The rapidly rising costs of insurance premiums emerged as a dominant focus after the presidential election. However, there is another major problem in the health care financing infrastructure that does not seem to get enough policy discussion – “surprise bills” sent directly to patients following care by physicians who may be working at an in-network facility but who are not actually in the patient’s insurance network.
Imagine going to your local emergency room, knowing that the hospital is considered in-network by your insurance company, then a few weeks later receiving a bill for thousands of dollars to pay the out-of-network physician. You might think it was a mistake. You would be wrong.
Hospitals generally contract with a group of emergency physicians to staff their emergency departments and also contract with insurance companies to provide in-network coverage in their emergency departments. The emergency physicians themselves, however, contract individually with the insurance companies, resulting in gaps of in-network coverage where the emergency room itself is covered, but the physician providing care is not. Patients only discover this gap by receiving a bill for the care provided by the out-of-network emergency physician.
According to one study, 22% – more than one in five – of emergency department visits at an in-network facility involved out-of-network physicians. In McAllen, Texas, 89 percent received “surprise bills.” In other places, such as South Bend, Indiana, almost nobody received surprise bills.
In 2014, Texas studied this problem, finding that among the three largest health insurers by market share in the state, between 41-68% of dollars billed at in-network facilities were billed as out-of-network emergency room physician services. In addition, between 21-59% of in-network hospitals had NO in-network emergency room physicians, meaning that for some insured patients in Texas, a visit to more than half of the emergency rooms in their network would likely result in a bill for out-of-network care.
But before we start laying all of the blame at the feet of emergency physicians, emergency room departments are required by law to see and treat everybody in need, thanks to the Emergency Medical Treatment and Active Labor Act, which guarantees access to emergency medical care, but not specifically requiring insurers to pay for that care. Insurers know this, thus making it difficult for emergency physicians to negotiate effectively with insurers. The concern is that without the option of “balance billing,” these physicians will be subjected to increasingly predatory pricing from insurance companies who will hold all of the leverage.
But bankrupting patients cannot be the solution. That is unacceptable and should not be tolerated.
Insurers point the finger at physicians and hospitals, while physicians point it right back at insurers. While there is not just one villain here who can take all of the blame, there is also a lack of heroes in this story.
Out-of-network emergency department billing is not a problem that can be solved on its own, or by any one group within the health care financial system. This is the type of problem that requires policy.
A recent New York Times article pointed to U.S. Rep. Lloyd Doggett of Austin who introduced legislation in 2015 to help address the issue but was met with indifference from his colleagues, despite Texas’ being one of the worst offending states.
It is up to all of us to now replace that apathy with a distinct call to arms that catches the attention of our representatives.
California has already passed a bipartisan bill to protect patients against surprise out-of-network medical bills. Patients who receive care from in-network facilities in that state would only have to pay in-network cost sharing. A few other states, such as Florida, have similar laws.
Texas allows patients to participate in a mediation process to reduce balance bills by working with physicians and insurers, but the process is limited to certain types of bills and plan types, and the billed amount must exceed $500 per provider to be eligible. The system is underutilized and does not protect patients as well as it could.
Texans cannot remain at risk of unexpectedly getting stuck with a surprise out-of-network physician bill after visiting an emergency department. This threat should now be considered an emergency.