Less than 4 weeks ago, I wrote a blog post about Blue Cross and Blue Shield of Georgia’s new policy to deny Emergency Room visits later determined not to have been an emergency. At the end of last month, it was reported that Anthem, the parent company of Blue Cross and Blue Shield, has implemented yet another policy aimed at curbing expenses. They will no longer pay for outpatient CT and MRI scans done in hospitals without prior approval. For now, the policy impacts subscribers in Indiana, Wisconsin, Missouri, Kentucky, and Ohio, but many speculate it will spread to other states. There is certainly a need to curb healthcare costs in the United States. However, will patients get caught in the middle of the fight between insurers and hospitals? In this article, I give you some tips to navigate this minefield and avoid being left with a huge bill.
Let’s start with the medical terminology.
A CT scan, otherwise known as a “CAT scan”, is essentially a very fancy X-ray. X-ray measurements are taken at various angles, then processed by a computer to produce cross-sectional images of body parts. These images allow physicians to detect internal injuries, infection, cancer, and other abnormalities in great detail. An MRI scan uses magnetic energy to take cross-sectional images of organs and structures inside the body. It provides even greater detail than a CT scan, does not require the use of radiation, and is often the preferred study for imaging the brain and spinal cord.
Enough of the medical mumbo-jumbo. Let’s get to the heart of the issue—money.
These scans cost a lot of money. According to various sources, the cost of a CT scan in the U.S. can range from $270-$2800 and the cost of an MRI scan can range from $400 to $3500. To understand the reason for these broad price ranges, you need to know what’s included in the bill. There are 3 fees included in the bill for imaging studies: 1) the technical fee, 2) the professional fee, and 3) the facility fee. The technical fee is the fee for the procedure itself. This price varies, depending on the body part being imaged. For example, imaging studies of the brain are more expensive than studies of the abdomen. The professional fee is for the physician (radiologist) who interprets the study. Lastly, there is the facility fee, which is at the root of Anthem’s decision. It turns out there is huge variability in what is charged, based on whether the test is done in a hospital or a freestanding outpatient facility.
According to www.amino.com, the average cost of an MRI is $787 at a freestanding radiology facility and $1767 at a hospital; a difference of almost $1000! One of the reasons hospitals charge more is to offset the costs of operating a business that is open 24 hours/day, 7 days/week. Another reason hospitals charge more is to offset the losses from other services provided, such as those that are less profitable or free/charity care. Finally, hospitals charge more because they can. Now that you see how much more it costs to get outpatient MRI and CT scans in a hospital, you can begin to understand why insurance companies like Anthem are placing restrictions and are mandating that non-emergent studies are done outside of the hospital setting. In many cases, this is an appropriate decision. However, it just wouldn’t be the U.S. healthcare system if things were that simple.
Patients with chronic diseases are worried about this new policy. Imagine you are a cancer survivor who gets CT scans every 3-6 months to ensure the cancer is still in remission. All of your specialists are at the local academic medical center. For the last 18 months, you have had your CT scans done at that hospital. You and your doctors have been happy with this process, as they have access to your results within hours of the study being completed and the transfer of information is seamless. Under the new policy, there is a good chance you will be forced to have your CT scan at a free-standing facility. What’s wrong with that, you may ask? One concern is that the radiologist at the freestanding facility may not have extensive experience with your form of cancer. This can potentially impact the accuracy of the study results. In addition, while your doctor will get a report from the radiologist, he will not be able to personally review the scans because the electronic medical records of the two facilities are not compatible with one another. You will now have to request a copy of your scan (which typically takes several days), then take it with you to the academic medical center so your specialists can review the actual images.
Patients who live in remote rural areas are also concerned about the new policy. For some, the closest freestanding radiology facility is over 100 miles away. For individuals who own a car and are in relatively good health, the worst consequence may be that this will cause a significant inconvenience. For individuals with disabilities or those who rely on public transportation, the barriers may be deemed insurmountable and the patient just won’t get the test.
What does pre-authorization entail?
According to Anthem’s FAQ page, CT and MRI requests will be subject to a “medical necessity review”. The purpose of this review is to determine whether a particular diagnostic test or treatment is appropriate and essential. Decisions are made based on the standard of care and the individual health plan’s policies and clinical guidelines. If Anthem determines that it is medically necessary for the scan to be done in a hospital, the procedure will be approved. If not, the request will be denied and the ordering physician will need to send the patient to a freestanding outpatient facility. You have the right to appeal insurance denials, particularly if your physician disagrees with the decision. (Please read How to File an Appeal When Your Insurance Company Refuses to Pay for more information.)
What should you do as a healthcare consumer?
It is critically important to review the terms of your health insurance contract in order to understand how these types of policies will affect your bank account. No one wants to receive a surprise bill for a service they thought was covered. In some circumstances, if a CT or MRI is completed in a hospital without proper pre-authorization, the insurance company will not pay the claim but the patient is not responsible for the charges. However, in other cases, you may be liable for the entire bill. Even if your insurance company does not yet have a policy that requires pre-authorization for MRI and CT scans, if you have a PPO (provider-preferred organization) or high-deductible health plan in which you are a responsible for a portion of the costs, your out-of-pocket expenses will be dramatically higher when these studies are performed in a hospital. (For a review of the types of insurance plans, please read How to Choose the Health Insurance Plan That’s Best for You.)
There is no doubt that the Anthem policy and others like it will be adopted by other insurance companies across the United States. If you don’t want to be a victim in this cost-cutting war, you will need to arm yourself with information that will empower you to be proactive and to advocate for yourself.
There are three questions you should ask if your doctor orders a CT or MRI scan: 1) Ask why the test is being ordered so you have a clear understanding of what the doctor is looking for. 2) Ask whether you are being sent to a hospital or a free-standing facility. If the test is to be completed at a hospital, ask your doctor if she thinks it is appropriate for you to have the study at a freestanding facility. If your doctor recommends that you have the scan at a hospital, trust her judgment. 3) BEFORE you schedule the appointment for the scan, contact your health insurance provider (or you can review your policy documents online or in print) to determine if pre-authorization is required. If required, make sure this has been completed prior to getting the scan. Following these steps will help you partner with your doctor and minimize your chances of being caught off guard with an astronomical bill.
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