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While managed care continues its sweep across the nation, issues of payment whether fee for service or otherwise will not go away. In fact, payment controversies are getting hotter, fueled by massive vendor-sponsored ad campaigns and coupled with consumers’ already insatiable appetite for health care information.
Take the classic case of a woman who wants to have the extra peace of mind of a computer test that double-checks whether a lab missed any hard-to-detect cervical cancer on her Pap smear. The cost is $40, but her insurer declines to cover it.
"Everyone’s going to want it, and patients will feel it’s our fault if we don’t have it, and we’re the ones who end up with egg on our faces," says James A. Matthews, business manager for Women’s Ob-Gyn in Saginaw, MI, and past president of the OB/GYN specialty assembly for the Englewood, CO-based Medical Group Management Association.
"A new technology often works that way," Matthews points out. "The insurers will dig in their heels until it has to be covered. You also see it now on the transplant stories. You hear some insurers saying bone marrow transplants are too new and untried, and they don’t want to pay for them."
As consumers show more interest than ever in their health care, the pressure to adopt new technologies is likely to increase, experts say.
This kind of emotionally charged situation leaves a woman’s physician in several binds:
• If the patient is covered via fee for service (or discounted fee for service), chances are her insurer does not pay for AutoPap or PapNet, the two tests now available for Pap smear checks.
Does the physician eat the cost to keep patient satisfaction levels high and to avoid malpractice issues down the road? Or does the physician tell the patient up front it’s not covered and let the patient decide? Also, should the physician invest in the technology to provide it to patients in the office?
• If the patient is covered by capitation, chances are the cap contract does not take into account AutoPap or Papnet.
Does the practice absorb the costs, or will it be worked out in the contract with the capitation payer? What are the chances of that, given that apparently only one insurer in the country covers it right now?
• If the patient is covered by Medicare, the tests won’t be paid for, at least not until Medicare officials make a decision later this year or even next year.
Starting this month, federal officials are expected to solicit recommendations from medical advisors on possible Medicaid and Medicare coverage for these new technologies, but that also takes time. And, these discussions will take place during a time when federal officials are sharpening their budget-cutting axes.
In the midst of these issues, the maker of Papnet is launching a massive ad campaign to motivate insurers to accept coverage of the test, and to encourage patients to seek out the test from their physicians. So far, only one insurer MagnaCare Health Plan, a Cincinnati HMO has agreed to add the test to its coverage policies. But in the first month of the ad campaign, 7,000 women called Papnet developer Neuromedical Systems of Suffern, NY, to receive more information and to voice their support.
In addition to attempts at swaying public opinion, Neuromedical officials are sponsoring a cost-effectiveness study at the University of Florida in Gainesville and nine other hospitals yet to be announced to help persuade insurers to change their minds. So far, few insurers cover Papnet, and some scientists say the test is duplicative, says Matthews.
New technologies offer larger physician groups marketing opportunities to attract new patients and to tout their cutting-edge services. For example, Kaiser Permanente of Northern California in Oakland is riding the wave of the new product’s publicity. Kaiser officials recently announced the inclusion of AutoPap for its beneficiaries.
Kaiser has its own labs and its own health care insurance component, making adoption of new equipment and insurance payment for it less complex than it might be for other less-integrated practices.
"It is our conviction that this new technology will allow us to provide the highest-quality service to our patients by reducing the number of false-negative Pap smears that occur," says Gene F. Pawlick, director of Kaiser’s laboratory component in Berkeley, CA.
Yet even practices that either don’t have their own labs or have not yet heard of this particular technology can at least help their patients advocate for payment, points out Carol Dunn, administrator of Women’s Health Care Group, a four-physician OB/GYN practice in Grand Junction, CO.
"We have patients coming in who have seen ads in magazines, and they are asking us about it," Dunn says. "The lab we do business with felt like the test was redundant. These companies have so much money and they make things sound good and maybe they are. Our nurses are researching it and keeping our patients informed." So far local response has not been great enough to make it controversial, says Dunn, although in time it might.
New testing technologies aren’t the only area in dispute. Almost half of Americans’ drug prescription purchases aren’t covered by health insurance, yet prices are skyrocketing. Prescriptions for brand-name drugs cost on average 48% more in 1995 than in 1991; generic drug costs increased 40%, according to IMS America Ltd., a market research firm in Totowa, NJ.
At the same time, the cost of Medigap insurance which covers items not covered by Medicare climbed by 20% to 40% from 1995 to 1996, according to senior advocacy group Families USA of Washington, DC. (See related story, p. 3.)
With many common drugs costing $1 to $2 for a daily dose, patients who have chronic conditions such as heart disease or diabetes can spend hundreds or even thousands of dollars a year for their prescription drugs. That’s why one of the big draws for many capitation plans is the offer of free or discounted drugs to beneficiaries, but those benefits have to be soaked up by either the providers or the insurers.
Another problem stems from patients who cut back their doses to save money, creating sometimes dangerous side effects and thus higher morbidities.
Overall, one service physician practices can offer their patients is education, suggests Matthews. Regarding the Pap test checking device, "I’d find out if it’s available in the community yet and do some research with insurers," he says. "I’d want to know the ratio of success to false positives in the tests." Physician offices that run their own lab work would want to consider purchasing the equipment, while practices that farm out their lab work would merely want to be able to educate patients on the validity of the test and its costs.
Also, if capitation contracts start popping up, suggests Matthews, the new Pap smear test is an issue to bring up with capitation insurers.