Wednesday, February 3, 2010

Trendspotter: Making patients pay when the insurance company won't

By Ken Terry

Imagine you’re a patient in a hospital and you need an emergency procedure such as a CABG or an appendectomy. You have insurance, but the surgeon, who’s in a rush to perform the procedure, neglects to inform you (or doesn’t know) that the anesthesiologist she has chosen is not in your plan’s network. The anesthesiologist doesn’t tell you, either.

As a result, you might get stuck with a bill far higher than what you would pay if had you known — or perhaps not. After all, if you’ve had a heart attack, you’re not likely to demand an in-network anesthesiologist. Nevertheless, you will probably be angry when you receive a bill for what seems like an astronomical amount, representing the difference between the doctor’s charges and the insurance payment.

A Texas law that went into effect last year allows patients who get stuck with big, unexpected medical bills to request mediation in certain situations. The legislation applies only to people who are in fully insured PPOs and who owe an out-of-network provider more than $1,000 after deductibles, coinsurance, and copayments. Patients in self-insured plans, indemnity plans, Medicare, or Medicaid are not covered. Neither are the uninsured. The only providers affected are hospital-based physicians such as anesthesiologists, radiologists, pathologists, neonatologists, and ED specialists.
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An eligible patient may ask for mediation if the hospital-based physician did not disclose that he or she was not under contract to the patient’s health plan and did not disclose his or her charges in advance for the services to be provided. The State Office of Administrative Hearings may select a mediator, or the parties may agree to use a particular mediator.

According to a Dallas Morning News story, mediators are not sure whether they want to participate, because the law requires them to determine whether anybody is acting in “bad faith” during the mediation process. That might represent a hospital administrator not showing up for a hearing or a party withholding material information, for example. The mediators say they are afraid they would never be hired again if they told the Texas Medical Board that a doctor was acting in bad faith.

More troubling is the implication that some providers charge disproportionate amounts to plans they do not contract with and then bill patients for the balance. The newspaper piece notes that most facility-based physicians in North Texas work for one of a few companies that hold contracts with hospitals. Without much competition, they are in a good position to charge whatever they want. But the hospital-contracted firms say that they are in the networks of most major health plans in the area and that 90 percent of their patients are covered by Medicare, which does not allow balance billing.

The Texas law is much more circumscribed than some other states’ limits on balance billing. California has banned all balance billing for emergency care at the urging of the state Department of Managed Health Care. The California Supreme Court last year upheld the legislation in the case of out-of-network ED physicians, who have to accept the patient’s insurance as payment in full. Connecticut, Pennsylvania, and Alabama also prohibit balance billing.

Some observers say that the core of the dispute over balance billing is how much insurance companies should pay out-of-network providers. The use of an Ingenix database to determine the proper amounts that plans should pay non-contracted physicians has been challenged both by New York Attorney General Andrew Cuomo and by medical societies in New York, New Jersey, Connecticut, North Carolina, and Texas. Cuomo won a settlement from UnitedHealth Group, Ingenix’s owner, which has agreed to fund a new, independent database, and Aetna has agreed to do the same. These moves should lead to fairer reimbursement of out-of-network providers. But they are unlikely to end the controversy over balance billing, especially in hospitals and emergency rooms.

As long as physicians feel they’re being underpaid by health plans, most of them will balance-bill insured patients where they can. But not all. One Texas doctor responded to the Dallas Morning News article in these terms: “What is wrong with the anesthesiologist [who balance-bills patients]? Is that why she/he became a doctor? To put people into bankruptcy? Cases like this make me sick. Who am I? I'm a private physician who routinely writes off whatever my patients can't pay.”

1 comment:

  1. It makes absolutely no sense that you go to a contracted hospital and are forced to use non-contracted physicians. I am all for freedom but in most hospitals the hospital-based docs (Anesthesia, radiology, pathology, ED) have an exclusive contract so they should be required to accept in-network fees for all insurances accepted by the hospital.