After seniors panic, Govt will pay out on rejected health insurance claims
Government has agreed to pay out on $15 million worth of rejected health insurance claims after receiving a wave of calls from panicked seniors.
Health Minister Pat Gordon-Pamplin told
The Royal Gazette that rumours of a cut to the subsidy for aged clients were mistaken.
“People have been saying that because we changed the insurance premium that we’ve cut benefits, and it’s not true.”
An “aberration” caused by the Health Insurance Department’s new claims adjudication system has seen patients getting billed for services that had previously been covered by their Government insurance.
However, Ms Gordon-Pamplin said her Ministry intends to honour the claims.
“We have seniors panicking because they’ve got these major bills that they haven’t gotten before,” she said. “The hospital has agreed to cease and desist sending any further claims out to the patients or their families. We will absorb the cost.”
Government has a budget of $104 million to subsidise hospital claims for seniors, children and the indigent.
The rejection rate has historically ran at about one percent — but rejections soared to 13 percent over the financial year just ended because of differences in the hospital’s billing system and its legislated schedule of fees.
The Minister said paying out on $15 million of claims would be kept within budget.
The problem arise from the Health Insurance Department (HID) switch to an automated system, explained Permanent Secretary Kevin Monkman.
“Historically, because of the volume of claims involved, the HID in a manual process wasn’t able to do a line by line adjudication or checking of the claims,” he said. “They could check to verify that the patient was eligible for that subsidy, but that’s as deep as they could go.
“As they improved their processes and now have the automated claims adjudication process, they’re able to check not just the eligibility of the patient but also on a line by line basis to ensure that the claim they’re being billed for appears on the hospital fees regulations. Our auditors have been critical of the HID saying that they’ve been paying for claims that the hospital sends and that are not all on the hospital regulations. So they’re not a legislated benefit, and we shouldn’t pay anything that isn’t legislated.
“This year, with the ability to look at those claims on a line by line basis, the hospital uses what they call a Charge Description Master or CDM to bill out to all insurers. It has a code, a description of the service, and the price. If the HID can’t match it, then they reject the claim, because it’s not a legislated claim. Historically, the claims rejection rate was less than one percent. This last financial year, ending March 31, the claims rejection rate went up to 12 to 15 percent. The rate hugely increased. As we saw that coming through the system and recognised what was happening, when we did the hospital fees regulations for this financial year, we changed them — we took the CDM for the hospital and made that the fees regulations.”
The new regulations only went into effect on April 3 — but Government intends to pay nearly all the rejected claims from the preceding year.
Explained the Minister: “We did not want for seniors to find themselves obligated to pay claims that they knew historically had been paid by the Department.
“It’s going to be an audit issue; there’s no question about that. We’ll have to deal with that. But it was more important to make sure the seniors did not find themselves digging into their pockets for money that they don’t have.”
As a result, the mainly elderly patients who have been billed are to receive notice from Government that they don’t owe anything, she added.
The plan for universal healthcare created by the Progressive Labour Party Government lacked an effective “depth of study”, according to Health Minister Patricia Gordon-Pamplin.
The National Health Plan, which the previous administration said would go into effect next year, remains under review.
Ms Gordon-Pamplin stressed that existing research had not been discarded.
“All that work is valuable,” she said.
“The one thing we want as an One Bermuda Alliance Government is to ensure that costs and utilisation are appropriate. Then we can start looking at some of the other work.
“I know there’s an anxiety. I’ve been challenged on the floor of the House by the Shadow Minister asking why we don’t just bring the National Health Plan to the fore. And I have said, ‘OK, tell me what we’re paying for.’ And the answer is silence. Because that depth of study, in pulling all of the component parts together, in my estimation has not been done effectively.”
Asked if Government planned to impose regulations to cut down on overuse of service, Ms Gordon-Pamplin said she didn’t wish to discount any possibilities.
“We walk a very fine line between doctor and patient care,” she said.
“We have to trust that the doctors will prescribe for their patients’ procedures that are appropriate for their particular diagnosis. I’m not saying that it’s being abused — but in some instances, is it appropriate? These are the things we’ve got to get a handle on.”
Government has pledged to finish its review before next year’s Budget.
The Minister added: “I would rather err on the side of caution, to ensure that what goes into place is appropriate.”