and in subsequent letters from CMS, which oversees Medicare, Berg learned that her surgery had been coded as outpatient by Mayo, and so her appeals were denied.
With all the time spent preparing for surgery, Berg wondered, why didn’t anyone tell her that it was considered an outpatient procedure? She said that she would have brought her own medication if she had known. “I don’t have a lot of money. I’m retired, but I work,” Berg said.
Said Berg, “I hate injustice… We need to develop a plan so everyone does have insurance.” She believes that the Affordable Care Act is a step in the right direction in terms of improving health insurance. “Anything is better than what we have now,” she said, but one of her main questions has to do with medication. Berg asked, “How is this going to affect prescription drugs?”
On March 20 Governor Dayton signed the Minnesota health exchange bill. The health exchange will be an online marketplace where people who are eligible can compare and buy health insurance plans. Its creation comes from requirements in the Affordable Care Act. States can choose to run their own exchange, which is the path Minnesota has taken, or allow the federal government to run it. Some states have opted to have a joint state and federally-run exchange.
Minnesotans can buy health insurance plans on the Minnesota health exchange starting October 1, 2013 with health coverage starting January 1, 2014. Some families will be eligible for tax credits that will help them pay for their insurance plans. The amount of tax credit received depends on family size and income.
The Affordable Care Act made changes to Medicare Part D (prescription drug coverage) to gradually reduce the out-of-pocket expenses for medication. Some Medicare Part D recipients would pay full price for their medication after reaching a limit specified in their plan. Then once they reached a limit for out-of-pocket costs, they had a co-payment for their medication.
Discounts on the cost of medication started in 2011 and by 2020, consumers will pay 25 percent of the cost of each medication. The full price of brand name medications counts toward the out-of-pocket limit, though the consumer pays the discounted price. More information is available on healthcare.gov and in a PDF guide.
The changes to Medicare Part D do not affect Berg’s situation, however. Having exhausted her appeals of the $451 payment denial, Berg has begun paying the bill, but she hasn’t given up yet. “I shouldn’t have to pay for this and deal with this,” Berg said. She has contacted the state Attorney General’s office, hoping that someone can find out why Mayo Clinic considers her three-day hospital stay as outpatient. “Outpatient you usually think is one day,” she said. “When it is three days you kind of assume that it is inpatient.”
Mayo has refused to change the designation to inpatient, she said. (Berg also noted that letters from CMS described her time at Mayo alternately as “outpatient” and “under observation.” An AARP report describes the growing practice of “observation,” which can result in patients owing thousands of dollars.)
A CNN report suggests that hospitals are using the practice in response to Medicare regulations. Mayo provided this email statement in response to inquiries regarding outpatient, inpatient, and observation status:
“Health care providers bill for inpatient, outpatient or observation status based on the Medicare guidelines. At Mayo Clinic, patient admissions are reviewed by clinical staff. We review each case, including extenuating circumstances, to see what status should be applied based on these guidelines.
What can be confusing for patients is that being in the hospital does not necessarily mean a patient is considered inpatient. The severity of illness on presentation may not necessitate intensity of service for inpatient admission based on Medicare criteria.”
It is indeed confusing. “If I was in such good shape, why did they [Mayo] keep me there?” Berg asked. She had heart problems before the surgery and said that during her time in the hospital, her heart was monitored and that it took some time for the pain from the surgery to come under control.
The long process of dealing with Medicare, Blue Cross Blue Shield, and Mayo has been tiring, Berg admitted. “Writing an appeal to Medicare is like bumping your head against the wall,” Berg said. She added, “I can’t believe that in the U.S., we don’t take care of people.”
Berg said that she expects that many seniors on Medicare end up with more expensive bills than her $451 dollars, but that’s partly why she tells her story. She wants others to know to ask questions about the status of their hospital stay—inpatient or outpatient—before they come face to face with a large bill. She also shares her story because she believes that what she and others have experienced simply isn’t right.
Berg explained: “If I can tell you my experience, maybe it can help someone because you feel pretty helpless as [one] person.”
Do you have a health care/insurance story to tell? Email Andrea Parrott or comment below.
Reporting for this article supported in part by Bush Foundation.