With the significant rise in out-of-pocket costs for healthcare consumers these days, even those with rich insurance benefit plans are finding care to be unaffordable. It’s especially true for individuals seeking addiction treatment who might be responsible for paying thousands of dollars in copays and deductibles.
Michael C. Barnes, a practicing attorney and the director of the Center for Lawful Access and Abuse Deterrence, noticed that pharmaceutical companies offer certain patients financial help with their copays and deductibles for high-cost drugs and is challenging the behavioral health community to do the same. In the coming weeks, Barnes will launch the new not-for-profit Insured Consumer Access Network (ICAN), which aims to provide scholarships that would pay an insured patient’s out-of-pocket costs for treatment.
State laws governing patient payments vary. Although treatment providers often can forgive copays and deductible charges in cases of hardship, Barnes says insurers have been rather sticky about out-of-pocket collections.
“Insurers, given their institutional discrimination against addiction treatment, are requiring that there be proof of collection of the entire copay before the insurance benefits kick in,” Barnes tells Behavioral Healthcare.
The insurers reason that if a $20 copay is forgiven by the provider, that $20 could be tacked on somewhere else. For example, the resulting insurance claim might then be submitted with a higher rate, essentially passing the patient’s cost onto the insurer.
Some insurers will refuse reimbursement for services if providers aren’t able to provide proof of out-of-pocket collection from the patient. And the common workaround of accepting a patient’s promissory note—a legal document promising payment to the provider in installments over time—is also causing grief for treatment centers. It seems insurers are responding by reimbursing providers in parallel to the promissory note: If the patient pays 10% of the out-of-pocket up front, then so does the insurer pay just 10% of the reimbursement due.
It puts treatment centers in a financial bind.
“The program is unable to collect payment despite having provided services,” Barnes says.
Because many individuals seeking treatment for addiction have already exhausted their financial resources, there could be a substantial response from patients and their families for the ICAN scholarships. Barnes says ICAN will be particular about which programs qualify for its network of providers.
“There is a great deal of waste, fraud and abuse in the addiction treatment field, so we will ask any program that would be a beneficiary of the individual with the scholarship to sign an ethics pledge,” he says.
The pledge will mirror several of the ethical standards set forth by the National Association of Addiction Treatment Providers, including expectations of honesty in marketing practices, medical necessity of services and urine drug testing, and no kickbacks on patient referrals. What’s different, he says, is that ICAN isn’t an organization that counts on membership fees, so it can afford to demand ethics compliance among its network of providers.
“We would accept complaints from scholarship recipients and then will possibly consider complaints from other entities that have signed on to the ICAN ethics pledge,” he says. “To the extent that this is a competitive market, we hope we will see competition in the area of ethical compliance. It would be great to see a program call out another program on ethics, but we do not want to be a clearing house for complaints.”
Barnes also anticipates some pushback from insurers, however, the precedent is set by the copay-assistance model used by pharmaceutical companies. ICAN will be transparent and will adhere to laws governing conflicts of interest and kickbacks. For example, the scholarships can only be applied for those with commercial insurance plans.
Ramp up begins in the coming weeks, followed by word-of-mouth messaging to begin collecting donations.
“We hope to be in the business of helping people access treatment by the third quarter of this year,” Barnes says.
Just how high are deductibles?
For exchange marketplace health plans, the average annual deductible amount for single coverage is $3,064 for standard silver plans, which are the most popular choice among consumers. The average out-of-pocket limit in such plans for single coverage is $6,160.
According to the Kaiser Family Foundation/Health Research & Educational Trust 2015 Employer Health Benefits Survey released in September 2015, for workers with employer-based coverage, the past five years show that deductibles are rising much faster (67%) than worker wages (10%), premiums (24%), and overall inflation (9%). The average deductible in employer plans is $1,318 for single coverage.
Deductibles are separate from any additional copay amounts or coinsurance amounts patients are responsible for.