My Health Plan Made Me Laugh

April 29, 2014
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Are you serious?

I really like my health plan, Blue Cross Blue Shield of Massachusetts. My plan has generous benefits, customer service is excellent, and there’s a great provider network. I’ve been a satisfied customer for more than a decade.

But every once in a while they send me a letter so ham-handed that I just have to chuckle. It happened this week.

Are you serious?

I really like my health plan, Blue Cross Blue Shield of Massachusetts. My plan has generous benefits, customer service is excellent, and there’s a great provider network. I’ve been a satisfied customer for more than a decade.

But every once in a while they send me a letter so ham-handed that I just have to chuckle. It happened this week.

A family member on my plan needed a fairly expensive outpatient diagnostic imaging test (probably about $2000), so the hospital requested a review from Blue Cross to make sure they were going to cover it. Blue Cross said yes –and that’s really what matters– but the letter they used to notify me about it, especially the second page of it, was bizarre.

BCBS med letter p 1

I’ve clipped off the top of the first page for privacy reasons, but that part included the member’s name and ID number, the hospital performing the test and the name of the doctor. So far so good.

There is some general information about what was authorized and general guidelines about how claims are paid. That’s fine, too.

But then it says, “If you are a PPO or POS plan member” and refers me to the back of the letter. Now I understand this is a form letter, but based on my member ID number, surely they know I have an HMO, not a POS or PPO.

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The second page is where it gets crazy. Blue Cross is trying to keep its costs down by encouraging members to stay in network. Keep in mind this is totally irrelevant for HMO members like me –because HMOs don’t pay for out-of-network coverage — so there’s really no reason to send me this at all.

BCBS med letter p 2

The illustration in the table is really something. It uses an example of a $90,000 surgery done in-network and out-of-network. Bottom line: the member pays $500 for an in-network provider, but a whopping $57,600 for an out-of-network provider after taking into account the member’s $8,100 in co-insurance and $49,500 balance payment to the provider. The balance payment represents the difference between the usual and customary fee of $40,500 and the $90,000 the provider charges.

It’s pretty weird that Blue Cross chose the occasion of its authorization of a $2000 diagnostic procedure for an HMO member at an in-network provider to let me know I’d be on the hook for $57,600 if I happened to have a POS or PPO and have major surgery at an out-of-network hospital.

There’s only one cell I’m actually interested in in that table, the one for what Blue Cross pays the in-network provider. Unfortunately there’s no number there, it just says “negotiated rate.” They reveal their usual and customary fee of $40,500 for an out-of-network provider, but what do they pay the in-network provider? Presumably that “negotiated rate” is a lot less than $40,500. I’d venture to guess it’s considerably less than $32,400, which is the net amount Blue Cross pays the out-of-network provider after collecting the member’s $8,100 co-insurance.

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I’m all for BCBS engaging me to help me understand what things cost and to encourage me to follow a path that saves money and holds down premiums overall. But they really missed the boat by choosing such an irrelevant example.

If they wanted to use this procedure as an opportunity to educate me, they could have explained that I might be able to have the same procedure done by the same doctor in a different branch of the same hospital system for a significantly lower cost to Blue Cross. And they could even offer me a plan that would let me share in some of the savings achieved by making a lower cost choice.

Blue Cross and other health plans are caught in a tough spot. They are making efforts to engage members and to control costs while improving quality, but are hampered by old systems that aren’t up to the task.

I’m hopeful, though, that Blue Cross will catch up in the consumer engagement department. Today I received a brand new “summary of benefits,” a replacement for the old laugher, the “explanation of benefits.” The form is laid out in an easy-to-read fashion and includes a glossary and readable notes. I’ll blog about that form another time.