Brooke Army Medical Center / Creative Commons
Is there anything more emblematic of our troubled health care system than a patient receiving a “surprise bill” in the mail after receiving emergency care?
The most egregious form of surprise medical bills, also known as balance bills, happen when an out-of-network provider bills a patient despite having delivered care at an in-network facility. Often this occurs when a patient goes to an emergency department or hospital covered by insurance, but then is unwittingly seen by a physician who is not contracted with that insurance group.
As writer and physician Elizabeth Rosenthal recently wrote, “Imagine if you paid for an airplane ticket and then got separate and inscrutable bills from the airline, the pilot, the co-pilot and the flight attendants.” Even worse than that, the co-pilot could then tell you he is out-of-network and is going to bill you the full amount.
This practice of medical surprise out-of-network bills should be illegal. At this point, only our State Legislature can really solve the problem of surprise bills.
In 2009, Texas led the way by being the first state to put a mediation system in place for surprise bills. This past year, Senate Bill 507 was expanded to include mediation eligibility for bills of more than $500 from any provider type, facility bills from emergency care including those from free-standing ERs, and to patients covered by the Teacher Retirement System (TRS) health plan and the self-funded TRS ActiveCare program. This lattermost change added an estimated 680,000 individuals to be eligible for the mediation process. Prior to these changes, only bills from certain specialty providers were eligible for mediation, and ER facility bills were not eligible.
We should all thank our representatives for this bipartisan legislation, but it is nowhere near enough.
One indication the system is inadequate is how rarely it is utilized. A 2015 Consumer Reports survey found that one in 14 privately insured adult Texans reported getting a surprise, out-of-network bill within in the previous two years, totaling about 250,000 Texans. However, according to the Department of Insurance, only 3,824 Texans have used the mediation process from its implementation in September 2009 through Dec. 31, 2016.
Clearly, the system is not as accessible as it needs to be.
One major reason is it is the responsibility of the patient to start the mediation process. This puts the onus on the patient to gather information, submit paperwork, make phone calls, and attend at least one formal phone meeting. And that assumes they recognize their bill is eligible for the process in the first place. Senate Bill 507 should help with this issue, because now it specifies that when surprise bills are sent to patients, the sender must include language indicating the bill is a balance bill for out-of-network services and that it may be eligible for mediation. It is possible, however, that this language will be lost in all of the other fine print on the mostly indecipherable bills.
Other states have passed much stronger protections than Texas has. New York passed a law in 2015 that requires hospitals negotiate directly with the insurer for all out-of-network payments, across all health care settings. This is how it should be. The patient is kept harmless from surprise medical bills and the arm wrestling can happen between those best equipped to deal with it.
Making the problem worse for patients, emergency departments in Texas can essentially charge whatever they want for services. Prices vary without any logic or reasonable guardrails. According to a recent study, emergency physicians reading an EKG (electrocardiogram) of your heart – a mostly simple task performed many times each day – charge patients anywhere from $18 to $317, which is 20 times the rate that Medicare would pay. If the doctor who read that EKG happens not to be in your network, guess who will be billed for that full $317?
The Texas Legislature should consider capping all charges at a reasonable level above Medicare allowable fees. There would still be variation in charges, but patients would no longer be subject to extreme mark-ups.
It is great that our Legislature was ahead of the curve in 2009, but even with recent changes, our state has fallen far behind. Texas should lead once again in protecting patients from surprise medical bills.