Surprise medical billing has become a reality for many Americans seeking treatment from the U.S. health care system, with 4 in 10 people saying they had received a surprisingly large medical bill during 2017. In a survey conducted by the Kaiser Family Foundation, 67 percent of people polled noted worry about surprise medical bills. This worry is justified. As a result of soaring costs of care, routine procedures covered under health insurance have become extremely costly when a patient is billed for an out-of-network anesthesiologist who they assumed would be covered by their insurance plan. What follows this assumption is a surprise medical bill of $3,700. Such bills are not a result of frivolous procedures, but arise when even prudent patients, who have done their research, are left with a fee their insurance does not cover.

Surprise medical bills occur when an insured patient seeks care from a health care provider who is not covered by the patients’ health insurance network. When insurance companies have not contracted to pay out-of-network providers the same as in-network providers a medical bill occurs. The amount an insurance company will pay on behalf of a patient to an out-of-network provider may be significantly less than what that out-of-network provider actually charges and that difference leads to a surprise medical bill for the patient. Surprise medical bills come about in a myriad of ways, but are most commonly based on the misconception that although a hospital is considered in-network for a patient’s procedure, all of the health care professionals that service that hospital will be in-network as well. That is incorrect. In emergency situations patients are unable to choose their health care providers resulting in the use of out-of-network providers who send their cost for service to patients directly, like the case of a 19 year-old who received a $27,660 surprise medical bill after a necessary emergency room visit, after being hit by a pole hanging from the back of a city bus.

Illustration of a person looking at a medical bill

photo courtesy of Benefit Focus Blog

Avoiding Surprise Medical Billing

The American Hospital Association (AHA) published best practices and strategies for patients to use in an effort to avoid surprise medical billing. Tactics include asking your health insurance what health providers are covered under their insurance plan and then cross referencing with a provider and a health plan that the specific provider is considered in-network. In the case of an emergency the AHA suggests that it is important to plan ahead by researching emergency departments within the vicinity, checking with your health insurance to make sure those departments are covered and if the emergency department hires their own health professionals. Hospitals hiring their own professionals means that those professionals are more than likely in-network providers.

While such practices are designed protect patients, they place the burden on the insured, as opposed to changing the fundamental issues that lead to surprise billing. Tactics for planning ahead, while ideal, are somewhat unrealistic for individuals looking at a health plan already buried under medical jargon.

Surprise Medical Billing Legislation  

Members of the Senate Health, Education, Labor, and Pensions (HELP) Committee acknowledged the importance of protecting patients from surprise medical bills through the creation of a bipartisan bill. Three methods for tackling the issue were proposed. The first proposed method was an in-network guarantee, where all of the health care providers at a hospital accept in-network insurance rates. The next option, arbitration, would have the health plan and the doctor — if they could not reach an agreement on reimbursement — present to an independent arbitrator their best offers for how much a patient’s out-of-network care should cost. The arbitrator would choose between the two options. The final option, benchmarking, made it into the final draft of the bill. Benchmarking addresses, patients being seen by doctors not in their network, leading insurers to pay those providers the “median in-network rate,” meaning the rate would be similar to what the plan pays other doctors in the area for the same procedure. Some senators remained apprehensive about benchmarking and saw it as another victory for insurance companies as opposed to patients, saving insurance companies the most money.

The House has also taken it upon itself to make sure that patients are protected from exorbitant surprise medical bills. The House drafted a bipartisan multi-prong approach including the need for written and oral notice that care being administered is in or out-of-network and what charges patients have the potential of incurring. While efforts to make this bill come to fruition are significant, the bill does not address surprise billing as it relates to ambulatory services, such as an air ambulance, which are typically independent contractors negotiating fees upwards of $36,000.

Both the House and the Senate seem motivated to bring an end to surprise medical billing taking one step at a time. It is important to note that surprise medical billing is a symptom of a larger issue, a fragmented health care system. Although 2014 ushered in the era of increased insurance coverage, no safeguards were installed to protect patients against the financial burden of utilizing the system. Such incongruity should prompt a critical look into the parts of the system that would lead an insured individual to face financial hardship as a result of pursuing the care they are encouraged to seek.