I spent the better part of five months haggling with multiple “customer” service representatives at a Chicago hospital over a credit we were owed.
Without going too far down the rabbit hole, the crux of the problem was a series of bills we received. Admittedly, I could have paid closer attention to the duplicate billing, but that leads to another set of issues surrounding the inability of many providers to offer a patient-friendly, consolidated statement. The pain point here was being hit with out-of-network charges with no advance warning.
Surprise!
Thankfully, the charge was only a couple hundred dollars and has been resolved. Others are not as lucky.
Comprehensive data on the cost of surprise and balance billing are hard to come by, but a 2016 New England Journal of Medicine study found that emergency department charges for an out-of-network physician were eight times higher than Medicare rates and 2.6 times higher than in-network commercial rates. That averaged out to $623 of out-of-pocket costs. Then there are those headline-grabbing horror stories of families being hit with surprise bills reaching tens of thousands of dollars.
It's a problem that touches thousands of people every year. A 2016 Health Affairs study found that 14% of ED visits and 9% of hospital stays were likely to result in a surprise out-of-network charge. And good luck if you are admitted to the hospital via the ED—those resulted in 20% of patients getting a shock in the mail.
The situation isn't isolated to out-of-network charges. NORC, a nonpartisan research outfit at the University of Chicago, recently found that 57% of American adults were confronted with a medical bill they thought insurance would cover. Tracking with other national studies, 20% of respondents said their surprise bills resulted from a doctor being out of network.
So who is to blame?
As with virtually everything, providers point the finger at insurers and vice versa. Neither side wants to take full ownership because, as we know, narrow networks just happen.
If we step back, everyone is preaching the gospel of moving to consumerism. Is there anything less consumer friendly than hitting someone with a surprise bill after going through the ordeal of being in the hospital?
Consumers aren't buying the industry's rhetoric. According to the NORC poll, 58% of people say insurance companies are “very responsible” for surprise bills; 45% pin it on hospitals.
The absence of a meaningful industrywide action has created an opening for lawmakers and regulators.
Already, 21 states have enacted some form of consumer protection from balance billing. But the safeguards are limited. Only six states have taken a comprehensive approach, including extending extra protections to both ED and in-network hospital settings, holding consumers harmless from extra charges and prohibiting providers from balance billing, according to a Commonwealth Fund analysis.
And let's not forget that nearly 60% of us get coverage from self-funded employer plans, which are governed by the feds under ERISA, not the states.
That's not been lost on Congress. Last month, a bipartisan group of senators introduced the Protecting Patients from Surprise Medical Bills Act.
The bill would essentially protect patients from large out-of-network charges if they were being treated at an in-network facility.
Federal regulators have also taken notice. In the spring, the CMS put out a request for information on how it could improve price transparency, highlighting the concern around surprise out-of-network bills. In its final 2019 inpatient payment rule, the agency noted that suggestions and comments could be used in future rulemaking.
Public outrage over surprise and balance billing is picking up steam. It's up to the industry to decide if it can find a solution or if it's willing to roll the dice and let policymakers figure it out.
