Paying for Cancer Care – Types of Health Care Coverage
Paying for cancer care is in many respects different from paying for a single illness or a health event, such as an operation. Care extends over months, usually years, and involves many different doctors at many different times. Many different types of treatment are needed: diagnostic tests and biopsies, surgery, radiation therapy, chemotherapy, nutritional and physical therapy consultations, and management of other medical problems. Newly diagnosed cancer patients are suddenly confronted with critical questions about their insurance coverage. Paying for this type of medical care is especially complicated. Managed care has introduced new rules and methods of operation. There is a new vocabulary of words and initials that are confusing even to health care workers. And the vocabulary changes every year!
The insurance industry—both public and private—has its own policies, guidelines, and methods of payment specific to cancer care. Each company’s rules may be different. It is important for you to understand how your insurance company’s payment system works so that you will get the care you need at a cost you should be able to pay. It is especially important to know your policy restrictions. For example, you should know how your insurance plan deals with investigational therapy, or with consultations or second opinions that are “outside the system.”
Group health care plans are often available through employers, labor unions, and other associations. As a rule, group plans do not discriminate against preexisting conditions, including cancer. Individual (nongroup) health insurance plans are also available. In contrast with most group plans, individually purchased plans almost always preclude or at least limit in some way coverage for preexisting conditions. Some individual plans reject people with serious preexisting conditions.
As a cancer patient, you are probably uncertain and unclear about the scope of your coverage, as well as about how you can obtain the benefits you are entitled to under your insurance contract. Not being fully informed can put you at great financial risk. You may end up paying for services that should have been covered by your insurance. In your plan booklet, there will be a telephone contact, for questions about coverage. If you have any uncertainties or questions, be sure to use this service. It helps to keep a written record of persons/dates/facilities where aspects of care have been approved or authorized, or when discussions were held about insurance matters and coverage.
Types of Health Care Coverage
There are many types of payment plans, insurance plans, and medical groups:
Medicare This government-sponsored health insurance program is for people aged sixty-five and older. It also covers people who are permanently disabled, provided they have received Social Security disability benefits for at least two years.
Medicare is divided into the following parts:
• Part A—Hospital Insurance This part of the program covers your inpatient hospital stay, limited skilled-nursing care, part-time home health care, and hospice care for those who are eligible. It is available without payment of a premium, although some services require a deductible or co-payment. Medicare Part A is administered by the Health Care Financing Administration (HCFA) through insurers called intermediaries.
• Part B—Medical Insurance This part of the program covers physician services and hospital outpatient care, such as blood transfusions, X-rays, and lab tests. There is limited coverage for medical equipment such as wheelchairs and walkers. Enrollment is optional, and the payment of a premium is required. Medicare Part B covers 80 percent of allowed charges. You are responsible for the other 20 percent of allowed charges, called coinsurance. You must also meet a yearly deductible before Medicare Part B coverage applies.
Medicare Part B is directed by the federal government through the HCFA and is funded through a monthly premium, which comes out of your Social Security check. It is administered through contracts with insurers (called carriers) throughout the United States.
• (Part C, or Medicare Advantage, is an alternative to parts A and B and will not be discussed here.)
• Part D—Prescription Drug Coverage Beginning in 2006, Medicare Part D was implemented. This is a method of delivery and payment for prescription drugs, designed to replace previous prescription payment plans in which the plan (e.g., Medicare Part B) included prescription medications. Medicare Part D separates the drug delivery and costs, and consumers are given the option of selecting one of a large number of prescription drug plans, each with its own features, coverage, inclusions, and exclusions. This is an extremely complex decision process, and Medicare recipients have public and private sources of information and guidance available to them, to assist them in the process of Part D–plan selection. In this regard, some of the important decisions involve, for example, the specific prescription drug formulary that is part of each plan—i.e., which drugs are covered at minimal rates and which require a significantly greater copayment. Another focus of plan selection involves a gap in coverage, between $2,251 and $5,100, called the doughnut hole, in which payment for drug costs is absent, limited, or paid-in-full, depending on the specific plan chosen. Since Medicare Part D is brand new, we expect that major revisions and hopefully simplification will allow Medicare participants to logically and reasonably select a plan that is optimal for them, without the need for extensive “research time” and consultation regarding the process of plan selection.
If you need additional information, as well as a free handbook describing the Medicare program, contact your local Social Security office.
Medigap This insurance is sold by private carriers and traditionally covers the 20 percent coinsurance you are responsible for under Medicare Part B. Federal law stipulates that there be only ten standard types of Medigap policies available (A through J). These policies vary widely in their scope of coverage. You should thoroughly familiarize yourself with the particular Medigap policy you are considering purchasing, so that you will have the coverage appropriate for your situation. Some of the plans cover prescription drugs, with varying deductibles and co-payments, but prescription coverage is now available only if you are already enrolled in a Medigap policy and are not enrolled in Medicare Part D.
Medicaid This is a joint federal- and state-funded program for low-income individuals. It provides coverage for inpatient care, outpatient services, diagnostic testing, drugs, skilled nursing facility care, and home health care. Each state has its own rules about eligibility for the Medicaid program. Your local social service or welfare department is the best place to obtain information about Medicaid.
QMBE This is the Qualified Medicare Beneficiary program, in which the state pays coinsurance and premiums for certain low-income Medicare Part B beneficiaries even if they don’t qualify for Medicaid.
Traditional Indemnity Insurance Sometimes called major-medical coverage, this type of insurance is sold by numerous private insurance companies. It is the most common type of insurance coverage for people not eligible for Medicare or Medicaid. Such insurance plans typically pay the usual fee for service each time you see your doctor. There is usually a deductible and/or co-payment associated with traditional indemnity insurance. This means, for example, that you might pay the first $250 or $500 in covered charges each year and/or pay 10 or 20 percent of all fees. There may be limits in the policy (a maximum dollar amount that will be paid); these often apply to hospital room and nursing costs and to treatment for psychological problems. Commonly, reimbursement to a physician is based on the “usual and customary” amount, not on the physician’s actual fees.
An employer will often have a plan for general insurance coverage for each employee.
Managed Care Plans Managed care usually requires individuals either to pay a fixed fee for a certain set of services or to see only certain physicians, who have agreed to discount their fees for particular services.
There are many variations of managed care plans:
• Health Maintenance Organization (HMO) An HMO is a prepaid health plan that requires you to use a specific network or group of provider physicians, hospitals, and labs. For a fixed fee each month, HMOs provide care specified by your contract. This care may or may not be all-inclusive, so it is important to read and understand the contract of your particular HMO. For instance, although most do, some HMOs have no outpatient prescription drug benefit. In an HMO, you are usually required to select one physician as your primary or family doctor. This individual coordinates all of your care.
Examples of HMOs include Kaiser Permanente, Cigna Health Plans, and Blue Cross HMO plans. HMO members aged sixty-five and older should remember that the HMO plan replaces Medicare coverage, and you must stay within your HMO plan in order for your claims to be paid by Medicare.
• Preferred Provider Organization (PPO), Exclusive Provider Organization (EPO), or Independent Practice Association (IPA) Traditionally, PPOs, EPOs, and IPAs are groups of physicians and other participating providers who have agreed to offer a discount from their usual fees in order to participate in a particular group. Such groups function as “old-fashioned private practices” in that the physician or other provider receives a fee each time a service is performed or each time you see the physician. There are usually deductibles and/or co-payments for which you are responsible. You do have a choice of using providers or physicians who are not in the plan, but if you do, you will have to pay a larger portion of the cost.
What Does Your Plan Cover?
Your health benefits manual, your insurance representative, or the health plan manager at your place of employment should be able to answer the following questions. Because cancer treatment can be quite expensive, it is absolutely essential for a cancer patient to be totally familiar with both the benefits and the restrictions of his or her coverage. Here are some key questions to consider:
• What is the effective date of the policy? In other words, when does your coverage begin?
• What is your deductible? This is the amount you need to pay before your insurance plan starts paying the rest. Only medical care received as a benefit under your policy is calculated against your deductible. Noncovered services that you pay for do not count toward the deductible.
• Do you have a stop loss? This is the annual amount you must pay out of your own pocket before your insurance pays at 100 percent. Stop losses can be very beneficial where diagnosis and treatment are expensive.
• What percentage of billed charges is paid by your insurance? Some policies pay 80 percent or 90 percent of some costs but pay only 50 percent of other costs.
• Do you have coverage for home care, nursing visits at home, private duty nursing (twenty-four-hour care), and care at a skilled nursing facility or convalescent hospital?
• Do you have coverage for custodial care? Most insurance companies cover only skilled care. Custodial care—such as housekeeping, bathing, doing laundry, and providing assistance in getting to the bathroom or in preparing meals—is not usually covered.
• Does your plan cover hospice care?
• Does your insurance provide coverage only if you go to specific providers?
• Is a referral or a plan authorization required for doctor’s visits, hospital admissions, or outpatient testing?
• Are there any waivers that would preclude payment for treatment for your condition? This might include prior treatment (within one year, for example) for the same or a similar condition.
• What is your lifetime maximum? This is the maximum benefit your insurance will pay in your lifetime. It can be $25,000 or $1 million or more.
• How do you get care after hours or in an emergency?
• If you have group coverage through your employer, does coverage end if you are fired or laid off? If so, is there a way to continue coverage? Ask your employer about COBRA [Consolidated Omnibus Budget Reconciliation Act of 1986], the federal law that requires certain plans to extend your group health coverage up to eighteen months after you are terminated from a job—though you must usually pay the entire premium yourself.
Why Claims May Be Denied
Even though your policy may appear comprehensive, denials for medical care claims are common. Sometimes a denial reflects only a practical problem—say, missing information or incorrect documentation. Sometimes the policy does not cover certain types of care. This is often a matter of interpretation. If this is the case, you will need to advocate with your doctor or other health care provider to establish that your care should be covered even though the insurance company’s agent interprets the policy as appearing to exclude it. A rundown of common reasons for denial follows, along with recommendations for responding to the denial.
Preexisting Condition Your claim may be denied if your medical condition existed before you became eligible for or bought your policy. Be absolutely sure about how your particular plan interprets the term preexisting condition.
Noncovered Benefit Most policies have a section that lists illnesses or services that are excluded from coverage. Because of the possibility of noncovered benefits, it is a good idea to check your insurance plan before any treatment or tests are ordered. Some treatments are covered only when given or administered in the hospital, for example. In such cases, you or your physician’s office may be able to make arrangements for outpatient coverage in lieu of hospitalization. Services may actually be cheaper that way.
Not an Authorized Provider Many insurance plans require that you use providers who are part of their network. Seeing a specialist usually requires that you be referred by an authorized provider for a consultation and for all subsequent treatment. Failure to go to contracted providers with a written referral can result in a complete denial of payment for all treatment provided.
Investigational Treatment Virtually all health insurance plans cover standard cancer diagnosis and treatments (e.g., chemotherapy, radiotherapy, surgery), but many insurers will deny claims deemed to be investigational (experimental), unnecessary, or inappropriate. While there is no guaranteed way to prevent denial of such a claim, make sure that you attempt to receive preapproval in writing for the treatment from your insurance carrier. To do this, you should have a “letter of medical necessity” from your physician documenting that the proposed treatment is medically appropriate, along with supporting clinical literature and a full description of the procedure or services to be provided. The anticipated cost and duration of the treatment should also be included.
Off-Label Treatment Your insurer may deny a claim if the drug your doctor has prescribed is used for any reason other than its labeled indication or the use listed on the drug company’s package insert. The claim may also be denied if the drug is used in a new dosage or according to a new schedule, given by a different route, or combined with other drugs.
You should be aware that fully half of all uses of cancer drugs are not those listed on the official package insert or label. Such uses reflect advances in cancer treatment that occurred after the drug was released onto the market and are in fact the ordinary, proper, and accepted uses of such drugs. Not to use certain drugs for established “off-label” uses may be inappropriate.
When your health insurance plan uses “Drug use is off-label” to deny a claim, it is very important to appeal this denial to the insurance carrier. Such denials are usually reversed, especially if the use of the drug is standard in the community and is a necessary and effective treatment for your illness. Most pharmaceutical companies will provide reimbursement “hot lines” to provide assistance. Your oncologist’s insurance or billing staff is usually familiar with ways to help you with this problem should denial occur. In many states, cancer physicians have formed organizations to advise insurance companies about effective new treatments for cancer, especially established drugs in off-label use.
Nonpayment of Premiums It is very difficult to obtain another insurance policy once you have a preexisting condition. Make sure that premiums on your current policy are kept up-to-date to ensure that your insurance policy is not canceled.
You must bring proper insurance plan identification on your first visit to your oncologist’s office. Your insurance provider—whether it is Medicare, Medicaid, a PPO, an HMO, or a private indemnity plan—should give you an identification card. This card will have your subscriber identification number (often your Social Security number), group number, office co-pay amount, and the address to which any claims should be submitted. If your insurance does require submission of a claim form, also bring a fully completed and signed claim form to the office.
Always inform your physician’s office of any changes in your address, phone number, or employment or insurance information. Notifying the office immediately will prevent unnecessary delays in claim submission, avoid the need for resubmission, and reduce possible denials of payment. It will also result in quicker payment of claims.
Your physician’s office will submit the claim for some plans. This may also be true for hospitals, laboratories, and other kinds of service providers. Most oncology offices have an insurance or finance department. Their patient representatives will explain the billing procedures to you before you begin treatment. Find out whether they will submit your claim or whether you are expected to submit the claim yourself.
Always request a copy of your charges, which should include an itemization of all services and the diagnosis (including its code), for your visit.
Common Terms and Abbreviations
To better understand the procedure for submitting and processing claims, you should understand the terms and abbreviations used by most insurance carriers. Here are the most common ones:
• ICD-9 (International Classification of Diseases, 9th Edition) Code This code identifies your illness. All claims submitted to your insurance carrier will require the correct code. Carriers will not pay your claim if this code is not provided.
• CPT (Current Procedural Terminology) Code This code identifies the medical, surgical, and diagnostic services rendered by your physician. It is used by most insurance carriers to identify what services were performed. Claims are paid using these codes.
• Deductible This is the amount you have to pay before your insurance starts paying the rest. Only received medical care that is a covered benefit under your policy is counted against your deductible. Noncovered benefits, which you must pay yourself, do not count against your deductible.
• Co-payment This refers to the amount of your bill that you are responsible for. The co-payment is usually a specific dollar amount rather than a percentage of the bill. Prescription drug programs, for example, often have a co-payment, usually a fixed dollar amount per prescription. Co-payments are generally associated with HMOs.
• Coinsurance This is the percentage of the bill you are responsible for after you have met your deductible. If your policy has a $100 deductible and a 20 percent co-insurance, for example, you would pay your $100 deductible and 20 percent of all covered expenses. You are also responsible for paying for all services not covered by your policy. Coinsurance provisions are most commonly associated with PPO-type plans.
• EOB (Explanation of Benefits) This is the statement you will receive from your insurance carrier when your claim has been paid. It will show the provider of services, the place of service, and how the benefits were paid. If you have a deductible or coinsurance, this will also be stated on your EOB. If you have a secondary insurance carrier, that company will need a copy of your EOB in order to pay its portion.
• EOMB (Explanation of Medicare Benefits) This statement, similar to an insurance carrier’s EOB, is sent to you as soon as your claim has been paid. It will state the provider of any service, the amount allowed under Medicare’s fee schedule, the amount paid, and what charges were applied toward your deductible. If your physician is a Medicare provider, the check will be sent directly to his or her office. Similar to above, you will need this explanation of Medicare benefits in order for any secondary insurance carrier you have to pay its portion.
• Assignment of Benefits This is required by most physicians’ offices. It means that you give written permission for your insurance company to send payments directly to the service provider. An assignment-of-benefits form is usually provided by the physician’s office for you to sign. There is also a place for your assignment-of-benefits signature on your claim form.
• Medicare Assignment Any physician may accept the fee schedule set by Medicare in an individual case. A participating provider in the Medicare program has agreed to always take the set fee schedule (“assignment”). If your physician takes Medicare assignment (fees), you are then responsible only for noncovered services, for your deductible, and for your coinsurance. However, if the physician is not a participating provider in the Medicare program, it is possible for you to end up being responsible for more than the 20 percent coinsurance. If the physician’s charge is more than the Medicare allowable charge, for instance, the physician will receive only 80 percent of the Medicare allowable fee, while you will be responsible for the entire rest of the bill. So if you are eligible for Medicare, make sure you ask ahead of time whether your physician participates in the Medicare program and will accept assignment of Medicare benefits for your care.
• UCR (Usual, Customary, and Reasonable) This is the fee determined by your insurance carrier to be the usual fee charged for the same service by the average provider with similar training in your geographic area. This may be different from the fee your physician charges.
• Pre-authorization This is a requirement by your insurance carrier that certain services be authorized before the services are rendered. If your insurance contains this requirement, make sure your physician’s office is aware of it.
• Superbill This is a standard itemized “checklist of services” in widespread use. It will contain all the required codes (CPT and ICD-9) that will enable you to submit your claim.
• COB (Coordination of Benefits) When you are enrolled in two separate group insurance plans, those plans will coordinate their benefits so that your claim is paid at no more than 100 percent of the covered benefits. If you have more than one insurance plan, make sure you notify your physician’s office so that the office can submit both claims for you.
New Ways of Paying for Medical Care
Our society is engaged in a great effort to reform the health care payment system. For example, despite all the numerous types of health insurance and managed care, many Americans have no health coverage.
There used to be only two players in the system: the doctor and the patient. Now there are several others: the health insurance industry, various federal and state regulatory agencies, employers (who often provide employee health care plans), and the federal government. New rules and regulations are being proposed and implemented that will change the basic concepts and practices of health care.
The patient’s need for skillful, dedicated, and considerate care by the physician has never changed. From the viewpoint of the physician—now called a health care provider—what has changed is that
1. other parties and agencies have taken over some of the decision making that used to belong to the physician alone, and
2. consequently, physicians and hospitals and their staff must now interact continually with these other decision makers.
Many decisions now require outside approval. These can include the decision to hospitalize, where to hospitalize, which consultants may be called, what types of treatment may be used, and, especially, how health care resources are to be allocated and provided. Requiring authorization before ordering tests and X-rays is just one example. Many doctors’ offices now have more people handling insurance than they have nurses. Physicians will need to be increasingly accountable to outside agencies.
Managed care is one common term used to describe a coordinated effort by physicians, hospitals, and insurers—also called insurance payers—to create an optimum balance between incredibly sophisticated medical technology on the one hand and our inability as a society to afford paying for every possible treatment and diagnostic test for every person in every situation on the other hand. The clinical practice guidelines now being developed by various cancer centers and scientific organizations—e.g., the American Society of Clinical Oncology (ASCO) and the National Cancer Comprehensive Network (NCCN)—and by various insurance carriers will probably become increasingly important in how services are provided and covered.
Because the patterns of delivering and monitoring health care are complex and changing and because new payment systems are being created, it is absolutely essential that you completely understand the provisions of your health insurance plan. With increasingly expensive tests and treatments and more and more controls over payment for medical care, your best insurance is to completely understand the provisions of your own insurance.
In this rapidly changing medical world, there will have to be a greater effort and understanding by all the participants in medical care—the patient, the physician, the health care team, and the governmental/insurance payers—to provide cost-effective, state-of-the-art health care.