"Balance Billing" in Healthcare

[coppertop]

I read about this the other day in the recent issue of Consumer Reports - it's where a health care provider is not in your network, so you get a bill for their services which your insurance will not cover.  Just because your hospital is in your network does not mean that all of the providers in the hospital are in the network.  It comes as a great shock to people to receive these bills.  Then the Philadelphia Inquirer had a similar piece this last Sunday.

Yesterday a co-worker told me that she had had an emergency situation recently where she was anesthetized, and when she came out of it, the docs said they were sending her issue out for pathology.  She figured it was just part of the treatment - until she received a bill for over $4,000 because the lab they chose is out of network.  She is currently appealing. 

As quickly as loopholes for insurance companies are closed, they find new ones.  It's disgusting.  And no hospital should be hiring physicians or firms that do not participate in the same health insurance that it accepts.  How can a person defend themselves against this nonsense, particularly when ill or injured?

[Reynold]

We had an issue like that, same kind of thing, with a surgery where they sent something to a nonparticipating lab.  What helped was that for an identical surgery (left and right side kind of thing) a month earlier, they didn't do that, so we had a good argument to make that it was their fault for choosing an out-of-network lab. 

They eventually agreed and covered it, but I *think* they would have had to anyway, since the hospital itself was in-network.  My wife spent probably 10-15 hours over a couple of months making phone calls, reading things, sending documentation, etc. to get it sorted out.  She does a lot of that and is very good at it, so she knows how to interpret the paperwork and charge codes on things.  It is definitely annoying that today you have to be your own doctor, lawyer and accountant just to be sure other people are doing their jobs correctly, though. 

Definitely have your coworker appeal, read the details of their insurance coverage (not just the 1-page summary HR gives you), and keep following up.  Ask to speak to higher-ups, emphasize that the facility was in-network, no notice of out-of-network use was provided, etc.  Worst case it should be possible to get them to knock the bill down to what the insurance company would actually pay, which is usually 10-30% of what is actually billed these days.  Even if they spend 20 hours at it, that is still pretty good compensation per hour. 

[Million2000]

I read about this the other day in the recent issue of Consumer Reports - it's where a health care provider is not in your network, so you get a bill for their services which your insurance will not cover.  Just because your hospital is in your network does not mean that all of the providers in the hospital are in the network.  It comes as a great shock to people to receive these bills.  Then the Philadelphia Inquirer had a similar piece this last Sunday.

Yesterday a co-worker told me that she had had an emergency situation recently where she was anesthetized, and when she came out of it, the docs said they were sending her issue out for pathology.  She figured it was just part of the treatment - until she received a bill for over $4,000 because the lab they chose is out of network.  She is currently appealing. 

As quickly as loopholes for insurance companies are closed, they find new ones.  It's disgusting.  And no hospital should be hiring physicians or firms that do not participate in the same health insurance that it accepts.  How can a person defend themselves against this nonsense, particularly when ill or injured?

My wife had this happen last year when she went to a skin doctor who sent off some samples for tests. Quest Diagnostics apparently wasn't in the network for our insurance (only Labcorp was). My wife wasn't told about which lab this was going to and for that matter would not have thought it important if she was told. Thankfully the bill was small for this kind of stuff (only $150) but still incredibly annoying and an eye-opener for us in our 20s about how our health system functions in this country. We had recently married and I changed my insurance to high premium/low deductible to avoid these things. I won't make that mistake again.

I don't think there is an easy answer to this issue besides asking about every part of the process which would be extremely hard to do in certain situations. The doctor's office can give info on it but it will be up to you to contact your insurance to verify whether the procedure, doctor, or firm is covered. Given how convoluted and murky information is in the health industry, it's a daunting task. 

[Sibley]

Yeah, this is something that the healthcare industry needs to address. It's getting press, so I suspect something will happen. We'll see if it'll work.

[AlwaysLearningToSave]

There are three concepts to be concerned with:  Whether the service is covered by the policy, whether the in-network versus out of network deductibles and coinsurance apply, and whether the hospital can bill the difference between the total bill and the amount the insurer pays. 

The third is what is referred to as "balance billing."  Some states allow balance billing and others do not.  I would assume that the hospital would not balance bill if it were disallowed under state law but it is worth checking to see if it is legal in your state.

It is an interesting policy question because the reduced negotiated rates are one of the biggest value-adds a health insurance company offers.  But if the out of network provider cannot balance bill, the insurer provides less value to the insured individual.  It can be very difficult for patients to control their healthcare expenses by using only in-network providers, though, when in-network providers and out-of-network providers work in the same facility or when emergency care is followed by non-emergency care in an out-of-network facility. 

I tend to agree, though, that balance billing should not be allowed.  The provider's rate for patients not participating in the provider's preferred provider networks is a farce-- no one actually pays that price unless they are caught in a situation like OP described. 

[lauraah]

The provider's rate for patients not participating in the provider's preferred provider networks is a farce-- no one actually pays that price unless they are caught in a situation like OP described.

This.  That $4K lab bill is probably normally paid at pennies on the dollar- it could easily be $100 or less.  And that's the part the insurance company is paying if they offer OON benefits on your plan.  Then the health care provider can "balance bill" the member for the other $3900.  Don't call the insurance company first- call the health care provider.  The insurance company is probably doing exactly what is in your benefit booklet- this is a standard practice.  The health care provider has no reasonable expectation of getting $4K, they're just trying to see if it works.  Call their bluff and complain.

This is a messed up system and it's becoming an even greater issue of late.  The mental health parity laws make it so that if you offer mental health services you have to treat them the same as other health services.  And since people are disproportionately likely to go out of state (and out of network) for mental health services- think rehab- mixed with the heroin epidemic and more people having insurance through the ACA, it's an issue.  Cigna has pulled out of the Florida ACA marketplace for this very reason: http://health.wusf.usf.edu/post/cigna-pulls-out-fl-marketplace-cites-abuse.  The trick is that if an insurance company doesn't have well established rules around how they handle out of network claims, they can get stuck paying the full amount of charges (which are more or less meaningless numbers that are hardly ever what the provider actually gets paid) and that's what's hurting Cigna.  It seems like their plan is to stop offering out of network benefits period in 2017.  And I think that's going to be a trend going forward.  A move back to the HMO model- which for as much as people have a bad view of it, it did keep costs down.

[coppertop]

Back when HMO's first came out, I thought they were great.  When I went to the doctor or took my kids to the pediatrician, my co-pay was $1 or $2.  Yes, I had to get referrals for everything, but it was worth the trouble to pay so little out of pocket.  When my daughter was born in 1980, my only out of pocket cost was for prenatal vitamins.  Everything else was covered. When my youngest was born in 1984, we had a horrible plan with New York Life.  NYL did not even pay for my healthy newborn's hospital stay - they called it "well baby care," and it was not covered.  Needless to say, they did not cover his circumcision either.  This was a huge shock to us, having had our first two children when we had an HMO.

[Apples]

Balance billing can happen for in-network services too, as far as I can tell in my experience.  It makes the amount you "save" that shows up on your EOB look like just a made up number sometimes. Grumble grumble.  I'm the head health insurance person for our small 8 person business-the guys realllly like it when I tell them they have to pay those bills, that insurance doesn't cover that part.

[Axecleaver]

There are three concepts to be concerned with:  Whether the service is covered by the policy, whether the in-network versus out of network deductibles and coinsurance apply, and whether the hospital can bill the difference between the total bill and the amount the insurer pays. 

The third is what is referred to as "balance billing."  Some states allow balance billing and others do not.  I would assume that the hospital would not balance bill if it were disallowed under state law but it is worth checking to see if it is legal in your state.

This is a great summary of what balance billing is.  Balance billing is not permitted in New York, but it doesn't stop the providers from trying. How many people pay the bill without knowing better? Probably a lot. Best thing to do is to call the hospital. I learned when I did that, that their policy is to send the patient a bill for the full price procedure first, while the insurance negotiations are ongoing. That policy seems criminal to me, but apparently that doesn't stop them from doing it.

[jackiechiles2]

We had the same thing happen with the birth of our third child back in June.  Went to in-network hospital, baby had some minor breathing issues, had to go to NICU in said in-network hospital.  Turns out the NICU doctors weren't in network, they were out of network somehow.  We received a bill for like $4,800 for the NICU doctors which was covered under a higher out-of-network deductible, that was totally different than the in-network deductible.  So I appeal, and it reduces the charges, well somewhat.

Turns out, there's 3 different versions of  Max out of pocket.  There's the "High Performance" out of pocket.  The "In Network" max out of pocket.  And "Out of network" max out of pocket.  Each higher than the last.  Again, the hospital we went to was a "high performance network" hospital, so our max out of pocket was $6500.  When I appealed the out of network doctors, the insurance company bumped them into the "in network" doctors, which the max out of pocket for "in network" was like $8500.  So rather than it being 0 (we'd already met our max on high performance network), it was $2,000 because they decided randomly to put them in the "In network" instead of the "High performance network."

Funny thing is, I'm asking the insurance company woman which doctor was in the high performance network, and she HAD NO IDEA.  I'm like "How am I supposed to know which doctors are in the high performance network when you can't even tell me??"  So now we're going through some second round of appeals to try to bump the docs into the high performance network. 

Moral to this story:  REVIEW YOUR EOBS!  Had I not reviewed them, I wouldn't have realized they added up to $8500 instead of $6500.

[AlwaysLearningToSave]

Balance billing can happen for in-network services too, as far as I can tell in my experience. 

That has not been the experience I have had with the PPO networks I have worked with. 

In my experience, one of the key provisions in the preferred-provider agreement between the provider and the insurer is that provider agrees to not balance bill to patients insured by the insurer.  If an in-network provider were balance billing an insured individual in my state, I would be quite concerned and suspect the provider is in breach of its preferred provider agreement.  In that case, the best remedy would probably be to alert the insurer, because it has a strong interest in making sure its in-network providers do not balance bill its insureds. 

Of course, this is not to be confused with the insured individual's obligation to pay his or her deductible and coinsurance obligations.  It also likely varies from state to state. 

[MrsPete]

Yesterday a co-worker told me that she had had an emergency situation recently where she was anesthetized, and when she came out of it, the docs said they were sending her issue out for pathology.  She figured it was just part of the treatment - until she received a bill for over $4,000 because the lab they chose is out of network.  She is currently appealing. 

This is what's scary to me:  The  majority of us don't work in health care, and we don't know what we don't know.  We don't know what to ask.  We don't know how to protect ourselves against situations like this, and it's impossible to know everything that'd be necessary to completely prevent odd situations like this! 

[coppertop]

Not to mention that fact that when you are under anesthesia, you are at their mercy and if a doctor you've never heard of gets involved, you have no control.  My husband recently left his job in the healthcare field, and he says that when you are ill, you absolutely need an advocate there with you to ask the questions and take the notes. 

[TomTX]

Back when HMO's first came out, I thought they were great.  When I went to the doctor or took my kids to the pediatrician, my co-pay was $1 or $2.  Yes, I had to get referrals for everything, but it was worth the trouble to pay so little out of pocket.  When my daughter was born in 1980, my only out of pocket cost was for prenatal vitamins.  Everything else was covered. When my youngest was born in 1984, we had a horrible plan with New York Life.  NYL did not even pay for my healthy newborn's hospital stay - they called it "well baby care," and it was not covered.  Needless to say, they did not cover his circumcision either.  This was a huge shock to us, having had our first two children when we had an HMO.

I think they were justified in not paying to cut off part of your son's penis for purely aesthetic/religious reasons.

[Abe]

These insurance networks are a headache for everyone. Whenever we need to refer a patient to a specialist outside of our hospital, it's a big research expedition to figure out who is worth referring to, and if the patient's insurance would cover the referral. Sometimes even the insurance company has to "get back to us". How can you not know what your own contracts say!?

I agree with coppertop's assessment. Most of my patients are too ill to remember details well, and anesthesia makes this worse. It helps a lot to have friends or family there to stay with them, and except in emergencies I usually ask permission to call someone else to explain the treatment plan.