Our health care payment system is really broken.

We have a Flexible Spending Account (FSA) through Dan’s office. This is a Good Thing. We put aside some pre-tax money every pay period, which can be used to reimburse us for certain out-of-pocket medical expenses. Thus, we are not taxed on those expenses, meaning that the government partially subsidizes them. If we put aside too much money (a possibility, since we have to estimate the amount the year before), we lose the excess, which presumably helps the government offset its subsidy. We therefore try to be conservative in estimating how much money to put aside.

So…this year because we had some unusual expenses, we ran out of our FSA budget sometime in June. With $14.74 left in the FSA account for the year, Dan had to make a doctor’s copay of $15.00. He tried to put this on the debit card associated with the FSA account, and (naturally) they would take only $14.74. So he charged that amount and paid $0.26 in cash. Perfectly reasonable, yes?

In August, we received a notice from the company that administers the FSA account that there was a charge of $14.74 for which they required backup documentation. Normally our copays do not require backup documentation, so…apparently either Dan hadn’t gotten, or I hadn’t saved, the medical documentation for the charge, not expecting to need it.

Apparently, the reason the system rejected the charge of $14.74 was that it was an odd amount, not matching our standard copay, and it’s theoretically possible we might have bought something from the doctor that didn’t qualify for the FSA account. In other words, the rejection was triggered because we had underpaid by twenty-six cents.

In order to clear up this $0.26 discrepancy, I decided that the easiest thing to do would be to submit some other charge that was clearly legitimate and more than the $14.74 under dispute. I got on the benefit administration company’s Web site in early November to do this. (Yes, I procrastinate bureaucratic stuff like this.) But their system wouldn’t allow me to enter new charges because it looked at all charges submitted rather than all charges accepted. Since the $14.74 under dispute had been submitted (though not accepted), the system thought that we were already maxxed out for the year.

So I called the customer support line. After almost three minutes negotiating their phone system, I spoke with a Real Person, who told me that I had to submit the new charge manually (not through their Web site) and that she would annotate our account so that they would apply the new charge against the outstanding $14.74 and call it even. I also annotated the claim form in large letters with this information.

I submitted the information manually via US mail.

Yesterday, we received a letter denying the claim. The reason the claim was denied was that it was for $25.00 but there was only $14.74 left in the account.

Today I got on the phone, negotiated the phone system for almost three minutes, and spoke with a Real Person. She told me that, even though our account had been annotated by the previous Real Person I talked with, the system had rejected the new charge because the $14.74 claim was still open. She said she is going to resubmit the charge for manual review and it should go through just fine.

If for some reason it doesn’t, we’ll be getting another letter from their system.

As nearly as I can tell, the fact that we paid $0.26 too little has now cost me $0.44 for a stamp and about an hour of my time. It has cost the administration company $0.88 for postage and two phone calls with Real People lasting 5-10 minutes each. A company I once consulted to estimated that every call to Customer Support costs the company close to $50 in salary, indirect expenses, office space, etc. That was ten years ago, but let’s say this company is really efficient, and each call costs them only $25. Therefore, they have spent some $50 so far in order to handle Dan’s underpayment of twenty-six cents. And they will spend more than that: we still have a manual review process to look forward to.

I’m sure this is just the smallest example of the sad state of affairs of our health-care system. Was anyone wondering why our health care costs are so high?