Results of a 2015 Consumer Reports survey show over a two-year period, 30% of Americans who were privately insured received a surprise medical bill (a medical bill in which the health plan paid less than was expected).
The unexpected bills were a result of “balance billing”, a practice in which an out-of-network provider provides services to a patient in an in-network facility and then bills the patient for whatever the insurance company doesn’t pay (at his or her own rates, rather than at the in-network negotiated rates).
Although all parties involved tend to agree consumers shouldn’t be subjected to surprise medical bills, they disagree as to whether the insurers should cover the extra costs or the providers should bill at in-network rates.
State and federal officials are siding with patients
In New York, legislation has already been passed that requires insurers and providers to resolve these disputes instead of billing patients for the extra charges. Florida has passed similar legislation that is waiting to be signed by Gov. Rick Scott (R), although Florida’s resolution process is voluntary. Other states will likely soon follow.
According to The Huffington Post, both providers and insurers are under pressure from the Centers for Medicare and Medicaid Services (CMS) to resolve this issue and CMS is warning that the government may intervene if they don’t. “The industry can solve this problem without our help, but with a lot of strong encouragement, and I think they would be wise to do that,” Andy Slavitt, the acting administrator of CMS, told The Huffington Post. “I refuse to believe that this is as difficult as people say it is.”
In The Huffington Post article, Slavitt offered are a number of potential solutions that will keep patients from being hit with surprise medical bills, including:
- Requiring providers to disclose upfront that they aren’t in-network
- Creating blanket exceptions for emergency care
- Designing health insurance plans that limit patient exposure to out-of-network charges
- Instituting new payment models under which a hospital receives a lump sum and distributes the money to anyone who participated in the patient’s care.
“You’re going to be seeing me playing a very visible, public role trying to bring people to make progress on this issue on their own, and if they don’t, we have regulatory tools,” Slavitt said. “This is a personal passion of mine.”
What some insurers are doing
In an article for Modern Healthcare, Bob Herman said that although the Affordable Care Act requires insurers to pay out-of-network emergency providers at network rates, patients in many states still receiving surprise medical bills. According to Herman, UnitedHealthcare has announced it will reduce reimbursement for out-of-network emergency physicians who practice at in-network hospitals because the company believes some physicians are seeking “excessively high reimbursement levels.” This will leave UnitedHealthcare members with potentially large out-of-pocket bills.
But other insurers are working to resolve the problem to avoid public outrage. For example, Jill Syracuse, chief engagement officer at Independent Health, a not-for-profit insurer in Buffalo, N.Y., told Modern Healthcare that it has staff in its cost-containment division who are solely responsible for handling members' concerns about surprise medical bills. Staff members negotiate with providers on behalf of patients with the goal of coming up with a payment that is based on reasonable and customary rates. “When a member has followed every rule, they should be held harmless from any consequences,” Syracuse said. “It's the right thing to do.”