How many times has this happened to you? You're sitting in your office and an employee calls, upset that a health insurance claim hasn't been paid, or has only been partially paid. Whose fault is it? The human resource department's? Rarely. The insurance company's? Maybe. But it could be due to an insidious problem becoming more and more prevalent in the health-care industry--unbundling.
The term is used to describe the practice of charging separately for individual treatments that are naturally part of a larger procedure. And because of the complexities of health care, it can be a particularly difficult practice to discern. For example, removal of the gall bladder--a common procedure--often includes the incidental removal of the appendix. Said another way, an appendectomy is a natural part of gall bladder removal. But more and more often, health-care providers are unbundling the procedure and billing separately for both. When the practice is not caught, unbundling results in a simple escalation of health-care costs.
When it is caught, unbundling can confuse and frustrate employers and employees alike--many of whom assume the problem rests with an insurer's unwillingness to pay the full fare. Truth is, however, the practice of unbundling borders on outright fraud, and insurers are becoming increasingly vigilant in routing it out--which saves employers money, but also can lengthen the claims payment process, upsetting employees who expect quick payment of their doctor's bills.
A Simple Cure
All too often, the key to controlling health care costs is educating yourself and your staff about the processes of responsible benefits management--and the rationale for working collaboratively with your insurer. After all, increasing health-care costs threaten everyone's pocketbook, including the employer's--who ends up paying more in premiums--and employees, who shoulder costs through increasing co-payments and out-of-pocket expenses. Here's a step-by-step blueprint for eliminating the waste of unbundling:
Educate your benefits staff. Most plans are either self-insured, partially self-insured or fed by insurance rates that are based on the plan's claims experience. So the practice of unbundling can play a major adverse role in unnecessarily increasing the employer's cost. That fact must be emphasized to your benefits staff so they understand the baseline rationale for eliminating the practice.
Follow the rulebook for understanding complex medical procedures. The Current Procedural Terminology (CPT) manual lists procedures, as well as other included costs associated with specific procedures. It outlines costs and incidentals typical to all procedures that commonly appear on physician and medical billing by a code that makes it easy to access. In short, CPT provides the game rules that your staff and insurer can use to assure that all procedures and billings fall within the standard.
Learn how to identify when a claim may have been rebundled. The first sign that this may have happened is when a claim is partially denied by the carrier. This may or may not be due to unbundling, and you will need a copy of the employee's explanation of benefits (EOB) to find out why the claim was partially denied. On the claim, you should see an explanation of why the claim was partially not covered or denied. If the message states that the charge is included or considered in the primary charge, then it probably is an unbundled charge.
Rely on your broker, insurance company or third-party administrator to help manage these claims. The closer your relationship, the better the odds are of rooting out unbundling and saving costs for your company. For instance, in the typical broker/client relationship, brokers will often assume that their role is to serve as your advocate in making sure the carrier pays the claim. By working shoulder to shoulder with your broker, you can more easily communicate your need not only for timely payment--but accurate and fair payment as well.
Don't jump to conclusions. An insurance company's delay in paying may not be due to an unwillingness to pay. Rather, the issue might rest on the complexities of rebundling procedures that were consciously submitted separately. The key is to work in partnership with insurers to make sure they're working for everyone's best interests--including protecting your company from fraud.
Choose insurance providers with the greatest abilities to identify potential fraud and/or uncover unbundling practices. Technology is important. Claims processing is an overwhelming information management challenge. Even the best human processors can easily miss the telltale signs of unbundling. Those companies that have automated the process can better analyze data and identify trends that are out of the norm and need attention. Find out which system your carrier or TPA uses to detect and rebundle unbundled claims. How often is the system updated and what is the source of information for the rebundling system? Some software companies, like WLT Software of Florida, have built their own rebundling system with outside consultants, while others use systems built by Ingenix or GMIS. The key is making sure a system is being used, that it is current and that the data source is credible.
Once your benefits staff understands the company's need to control health-care costs through eliminating unbundling, it's time to educate your employees.
Communication is key.
A simple flyer or letter can go a long way toward explaining unbundling, its inappropriateness and how it increases workers' contribution rates. Once informed, employees can serve as foot soldiers in helping to resolve situations, if they should arise with their provider. At the same time, informed employees on the alert for any impropriety will reduce their frustration in dealing with seemingly unpaid or partially paid claims and reduce administrative burdens on your benefits staff.
And finally, let employees know they can fight back directly with their providers. If unbundling is suspected, the employee can easily call the provider and tell them that the charge has already been paid as part of a global procedure. Frequently, the practice will stop right there, saving your company and its employees from facing ever-increasing health-care costs.
Clelland Green is the CEO and founder of America's Choice Healthplans (ACH), an online third-party benefits administrator.
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