Protected From Surprise Medical Bills? Depends Where You Live

Only 21 states have laws that protect consumers from so-called balance billing.

Going to the hospital can be stressful enough. The last thing patients need is a huge bill from a doctor they thought their insurance plan would pay.

But surprise bills are becoming all too common. The problem is gaining wider attention as more consumers choose health plans with narrower provider networks. However, only 21 states have laws that protect consumers from so-called balance billing, according to a report by the Commonwealth Fund.

Balance billing can cost patients thousands of dollars — even if they have health insurance. This happens when someone is cared for by an out-of-network facility or doctor, who then bills the patient for whatever amount is not covered by the insurer.

The “surprise” part of this scenario is that patients may get hit with these bills even when they do their homework and choose an in-network hospital.

That’s because not every doctor who treats patients at a given hospital is in the same insurance networks as the facility. At times you may not even know you’ve received care from an out-of-network doctor until you get the bill.

For instance, many hospitals outsource the staffing of their ERs. The doctors who are part of those staffing companies are often not in-network with an insurer, causing a surge in surprise bills.

In 2014, 14 percent of outpatient visits to the ER and 20 percent of hospital admissions from the ER resulted in a surprise bill for patients, according to a study published in the January 2017 issue of Health Affairs. Ground and air ambulance transports present similar problems.

Even planned procedures with an in-network surgeon may trigger a balance bill if an anesthesiologist, radiologist or other doctor involved in the surgery isn’t in the network.

Federal law requires most health plans to pay a certain amount for out-of-network emergency care. It does not, however, stop doctors and hospitals from turning around and billing the patient for more.

You can go in for a sore throat and end up with a bill for thousands.

State laws protecting patients from surprise bills vary significantly, according to the report by the Commonwealth Fund, a nonprofit organization that promotes health care access and quality.

Some states actually prohibit doctors and hospitals from balance billing. Others hold consumers harmless for the charges — meaning the provider can’t take legal action against the consumer to collect the debt.

“Some providers send balance bills in the hope that patients will complain to their insurer or state insurance department,” the Commonwealth Fund researchers said in the report.

Some states impose standards for what insurers are required to pay in these situations or establish a process for resolving payment disputes. And some, such as California and New York, do both.

A California law enacted in late 2016 requires insurers to pay — and providers to accept — the region’s average in-network rate or 125 percent of what Medicare would pay, whichever is greater. It also established a binding independent review process to resolve disputes between insurers and providers.

Also, some of these laws don’t apply everywhere a patient might get care. For example, New Mexico’s law only protects patients from bills for emergency care. Texas just recently expanded its law to apply to all out-of-network emergency providers, including freestanding emergency rooms, and all out-of-network providers working at a network facility.

Freestanding ERs are a common sight in Texas, with about 250 scattered throughout the state, and many don’t contract with insurers. To make matters worse, patients often confuse freestanding ERs for urgent care centers — and end up paying more for an innocent mistake.

“You can go in for a sore throat and end up with a bill for thousands,” said Amy Suter Hill, senior director of network management with Blue Cross and Blue Shield of Texas.

Balance billing has hit patients in Texas particularly hard. The number of balance-billing complaints grew from 277 in 2013 to 1,331 in 2015, according to data from the Texas Department of Insurance, and nearly $621,700 was returned to customers.

For their part, insurers try to contract with out-of-network providers, but those providers are not always receptive, Suter Hill said.

No matter what state they’re in, consumers should be diligent when possible, Suter Hill said. Avoiding freestanding ERs is a good first step, as is asking if all providers involved in a planned procedure — including anesthesiologists, radiologists and others — are in your plan’s network. Asking upfront is a good way for members to protect themselves from getting a surprise bill in the mail. It may also raise awareness of the issue.

Many patients are in the dark about what they can do if they receive an unexpected bill for an amount not covered by their insurance. A 2015 survey conducted by Consumer Reports National Research Center found 57 percent of people ended up paying the amount in full.

But before paying, patients should “exhaust all their options,” Suter Hill said. Those include:

  • Calling the care provider who billed them
  • Calling the hospital or other facility where they received care
  • Calling their insurance provider
  • Checking with the state insurance regulator to see if protections are in place against balance bills

Taking those steps may lead to a smaller bill. In some cases, it may even eliminate the outstanding amount all together. That, without a doubt, would be a welcome surprise.

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