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Masson's Blog

SB 87 – Health Benefit Payments

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SB 87 introduced by Senator Miller mainly adds notice requirements to direct payments made by an insurance company to its insured for services provided by a medical provider that has not entered into a contractual relationship with that insurer. The insurer is required to notify the insured that the insured is to send the money to the medical provider if the bill has not already been paid.

So, for example, Insurer does not have a contractual arrangement with Hospital. Patient gets treated at Hospital. So, Insurer sends money directly to Patient instead of to Hospital. The danger is that the patient will not use the money to pay his or her medical bills. Of course, even with notice, not all patients will use the money to pay the medical bills. But, there is only so much the law can do. I actually had a case like this (pdf) go to the Court of Appeals recently.

SB 87 also has a provision that confuses me a bit:

If an insured does not have a choice of a contracted provider and receives from a noncontracted provider:
(1) emergency health care services; or
(2) other health care services directly related to the condition that causes the insured to receive the health care services described in subdivision (1);
the noncontracted provider shall not bill the insured for any amount owed for the health care services by the insurer or a contracted provider.

If the health care provider does not have a contract with the insurer, how does the health care provider know how much the insurer owes on behalf of the patient and, therefore, the amount it is prohibited from billing the patient?

Medicaid on the chopping block

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Daniels will seek cuts in Medicaid

Daniels’ top human services aide, Mitch Roob, said Indiana Medicaid, which will care for an estimated 847,126 people this year, is front and center on the chopping block. Roob said state officials need to dramatically restructure the $4.65 billion state-federal program to avoid spending a total of $715.8 million more during the next two years. . . . Roob said, state officials will look into the $380 million cost of caring for 5,267 people with developmental disabilities such as autism, cerebral palsy and mental retardation in their own homes. Nearly 13,000 people are waiting for these services. Roob indicated the Daniels administration also will seek changes in the law to help them narrow eligibility for Medicaid and, possibly, cut services the state offers but is not legally required to provide. . . . . Roob, who used to run Wishard Memorial Hospital, a county-run hospital in Indianapolis, acknowledged that cutting Medicaid payments could limit access to pregnant women and children, people with physical and mental disabilities and seniors who rely on the state-federal program.

Medicaid sure is the largest target in the state budget. Not a very attractive option. But, maybe there are no attractive options. But, as a guy who collects medical bills as part of my living, I’ve seen first hand that most of these folks need the services and can’t pay for ’em. (Though there are a few number of dead beats who are playing the system.) What I’m afraid of is burdening the hospitals with ER patients who they still feel an obligation to serve but who will not pay. The result being that the hospital provides ER care which is likely more expensive than the treatment that would’ve been provided had Medicaid been available. Then, they pass the costs along to us. It’s probably the worst possible system. Unless we’re willing to let people go untreated and die, we’re going to pay for it one way or the other. Might as well organize it to be as cheap as possible.