Is Federal Action Needed to Stop Surprise Medical Bills?
There is a national crisis brewing in medical claims processing, but the federal government has yet to intervene. Surprise medical billing occurs when a patient gets a bill from an out-of-network provider, despite receiving treatment from a facility that’s within a patient’s health care plan. The provider, which is usually employed by a third party, holds the patient responsible for charges that the insurer won’t cover.
The corrupt practice occurs in every state, but only one has been actively keeping track of it and taking measures to stop it. Texas has been more progressive than most in helping patients fight the practice of balance billing.
This is an issue that has taken hold across the United States, but is especially common in Texas. Advocates from both sides of the aisle have been pushing for better regulations, but providers, insurers, and business groups all disagree about how to handle it.
Texas has allowed patients strapped with high bills to fight charges through mediation provided by the Texas Department of Insurance. This requires the insurer and provider to work together to come up with a fair payment. In the 2015, the program expanded to allow any citizen strapped with a “surprise bill” of over $500 to enter mediation. The insured person remains off the hook until the insurer and provider can come up with a suitable arrangement.
While these measures are an important first step, it’s not a step that’s available to all patients struggling with balance billing. The mediation process now only applies to those who have a major-medical preferred provider organization health plan. By virtue, this excludes self-funded, retirement, government-run programs, and HMOs. A bill introduced in the Texas Senate, however, aims to change that.
Sen. Kelly Hancock, R-North Richland Hills, recently introduced a bill in the Texas Senate that includes all kinds of out-of-network providers, including facilities such as freestanding emergency centers. It would also require providers to disclose the fact that balance bills might be eligible for mediation.
A National Crisis?
The Affordable Care Act provides some recourse for individuals who must seek emergency care in out-of-network hospitals. If an insurer would cover 80% of costs for out-of-network care, for example, they must do the same in an emergency room. There is nothing, however, that says that a hospital can’t mark up the cost of care to exceed what an insurer reimburses.
The problem is particularly prolific in emergency rooms, with a recent study in the New England Journal of Medicine citing that balance billing occurs in around 22% of all emergency room visits. Another study from the Federal Trade Commission came to a similar conclusion.
Patients in need of emergency care have no choice in determining what is in or out of network; the ambulance decides where to take the patient. In some cases, the ambulance itself might be out of network. A common story is that someone is injured, and an ambulance is called. Though the injured person has insurance for the treatment, it may not cover the ambulance ride, which can be in the thousands.
“In-Network” Balance Billing
Even if you seek care from an emergency facility, you may receive a balance bill because a specialist is out-of-network. Specialists like anesthesiologists, pathologists, and even surgeons may be out-of-network because they work for a third-party company. Hospitals may hire specialists on a contract basis, because it saves money on malpractice premiums and helps shield them from liability. This makes medical claims processing a nightmare and saddles patients with astronomical bills they weren’t expecting.
How Much Does Surprise Billing Cost?
In a realistic scenario like routine surgery, emergency care for a broken limb, or a complicated delivery, a patient could receive a balance of tens of thousands of dollars or more – even when insured. An article in the New York Times reported that a non-network surgeon, who only assisted in a neck surgery, charged $117,000 for services, over 20 times what the lead surgeon charged (in-network). The same investigative report found that plastic surgeons charged $250,000 following stiches for back surgery, and the insurer only paid $10,000, leaving the patient to pay for the rest.
This practice can have a trickle-down effect on American taxpayers, especially when considering the lack of protection for government-run programs like Medicaid and Medicare. Balance billing is a practice that requires federal intervention.
Possible Solutions to Balance Billing
There are currently a few federal actions that could offer a degree of protection from surprise bills. They run the gamut from require that any portion of the bill go towards a patient’s out-of-pocket maximum to holding the patient not responsible for any in-network costs. Some of the propositions include:
- The 2018 ACA Benefit and Payment Parameter Rule. This prevents health care plans from charging people any more that their in-network amounts for emergency care. It also requires that surprise bills count toward the out-of-pocket maximum, which is important because nearly half of silver plans on the marketplace do not have out-of-pocket limits for out-of-network care.
- The End Surprise Billing Act. This bill aims to end bills for patients who receive treatment at an in-network hospital. Under the provision, patients would be financially harmless for out of network charges above their typical in-network costs. Additionally, the bill addresses the need for a notification and consent process in which patients acknowledge they’re receiving treatment from an out-of-network provider.
It’s important to note that there are certain situation in which balance billing goes against federal guidelines. For payers of last resort like Medicaid and Medicare, for example, balance billing might not be allowed. Medical billing software or claims processing software can help your practice remain compliant concerning these issues.
Balance billing is becoming a national crisis. Without federal intervention, bills will continue to increase, and the excess will be passed on the American taxpayer. There are proposed solutions to address the problem, but we must do more to effectively control the costs of health care and ensure everyone has access to quality care.