Consumers Face Serious Copay Problems


Medical Banking Rx, LLC, an information technology and services firm, today announced the release of its new, patent-pending solution, MedConfirmation(SM), that enables all healthcare claims processors that adjudicate (re-price) electronically submitted claims to eliminate the ability of health care providers to “game” the system in all 100% copay situations, which otherwise can occur without either consumers’ or healthcare claims processors’ knowledge or  consent.

Health care providers possess an ability to unilaterally avoid claim adjudication in all 100% copay situations without detection at the point of service. Discounts that providers have felt forced to accept under managed care plans have spiraled down over time and are now well below their preferred, and perceived reasonable margins. This has led health care providers to subsidize those discounts by charging cash paying consumers more than the health care provider’s “managed care” contracted rates when consumers are financially responsible for the entire cost of their services or products. This includes such 100% copay situations as cash discount card programs and all high deductible health plans (HDHPs), including the alphabet soup of consumer driven health plans (CDHPs) before consumers have met their deductible. Traditionally, health care providers have experienced little to no risk of being caught, and applicable penalties, if any, have not eliminated this problem of consumer  vulnerability.

All consumers experience the same vulnerability in every 100% copay situation. This is not limited to cash discount card programs because approximately ninety percent (90%) of CDHP members and fifty percent (50%) of HDHP members never reach their deductible. The only noteworthy difference between HDHPs/CDHPs and cash discount programs is that HDHPs/CDHPs have a deductible that, once met, automatically converts to a cost-sharing arrangement with the consumer’s health plan that eliminates the  problem.

When providers circumvent the adjudication process, overcharges is only one of five significant problems that are experienced under High Deductible Health Plans (HDHPs) and Consumer Directed Health Plans (CDHPs), the fastest growing segment of health care coverage – growing annually at double digits. The five (5) problems experienced when the claims adjudication process is circumvented  are:

1. Consumers paying more than the contracted, discount rates for their products and services.
2. Claims not being counted toward consumers’ deductibles when applicable.
3. Deductibles, if applicable, not being tracked at the point of service. This means that, if consumers would hit their deductible with the service or product then being provided, they would not receive the benefit of a reduction in their financial responsibility at that time, with their third party picking up the difference.
4. Claims not being included in medical profiles which limits the ability to manage patient care; and patients not receiving concurrent Drug Utilization Review (DUR), when applicable, on all prescriptions, thereby making them susceptible to costly drug therapy related problems that otherwise could have been avoided.
5. Data required for accurate actuarial and clinical analysis, risk prediction, projected outcomes and optimal provider compensation under pay-for-performance (P4P), or value-based purchasing models are incomplete. Consequently, any results derived from available data would be inaccurate and negatively impacts the ability to manage  care.

The magnitude of the problem in the pharmacy benefits sector alone is explained by the fact that it is not uncommon for cash discount card programs to experience reversal rates ranging from twenty percent (20%) to fifty percent (50%). Those reversal rates range from four (4) to ten (10) times that experienced under traditional, fully funded pharmacy benefit plans when consumers’ (cost-sharing) copays alone are approximately the same amount as the average prescription cost under pharmacy cash discount programs. Therefore, the cost of the prescription is not the reason for the increase in claim reversals under cash discount programs. Under traditional prescription drug plans that utilize a cost-sharing copay structure, provider self-serving claim circumvention is not possible because plans (insurers) are responsible for a share of the  cost.

Rick Morrison, President, Medical Banking Rx, commented, “Based upon consumer vulnerability and the significance of this problem, there is reason to believe that Requests for Proposals received by healthcare claims processors that adjudicate/re-price electronically submitted claims will soon include a request for an explanation of the real-time, quality control measure that they can provide to prevent providers from either circumventing the adjudication process at the point of service or subsequently reversing claims without the patient’s consent or knowledge when the patient bears the full financial responsibility for the cost of the product or  service.”


About Medical Banking Rx,  LLC
Medical Banking Rx is an information technology and services firm that provides two approaches, (MedConfirmation(SM) and Patient Driven Rx(SM), to eliminate the ability of health care providers to circumvent the claim adjudication (re-pricing) process, as well as the five significant problems experienced when claims are not adjudicated. Both solutions are integrated, but outsourced components of a healthcare claims processor’s real-time claim adjudication process and are easy to implement. MedConfirmation(SM) is the new, patent-pending solution that enables consumers to audit health care providers for adjudicated pricing at the point of service, and claim reversal actions, if any, in order to prevent claim adjudication circumvention. When providers receive their adjudicated pricing edit, consumers also receive it. MedConfirmation(SM) confirms the submission of their claim, provides price transparency, and alerts the consumer if the provider subsequently reverses their claim. Patient Driven Rx(SM) is a recipient of the HIMSS Medical Banking Project “Disruptive Innovator Award (best potential to transform healthcare using disruptive innovation). Both solutions effectively transfer control of the claims submission decision from the health care provider to the consumer to prevent claim adjudication circumvention by precluding provider self-serving pricing and claim reversal actions and forces providers to submit every claim for adjudication in all 100% copay  situations.

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.