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Surprise Medical Bills: What Are They & How Can You Avoid Them?

July 30, 2018

In Pennsylvania, there is a general consensus that we have a problem with surprise medical bills, but action is needed to protect people from these bills.

What is a Surprise Medical Bill?

Let’s say you do your homework and know the hospitals covered by your health plan. You break your arm and go to an in-network emergency room. You get an x-ray, get treated, pay your co-pays, and go home. Two weeks later you get a bill for $150 from the physician who read your x-ray. This bill is certainly a “surprise” that most patients assume is simply a part of their health plan, or something that they just owe without questioning it. They pay the bill — if they can– and move on, although with less in their pocketbook.

Most of these bills result from “hidden” or “invisible” providers. These are providers the patient had little to no choice in using, and often they didn’t even “see” the provider. It’s often a provider, like a pathologist or anesthesiologist, who reads or interprets a test or is a part of a larger care team, but not the main provider.

Surprisingly, the vast majority of these providers are practicing within an in-network hospital or facility. They are simply subcontractors who are “out of network” even though they work for a larger facility that is covered by your health plan. This is why it’s so hard to prevent surprise medical bills and why we need a legislative solution. There is very little the average person can do to prevent a surprise medical bill.

What’s the Scope of the Problem?

How often does this happen? We simply don’t have conclusive data. Here’s what we do know, thanks to the Kaiser Family Foundation:

  • One national survey found close to 1 in 10 privately insured individuals used out-of-network care in 2011; 40% of those claims involved surprise (involuntary) out-of-network claims. This survey found that most surprise medical bills were related to emergency care.
  • In 2011, the New York Department of Financial Services studied more than 2,000 complaints involving surprise medical bills, and found 90% of surprise medical bills were not for emergency services, but for other in-hospital care.
  • A private study of data reported by health insurers in 2013 to the Texas Department of Insurance suggest that emergency room physicians often do not participate in the same health plan networks as the hospitals in which they work. Between 41% and 68% of dollars billed through the three largest insurers by for emergency physician care at in-network hospitals were submitted by out-of-network emergency physicians. Between 21% and 45% of these plan’s in-network hospitals had no in-network emergency room physicians.

This tells us a couple of things. The problem is happening in both emergency settings and other in-hospital care. It’s happening to a significant number of individuals, and these individuals have little choice when it comes to avoiding this care. It also hurts their financial well-being. According to the Brookings Institute, one third of adults having trouble paying medical bills say the problem stemmed from surprise out-of-network care, and 70% of people having trouble paying out-of-network bills were unaware the care was out-of-network. The real harm is that people suffer financial consequences from something out of their control.

How Can We Protect People Against Surprise Medical Bills?

Less than half of states have any protections against surprise medical bills, with only six states having comprehensive protections.Pennsylvania has limited protections in certain emergency situations.  We have an opportunity to join those states with comprehensive protections. In the 2017-18 legislative session, two bills have been introduced: House Bill 1553 and Senate Bill 678. Both of these bills accomplish several key things. They:

  • Ban the practice of surprise medical billing in most emergency situations.
  • Ensure consumers aren’t liable for additional costs associated with surprise bills and resolve surprise bills through a dispute process between a provider and an insurer.
  • Guarantee consumers have clear, current, and consumer-friendly information.
  • Include protections in non-emergency situations for all private health insurance.

What Can You Do Now to Protect Yourself?

We need to build momentum on this issue and capture some of the harm that surprise medical bills are inflicting on Pennsylvania consumers.  In the meantime, here’s some solid advice from the Center for Health Insurance Reforms on how to avoid unexpected charges:

  • When possible, use provider directories and other plan-provided information to locate in-network providers.
  • When possible, ask providers whether they are in the plan’s network. If providers are not in network, ask whether they will accept the plan’s payment as payment in full.
  • In cases where a provider sends a balance bill, review the health plan’s explanation of benefits and any notices about consumer rights.
  • Before paying a balance bill, contact both the health plan and the provider. Ask whether the plan is willing to pay the bill. If not, ask whether the provider will accept a lesser amount.
  • Contact the Pennsylvania Insurance Department at 877-881-6388 to see if any remedy is available under the state’s laws.

If you need help figuring out what to do, PHAN is always here to help at 877-580-3642.