What happens when a patient goes to the emergency room and gets treated by a doctor that’s out of network – even if the hospital facility is in-network? Or if an employee unknowingly gets referred to, and sees, a specialist that is not covered by their insurer? The provider will bill the patient’s insurance, and whatever isn’t covered then gets billed to the patient weeks or even months later.
This process, known as surprise billing or balance billing, can saddle patients with thousands of dollars in debt out of the blue, cutting into their monthly expenses. In 2018, 20% of Americans were faced with unexpected medical bills due to unclear coverage. Needless to say, these surprise bills can be devastating to patients and their families.
The growth in surprise billing is a symptom of the constantly changing health care landscape. As tiered and narrow networks have become more popular, contracting disputes between carriers and providers may be happening more often, with more providers becoming out-of-network. It’s not happening at every hospital, however- researchers found that surprise billing for emergency room services was concentrated among just 15% of the nation’s hospitals. But when it happens, it can be significant. For example, a surprise billing fiasco occurred at one Washington State hospital after outsourcing their emergency room staffing to a third-party vendor. In today’s world of constant mergers and acquisitions in health care, such outsourcing is very common and makes forming networks even more complicated.
As a result, patients may have trouble keeping up with directories and knowing which providers are covered. The insurance carriers rack up administrative costs trying to convey this constantly changing information to their covered members. Furthermore, in an emergency, a patient can’t take the time to call and see if the hospital or provider staffing the hospital is included under their health insurance. Limited consumer transparency into health care prices compounds the shock when a patient receives the bill, which had a median cost between $1,000 and $4,999 in 2018, according to the Federal Reserve.
While surprise billing is not a new phenomenon, increased publicity brought it to center stage in 2019. Notably, former Vox Editor Sarah Kliff scoured over 1,000 ER bills sent to patients in 2018, highlighting a wide range of situations and egregious billing practices. While investigative reporting has helped many patients, it’s clear that more needs to be done.
Ending surprise billing involves many stakeholders, including providers, health plans, consumers, and employers. When states have attempted to address surprise billing in the past, fierce debates erupted about who should ultimately cover the cost of the bill, with powerful lobbies on all sides. “It is a really challenging job when there is so much money in health care, and so many entities are holding that money close that it can feel like people forget that health care is ultimately about the patient” says Suzanne Delbanco, CPR’s executive director. Different solutions might be noteworthy and all have varying degrees of impact on the patient. These policies will be discussed in part two of this blog.