Balance Billing Issues.
My hair has been on fire this week about the skinny provider networks on Exchange Health Insurance Plans so I thought I would write some detail about my biggest fear, which is "balance billing". First a quick reminder of what Balance Billing is. From Families USA:
[I]f a health care provider is not in a plan’s network, that provider may not accept the plan’s payment rates for a service. He or she may want to bill you the difference between what the plan pays for the service and his or her charge for that service. So, even if the plan has not charged you a higher copayment, you might still get a bill from an out-of-network provider for other charges that were not paid by your health plan. This is called “balance billing.”
This article does a nice job of outlining the issues with balance billing. Snippets from the article:
Those [balance] bills can be enormous. A 2010 report by America’s Health Insurance Plans said out-of-network providers often charge exorbitant rates, as high as 70 times the Medicare reimbursement for a similar service. A report issued by New York State in March cited the case of a patient who went to an in-network hospital emergency room after severing his finger in a table saw accident. The finger was reattached by a nonparticipating plastic surgeon, and the bill was $83,000. The insurer estimated the going rate for the procedure was only about $21,000.
In this case, I assume the patient had to pay the other $62,000. The moral of the story is when you visit even an an in-network ER, you should make sure every provider who treats you is in-network. If you visit an out-of-network ER, all bets are off. Hopefully you won't be unconscious.
But balance billing does not occur only during medical emergencies. The New York State Department of Financial Services regularly receives complaints from consumers undergoing elective procedures who carefully selected surgeons and hospitals that participated in their health plans, only to be surprised by bills from nonparticipating providers — like anesthesiologists, radiologists and assistant surgeons — who became involved in their care without their knowledge.
Thus, if you have surgery, make sure that even the doctors you haven't thought about are in-network, or you will be subject to balance billing.
The article mentions that Obamacare provides some protections against balance billing. I was so hopeful until I found out what these protections are. From page 10 of the Families USA ACA Patient's Bill of Rights:
Although the new law does not completely solve this problem (balance billing), it does make some changes that are designed to minimize your bills for emergency care: It sets some standards for what health plans must pay out-of-network emergency providers, and when providers are paid adequately, they are less likely to balance bill.
Your plan must pay the emergency providers the greatest of these three amounts:
1. The amount it pays in-network providers;
2. A payment based on the same methods the plan uses to pay for other out-of-network
services (for example, a percentage of usual and customary fees charged by other
providers in your area); or
3. The amount Medicare would pay for that service.
Some states have even stronger laws to stop balance billing. You can check with your state
insurance department to find out if there are additional laws to protect consumers in your state.
Also, if you have Medicaid, you should not be balance billed [Edit: but of course, your state will want the money from your estate later]
Basically, lawmakers were expecting providers to be happy and fine with payment and won't come after you for more? Wait. They expected large medical corps would take the money and not want more? I call that wishful thinking ... or maybe something else. They knew how great this problem was so they addressed it in the law in a highly neutered way.
Was balance billing already a problem before the advent of these extra skinny in-network provider Exchange plans? Of course. But the ultra-limited provider networks will ensure that when people need hospital or ER services, the chance of accidentally using an out of network provider will be hugely higher. And people will be surprised. They'll think, well I'm having surgery and it's covered! I have to visit the ER, but it's covered. And then they'll get the bills.
Even when insurance plans cap out of pocket maximums, because of balance billing there is effectively NO cap on out-of-network out of pocket maximums.
Note that in a few states, balance billing is not allowed for emergency services. (And in Connecticut and Maryland, it isn't allowed for any covered care).