And how much will that cost?
A Cadillac-based TPA strives to add transparency to health care pricing for the benefit of its employer clients.
CIC Benefit Consulting Group is one Michigan firm that sees a major opportunity in that lack of transparency.
“Our cost transparency service researches the costs for procedures and compares what you will pay among a number of health care facilities,” said Rachel Bregg, an analyst for CIC-BCG.
“We have found that a procedure can cost $500 at one location, while it may cost $2,500 if you were to get that same procedure only five miles away,” she said.
“We shop the market and we find, sometimes, a $2,000 to $3,000 price difference for the exact same test,” said Brian Coté, president of the firm.
CIC-BCG is a licensed third-party administrator, which allows it to manage the employee health insurance plans on behalf of clients. Coté said the firm has more than 400 clients throughout Michigan and manages almost 8,000 insurance claims for those clients each week.
Clients in West Michigan include Lambert Edwards & Associates, Newaygo County, and Universal Traffic Service in southeast Grand Rapids.
“In three years, we’ve gone from about 8,000 lives to over 20,000,” said Coté, referring to individuals covered by group policies his company manages. CIC-BCG itself went from about 23 employees to 70 in that period, and the firm now has offices in Rockford (where Coté lives), Cadillac, Manistee, Saginaw and Marquette, with the Upper Peninsula office having opened in January.
“We handle about a third of all the counties in the state,” said Coté.
The company is based in Cadillac — CIC stands for Cadillac Insurance Center.
Coté started Cadillac Insurance Center in 1996, a property/casualty insurance business that is still in operation, although he no longer owns an interest in it. Coté said it was a strong brand in the Cadillac area so he retained rights to the CIC logo, and when he started his TPA, he added CIC to the new name.
The company has annual revenues of approximately $7.5 million, according to Coté, all from its group benefits consulting and coverage management work. The company works directly with most major carriers in Michigan, including Blue Cross Blue Shield of Michigan and Priority Health, and receives commissions from the carriers with which it works.
CIC-BCG set up a 70-person call center — “patient advocates,” he calls them — who take calls from clients’ employees who have questions about their coverage or a claim they have filed.
With all the claims it handles each week, “it allows us to evaluate when things aren’t billed correctly,” or when there is “a major pricing disparity between one (medical care) facility and another,” according to Coté.
The lack of transparency in U.S. health care pricing gives CIC-BGC plenty to do on behalf of its clients, including “shopping” for the best place to have an elective procedure performed.
“It’s not easy because you have to know the language — you have to know what questions to ask. You can’t just call the hospital and say, ‘Hey, what does an MRI cost?’ They won’t tell you,” said Coté.
In Grand Rapids, he said, there can be a price difference of $2,000 for colonoscopies done at different hospitals.
He said he recently had dinner with an orthopaedic surgeon who said he gets the same fee for a specific procedure whether it’s done at his office or at a hospital. However, the amount a hospital might charge to the patient can be as much as three or four times the amount charged by his practice “because of all the different expenses” entailed at a hospital.
If a doctor refers the patient to one of the large hospital systems for tests, “generally speaking, it pays to do some research” into alternative locations “if you have time,” said Coté.
For older individuals, a colonoscopy is often recommended and “people usually go where the doctor recommends they go.”
Coté said his firm tries to educate its clients’ employees to understand the potential alternatives, because if a number of clinics or hospitals can do it, it might cost less than where the doctor is referring them.
“Nobody ever asks that because it’s free,” he said, referring to the fact that under the Affordable Care Act, preventative tests such as colonoscopies are fully covered by the insurance; there is no deductible charged to the patient.
However, if patients learn to opt for the less expensive locations for elective procedures, they are helping reduce the overall claims on their employer’s insurance coverage — and Coté said the employer can then expect a better deal when its group coverage next comes up for renewal.
Coté said Money Magazine reported a year ago that 80 percent of all hospital bills contain one or more errors. CIC-BCG urges its client employers to tell their employees to call the toll-free call center whenever they have the slightest question about a bill for medical care. His call center “patient advocates” then will work like accountants, in direct contact with the insurance carrier to figure out if there is an error — a “misbilling” — that adds to the cost of that care. As an example, he said many times the errors are innocent mistakes, the entry of “a diagnostic code versus a preventative code.”
“We call the doctor’s office, we call the hospital, we call the insurance company,” said Coté. “We unwind these bills they are getting that they shouldn’t be getting in the first place.”
“We actually saved our employees just shy of $3 million in misbilled medical claims, just in the last three years alone,” he said.
CIC-BCG also offers another special service to its clients: a “telemedicine” service in which a client’s employee can call at any time and speak to a doctor about a medical issue. The cost to the employer is “pennies on the dollar,” said Coté, but the average cost of a visit with a doctor is about $110, and the doctor on the phone can actually write a prescription, if that is what is called for.
Coté said CIC-BCG has had employee groups who were able to reduce their office visits by nearly 40 percent and emergency room visits by more than 60 percent.
Coté also noted that the Affordable Care Act is estimated to add about 14 million people to those regularly receiving medical care now in the U.S., and, he added, thousands of family practice doctors are supposedly going to leave medicine because of the federal law.
“It’s inevitable,” said Coté, that people will soon have to wait even longer to see a doctor, so the ability to reach a doctor by phone for advice will be very useful.