It has been reported that the insurance industry has a 20%-30% overhead.. basically that overhead is juggling the paperwork in prior authorizations (PA) and coming up with reasons not to pay a claim and/or defending their their decision if/when the patient files an appeal… It is also reported that the Medicare part A/B carriers have a 5% -10% overhead in processing claims..
The Medicare process has an appeal process …called an Administrative Law Judge.. It is a pretty straight forward process and typically > 50% of the people who file an appeal of denial of service payment, is ruled in their favor and most/all of Medicare covered services has a pretty precise qualifications in what criteria has to be met to have a covered service paid for. If the vendor believes that the service is not going to be covered… you have the patient sign a wavier of liability .. informing them that they accept the fact that they are being provided a non-covered service.
If a vendor on a particular day.. does not want to accept an assignment .. due to cost of product/service vs allowed reimbursement they have that option.. patient pays cash and the vendor submits the bill to the Medicare carrier and if it is paid.. the patient get the reimbursement check based on what is allowed.
According to published reports ESI/MEDCO NET PROFIT is ~ 2.5 Billion.. and that is reportedly 40% of the market.. meaning that the the PBM market place’s net profit is SIX BILLION DOLLARS…
What if we had a prescription payment process like that of Medicare Part A/B… if we could knock off 10%-20% of the insurance industry’s overhead devoted to Rx reimbursements and cut the PBM middle man out of the process… after all their basic process is not much more than MC/VISA/AMEX..
The patient would pay us our usual and customary charges… there would be established step therapies and the criteria that marked a failure of one step to move on up the step therapy ladder.. If the patient had a high per-cent of generic utilization their insurance would pay them 90%-100% of their medication expenses… with email and electronic payments (ACH).. the cost to the insurance industry would little/nothing.
If the patient insisted on all brand names or refused step therapy their reimbursement would be as low as 10%-20% of the amount billed. After all .. it is THEIR INSURANCE… we are just a vendor/supplier of services.
If the patient is unhappy with the amount they are being reimbursed… or we can offer to do a comprehensive MTM up front – for a fee – or they see how little they are getting reimbursed.. to reduce their costs… increase their generic utilization… increase the per-cent their insurance pays them back… free market place forced come into play. Transparency would prevail. Less/smaller middlemen.
It doesn’t take a MBA to figure out that MIDDLEMEN often add to the price of a product as it passes from hand to hand as it gets to the final consumer. Has our healthcare system evolved over the last couple of generations.. into entities whose primary purpose is profits and healthcare is just a matter of how many tests/procedures one can perform without doing any serious damage to the patient and incorporates too many middlemen that are consuming valuable healthcare dollars that could be put to better use treating people?
Filed under: General dumb-ass problems
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