By Janet Trautwein
For The Herald
Imagine waking to sharp pain in your abdomen. You rush to the nearest hospital. The doctor diagnoses you with appendicitis, wheels you into surgery, removes your appendix and ultimately saves your life.
Two days later, you get a bill in the mail; for $5,000. Turns out the hospital, ER doctor, and surgeon were all in your health plan’s network; but not the anesthesiologist. So he bills you directly.
Some 60 percent of Americans have been greeted with surprise medical bills like these. They’re unfair, and lawmakers are pressuring health care providers to end them. To do so, Congress should prohibit doctors from sending surprise bills in cases of emergency or involuntary care and require hospitals and clinics to inform patients whether their doctors are in-network or not.
Surprise medical bills can arrive for many reasons. In the most straightforward cases, patients receive treatment from providers outside their insurance network, often when they need immediate care. Obviously, there’s not time to consider whether a hospital or doctor is in-network during an emergency.
In other cases, patients may visit an in-network doctor at an in-network hospital only to find out that their radiologist, or the lab that analyzed their tests, was out-of-network. Sometimes, an entire department will opt out of an otherwise in-network hospital.
Health plans typically cover a portion of these out-of-network charges. But providers routinely bill patients for the balance, a practice called “balance billing.”
Trying to track down which providers are actually in-network can confuse even the most careful patients. Seventy percent of people who have received unaffordable out-of-network bills thought they were using in-network providers, according to one survey from the Kaiser Family Foundation.
Balance bills can be sizeable. One study from New York pegged the average out-of-network emergency bill at just over $7,000. Patients were stuck paying 54 percent of that tab, on average; or nearly $3,800.
For specialty care, the bills were even higher. That same New York study determined that out-of-network assistant surgeons, who were often called into surgery without the patient’s knowledge, charged an average of nearly $14,000. Over $12,000 of that sum fell to the patient.
A mother in Charleston, South Carolina, shared a similar story with CBS News. She had to undergo an emergency C-section but the in-network anesthesiologist was unavailable. An out-of-network doctor subbed in and hit her with a charge of $15,000.
Last year, the Virginia Supreme Court sided with a hospital that had sued a man over an unpaid $84,000 emergency room bill. The court ruled that the admission paperwork he’d signed in the ER was a valid contract consenting to out-of-network charges.
Most proposed legislative remedies for surprise medical bills would have health plans pick up the balance for out-of-network charges. But that approach could lead to higher health care costs for everyone and reduced access to care.
To come up with the funds needed to pay out-of-network providers their full fee, health plans would have to raise premiums. Consequently, patients won’t be relieved of surprise medical bills; they’d simply pay them in a more roundabout way.
Further, saddling health plans with responsibility for surprise medical bills could encourage providers to opt out of insurance networks and raise their prices.
Providers join networks — and agree to accept discounted payments — to gain access to a health plan’s pool of patients. If providers know plans are legally bound to pay them more than the in-network fee, they have little incentive to join — or to lower their prices.
To protect patients, lawmakers must balance responsibility for surprise medical bills between health plans and providers. For example, if there’s no opportunity for a patient to switch to an in-network provider, as in an emergency, plans should only have to pay the in-network price. That would keep premiums low and give providers an incentive to join more networks, both of which benefit patients.
Such a solution would also benefit the 60 percent of workers whose employers cover their health costs directly through self-funded plans. Organizations that self-insure typically contract with a conventional insurer or third-party administrator to process claims and assemble a provider network. So self-funded employers can similarly be victimized by balance bills.
A medical emergency is surprise enough. A sizeable bill from an out-of-network provider shouldn’t accompany that surprise. Providers and health plans must share responsibility to ensure that doesn’t happen.
Janet Trautwein is chief executive of the National Association of Health Underwriters.