Saturday I was meeting some friends for lunch on the Third Street Promenade and I took the wrong exit from the freeway. Instead of the Fifth Street exit, I took Lincoln Boulevard. This caused me to drive past the Salvation Army center where there was a food distribution going on. As I looked at the faces of the people in line I was struck with the breadth of humanity that was represented.
There was one woman who particularly struck me. She was seated on some stairs, her shoulder length gray hair pulled neatly into a bun, her pink sweater contrasted against the green of the leaves growing on the wall behind her; a trim lady, she appeared to me to be the type of person who six months ago had a comfortable if not particularly exorbitant lifestyle. Sitting with her face in her hands, the brown paper bag of today’s lunch next to her leg, I swear I could hear her thoughts. “How did this happen to me? How did this become my life? I have nowhere to turn.”
Looking at her I was struck not by our differences, but rather our similarities. Average Joes and Janes, just trying to survive in a whirlwind of economic insanity.
In addition to being a divorce lawyer I also own a medical diagnostic company. There are four people who rely on our cash-flow directly, and many more when you add in the family members that are affected. We just passed the five year mark in operations. A huge milestone that any economics professor, business guru or hired gun will tell you is quite an accomplishment.
We also just had what I am praying is the worst quarter ever in cash-flow. The insurance companies have tightened their rules regarding paying for the procedures that we perform.
Here are some of the hoops that my company jumps through when a patient is referred to us by a doctor. The insurance must be verified as currently valid, then many times we must submit the procedure for a “pre-approval” which means that the insurer decides whether or not they will pay for this particular procedure. This can take up to a month with some companies.
Frequently the person reviewing the pre-approval application will also require a Letter of Medical Necessity, in addition to the prescription that the doctor has already filled out. This interim step can take an addition week or two depending on the doctor’s office.
Once the pre-approval is granted, the patient is then scheduled, the test performed and we submit a bill to the insurance company for payment. One would think that with a prescription, a pre-approval, a Letter of Medical Necessity and an authorization that payment would be forthcoming.
One would be wrong.
When the bill is submitted to the insurance company they have their “process” for payment. First they must review that all of the above requirements have been met, if they can find any undotted “i”, or uncrossed “t,” they will reject the claim right at the 30 day statutory maximum deadline. This will require us to resubmit correcting whatever trivial matter is incorrect. This allows the insurance company to then take an additional 30 days to pay the claim.
As if that wasn’t enough, many companies have now instituted an internal review procedure once the check has been actually drafted to make sure they paid the correct amount. This can take an additional two weeks.
Now throughout this time, our rent has to be paid, our phone bill paid, our people who perform the test have to be paid, so they can pay their rent, phone bill and car payments.
We hit a period earlier this year where the insurance companies were holding on to so much money I was scared I was going to lose the company. It forced me to re-evaluate the whole process and I came up with a solution.
I raised the rates.
It’s all I could do. I have to charge more, because the insurance companies are holding on to my money so long, that I have to have more of it when they do write me a check, in order to keep the company going.
As my cash-flow got tighter, I had to get more from each individual test and company. It’s insanity, I know. It will drive up the cost of health care overall. It will make the insurance companies pay more, and to keep their profits high, they have to pass on the cost as increased premiums.
Tough times are painful, scary and frustrating, and like the woman on the steps, I’ve felt that I had nowhere to turn, but out of tough times come great lessons.
I learned that I can charge more, and that will secure the future for my company and the people who work with me.
David Pisarra is a family law attorney focusing on father’s rights and men’s issues in the Santa Monica firm of Pisarra & Grist. He can be reached at email@example.com or (310) 664-9969.