A week after visiting the emergency room for a bad bout of pneumonia, you receive a nondescript envelope in the mail. You open it, expecting more junk mail, but instead, you find that you’re being billed for a few thousand dollars by an out-of-network provider who assisted in your treatment at the hospital. How can this be? Your insurance is supposed to fully cover all your emergency room medical bills – right?
If this has ever happened to you, you’re not alone. In fact, you’re just become another victim of the questionable but legal practice of surprise medical billing. Research published in the New England Journal of Medicine found that more than one in five patients who visit the emergency room may find themselves saddled with a hefty surprise medical bill.
What Is Surprise Medical Billing?
A surprise medical bill is a bill you get from a medical provider you thought was in network but turns out not to be. This can happen because external, out-of-network healthcare providers were brought in to assist in your care without telling you or because outdated information (from your insurer, from the provider or a combination) led you to believe you were getting in-network care when you weren’t.
It’s most likely to happen at a hospital, where each medical provider or service is billed separately. You might go in to have your gallbladder removed from an in-network surgeon, only to find out that the anesthesiologist wasn’t part of the same network. Sometimes, it’s even possible for whole departments at an in-network facility to be operated by subcontractors who are out of network.
While the hospital stay may have been covered, the care that was surreptitiously offered by out-of-network providers was not. These providers will make sure to “balance bill” their patients separately, often to the tune of a few thousand dollars. And if this sounds unfair to you as the patient, that’s because it is. Unfortunately, it’s also completely legal in most states – for now.
This has been a growing problem nationwide, but it’s hard to pinpoint exact figures. Although the Affordable Care Act (ACA) requires the reporting of out-of-network costs to enrollees, this provision has yet to be implemented, so there’s only limited data on the prevalence of surprise medical billing. Yet in 2011, the New York Department of Financial Services alone received more than 2,000 complaints regarding surprise medical bills in which patients were receiving bills for emergency out-of-network coverage that averaged over $3,500 per visit.
That same report found that more than 90 percent of surprise medical bills weren’t for emergency services but for other specialized in-hospital care, like anesthesiology, radiology, surgery and lab services, which the patient was not alerted were out-of-network before receiving. Services billed by out-of-network assistant surgeons were especially hefty, often averaging more than $13,000. Bills from out-of-network radiologists averaged more than $5,000.
These high-cost, unexpected medical expenses can put a severe financial burden on patients, sometimes leading to liens on homes, crippling debt and even bankruptcy for low to moderate-income families. It’s hard enough to “shop” for medical care when you’ve got the time and tools available. It’s nearly impossible to make sure you’re being treated by in-network providers at every stage of your medical journey.
Regulations to Curtail Surprise Medical Bills
Lawmakers at state and federal levels have begun to worry about how surprise medical bills adversely affect their constituents, drafting regulation and implementing policies that will ban or severely reduce the negative effects of this practice. This includes provisions that set limits or prohibitions on balance billing as well as disclosure requirements that force health plans or providers to alert patients when surprise billing may occur, giving them the opportunity to choose a different provider.
States Take a Stand Against Balance Billing
A handful of states have begun to push back against what their lawmakers now consider to be predatory billing practices that affect the most vulnerable population by passing their own laws while they wait for more regulatory action from the federal government. New York, Florida and California offer prominent examples.
New York was the first state to pass legislation regulating surprise medical billing back in 2014. The Emergency Medical Services and Surprise Bills law requires disclosures from insurers, hospitals and physicians regarding possible balance billing and accepted health insurance plans. It also doesn’t require patients to pay surprise bills that are more than what they would have to pay for comparable services at in-network providers. It even requires in-network physicians to get written consent from patients before sending out samples to an out-of-network lab.
Florida passed its own surprise billing law in 2016. Its regulations exempt patients from having to pay for surprise medical bills when they were treated by out-of-network providers at an in-network facility without being made aware beforehand. Patients are only responsible for the cost-sharing amount they would have had to pay to an in-network physician for the same service. Florida’s law also requires facilities to make patients aware of possible balance billing by out-of-network providers. The state provides a dispute resolution process by which out-of-network physicians and insurance companies can agree on payments for services in such cases.
California’s Supreme Court had previously concluded that emergency physicians weren’t allowed to surprise bill patients, and in 2017, California’s legislature passed a more comprehensive law that expanded the provisions of this ruling to non-emergency services as well. This new law prohibits out-of-network providers working at an in-
network facility from billing patients out-of-network rates unless they follow strict notification requirements.
Federal Response to Surprise Medical Bills
Strong bipartisan support has been growing in Congress aimed at taming surprise medical bills. Although a full proposal has yet to emerge during the current legislative session, previous proposals can give us an idea of what can be expected. Draft bills have called for caps on what patients are expected to pay, bans on balance billing, prohibitions on out-of-network providers charging patients more than in-network rates, and strict notification and patient consent requirements for hospitals and healthcare providers.
President Trump has been outspoken about the need to tackle this important issue. According to Sen. Lamar Alexander from Tennessee, chair of the Health, Education, Labor and Pensions Committee, a bill regarding surprise billing is to be expected in the next several months.