It probably has happened to you or someone you know: A patient chooses the doctor and the facility where the procedure occurs mindful of his or her insurance plan’s network, then later receives a surprise bill showing, sometimes, thousands of dollars owed for out-of-network care. The services were provided, but the patient never knew about them and/or that they weren’t in-network.
The New York Times described this situation in stark terms in its series “Paying Till It Hurts.” (See our blog.) And a recent survey by Consumers Union further quantified it, showing that almost 1 in 3 Americans with private insurance got a big surprise on a medical bill in the last two years when their insurance covered less than expected. Almost 1 in 4 of those surprises got billed by a doctor from whom they did not expect a bill. Fewer than 3 in 10 people were satisfied with the ultimate outcome of the issue.
As described by Modern Healthcare, “Consumers get especially upset when they go to an in-network hospital for an emergency and later get a bill from an emergency physician who was not in their plan’s network.” It mentioned a report last year from Texas, where more than half the in-network hospitals for one major underwriter had no in-network emergency physicians; another major insurance carrier offered in-network ER docs barely half the time, and another major player averaged an in-network ER provider about 1 in 5 times.
This game of “gotcha,” the magazine said, infuriates patients because often there’s no way for them to know that their providers were out of network at the time the care was delivered, so they’re deprived of making an informed choices. “You can’t shop around for a network emergency doc,” the story said, “when you have crushing chest pain. ”
California made a move earlier this month to rectify part of the problem. As reported by Los Angeles Times columnist Michael Hiltzik, the state Assembly passed a measure prohibiting ancillary providers, such as pathologists (who examine bodily fluid and tissue samples to interpret and diagnose the changes caused by disease), anesthesiologists and radiologists (who interpret imaging scans) from charging patients more than the in-network rate for their specialty, if they delivered the service at an in-network hospital.
The bill moves to the state Senate for consideration, but its progress is opposed by the formidably powerful California Medical Association and other provider groups, which is not a surprise (unlike some patient bills).
The gotcha game is fairly new, Hiltzik explained, because doctors in the key specialties often responsible for billing surprises largely used to be hospital employees. So if your hospital was in your insurer’s network, so were those providers. But today, those services mostly are provided by independent doctor groups, which might or might not be in the same network as the hospitals where they perform them. If not … surprise!
Hiltzik pointed out that the problem can be worse in other states (Texas, are you listening?). A California Supreme Court ruling in 2009 banned emergency room physicians from “balance billing” – that’s when patients are charged more than an insurance reimbursement. But that ruling doesn’t apply to pathology, anesthesiology and radiology, and most other states, according to Hiltzik, don’t have California’s ER protection, although 13 do have restrictions on out-of-network balance billing. But they apply mostly to managed care (HMO) plans, not preferred provider organizations (PPOs).
But networks are shrinking, especially among plans offered by the state and federal exchanges of the Affordable Care Act (“Obamacare”). But the problem certainly isn’t limited to them. In addition to fewer provider choices, the gap between what the plan covers for in-network versus out-of-network care (which, for the latter, often is nothing) is growing wider. Some out-of-network charges aren’t just gouging; they can cause a family to lose its house.
“The injustice of course,” Hiltzik wrote, “is that patients typically have no control over the choice of their pathologist, anesthesiologist or X-ray or CT scan provider; sometimes they don’t even know they’re being treated by one. It’s unreasonable to expect them to vet every such doctor, even after they’ve taken all the proper steps to schedule a procedure at a network hospital.”
With the increasing popularity of high-deductible health plans, Modern Healthcare noted, consumers are paying more for health care before the insurance subsidies kick in, making them increasingly sensitive to unexpected bills. “[M]any plans have no out-of-pocket limit for out-of-network charges,” the story said. “A recent New York Times/CBS poll found that nearly half of respondents described paying for health-care as a hardship, up 10 points from a year earlier.”
Because the California legislation limits charges to whatever the in-network charge would have been, medical providers are nervous about who will be responsible for the excess. The medical association wants an amendment to “require an efficient, equitable dispute resolution mechanism that guides parties towards a reasonable rate for services,” according to an Assembly staff analysis. The association supports a 2014 New York law requiring arbitration between providers and insurers, which excuses patients from the tussle.
That’s good news for consumers, but are we too cynical to wonder if disputes between the other interests can only add to the cost of insurance and medical coverage in the long run?
Modern Healthcare didn’t go there, and offered a more optimistic scenario: If more states established regulations like New York (and maybe California), insurers and providers would know that patients can’t shoulder unexpected bills, and the likely outcome of out-of-network payment disputes will nudge them toward signing network contracts.
Consumers Union, it reported, intends to raise the issue with the U.S. Labor Department, which is authorized to impose rules against surprise bills in self-insured plans that are not subject to state regulation.
“But insurers and providers should take action on their own to head off surprise bills,” the magazine advised. “If they don’t, the public and elected officials may decide that limited networks are not such a good idea after all. Then industry players and policymakers would have to dream up a new model for making private markets work in health care.”