'Surprise bills' shock patients who choose in-network care

Suffering from lower back pain last fall, Wes Bailey made sure to go to an emergency room in his insurance plan's network.

The Nashville resident and keyboardist for local band Moon Taxi knew the visit would generate a hefty price tag. But he was in enough pain that an urgent care facility advised he go to an ER. He wanted to follow the medical advice and knew the cost would be tempered by his insurance.

Then came the bills.

What Bailey didn’t know — and most people don’t — is that doctors who work in a hospital are not always employees of the hospital and covered by the same insurance policies. Often, emergency room doctors, anesthesiologists, pathologists and radiologists are employed by an independent company, such as EmCare or TeamHealth, that contracts with the hospital.

Because patients get billed by individual providers, a patient can go in-network but still get hit with an out-of-network charge.

Bailey learned this the hard way.

He received a $600 out-of-network bill from an emergency room doctor who saw him briefly, after he'd received a $1,900 bill for the in-network ER visit and a smaller bill from the provider who read the CT scan results.

“A $1,900 medical bill is a lot of money for me,” Bailey said.

The inadvertent out-of-network bills are called “balance billing” because patients pay the difference between the insurance plan's out-of-network benefits and the provider's rack-rate charge, which is often considerably higher than the negotiated amount with an insurer. Some insurance plans offer little to no out-of-network coverage.

Hospitals, including the TriStar Health ER where Bailey went in-network, encourage the doctors to accept the same insurance plans and networks as the hospital — but it’s not required.

“We are sensitive to additional bills that patients may receive from affiliated physicians that practice at our hospitals,” said Kimberly Johnson,  director of communications for TriStar Health. ”We encourage those physicians to participate in the same insurance contracts in which our hospitals participate.”

The balance bills, also known as “surprise bills," are drawing the attention of patient advocates and legislators, among others, across the country.

The practice puts an increased onus on patients to find out exactly who is providing their medical care in order to make financially savvy decisions.

But checking into the network status of any provider who could come into contact during a hospital stay can be challenging. A patient's recourse is limited before or after the procedure if the provider is out-of-network.

Patients do not receive a single bill for a hospital stay. Instead, they receive a bill from the individual providers who treat them. For instance a patient scheduled for a surgery at an in-network facility with an in-network surgeon may get an out-of-network bill from the anesthesiologist.

The charges can be two, three, five or 10 times the amount of the negotiated rate, said Erin Fuse Brown, an assistant law professor and faculty member of Georgia State University's Center for Law, Health and Society.

Health insurance networks — the complement of providers accessible under a health plan — are narrowing as employers and insurers try to manage costs.

Even those patients who try to use the benefits correctly can find themselves facing an unexpected bill because one provider that touched some part of the visit was out-of-network.

"It was a disappointing and an eye-opening experience," Bailey said. "I'm still in the process of fighting that bill. The doctor wasn't in my network and I didn't know that."

Farm Bureau Insurance of Tennessee is working with state Rep. Ron Travis, R-Dayton, on legislation aimed at curbing some surprise billing situations.

Under the proposed legislation, hospitals or the doctor would have to notify the patient ahead of a scheduled procedure that a provider is out-of-network or accept the in-network negotiated rate. A reasonable cost estimate would also be required.

The proposed legislation would not have impacted Bailey’s situation because that arose from a trip to the emergency room.

“You as a patient really have no mechanism to find out ahead of time if they are in-network or out of network,” said Benjamin Sanders, executive director of government affairs for Farm Bureau Health Plans.

Sanders said the insurer is interested in increasing transparency because “increasingly our members tell us that this is a problem.”

Several lawmakers, including state Rep. Sabi Kumar, R-Springfield, and state Sen. John Stevens, R-Huntingdon, are also delving into the issue.

Kumar, a general and vascular surgeon, said some providers prefer the current system “because they get to charge their full fee.”

The Tennessee Medical Association agrees the patient is often the loser when it comes to balance billing, but the group wants a proposal that doesn’t place the responsibility on the provider, who may not have immediate access to the patient’s insurance details.

Hospital staff are supposed to inform people they may be treated by an out-of-network provider. But, with the fast flow of information and consent forms, patients said they are frequently unaware of that, even at in-network facilities.

Yarnell Beatty, TMA’s vice president of advocacy and general counsel, said some providers don't see the patient — only test results — and don't see the insurance card so they don't know if they are in-network.

Beatty said balance billing is an issue for providers — more than half of the bills owed by patients don’t get paid — and one that calls into question “the adequacy of networks.” Beatty said that providers should not be punished for choosing not to negotiate with insurers.

“Who are you going to penalize, the health care provider who has studied for years to learn his craft and has the right to negotiate with the payers that are being reasonable,” Beatty said. “There are a lot of downsides to having any kind of mandates. It’s not fair to the provider. It’s not fair to the patient.”

Joe Burchfield, vice president of government affairs and communications at the Tennessee Hospital Association, said hospitals and providers have a role in informing the patient, but he thinks insurers should take more responsibility for network education and information.​

“We’re not in a position to know with certainty whether a radiologist or anesthesiologist will be in-network,” Burchfield said. “We do take it seriously. We certainly are willing to work with all stakeholders.”

Travis said a constituent brought the issue to his attention. When he started the legislation, he wanted it to be a transparency bill that had providers inform patients that "look, we're out of your network. We may be sending you a bill."

"I'm not picking on the doctor. I'm not picking on the hospital," Travis said. "It's about protecting the patient."

The proposal was not on the radar at the beginning of the legislative session in January; it surfaced about three weeks ago on a placeholder bill, called a caption bill. The measure was slated for consideration under the consumer protection part of state code but has since been moved to the section that governs hospitals.

Negotiations have gotten messy as the legislators try to arrive at a plan that all sides agree on, but there is opposition from a variety of provider groups.

Beatty suggested health plans and the patient work together with the facility to ensure that as many people as possible are in-network.

“You’re never going to get a 100 percent guarantee,” Beatty said.

If the legislation gets sent to summer study — a process by which legislators can take a deeper dive into a subject before the next session — hospitals and providers probably won't escape the conversation in the coming year, experts said.

There is an emerging push to resolve balance billing issues across the country; New York and Connecticut have some protections in place.

"If this passes in Tennessee, it would be a sign of what's to come in a lot of other states," said Georgia State's Fuse Brown. "If it doesn't pass, it will probably be an issue that consumers are getting really activated about. When people find out about it, and that it's happening fairly commonly, they get really mad."

Bailey, who is contesting the out-of-network charge, knows that without the negotiated rates under his insurance plan the visit would have been “catastrophic” to his finances.

“It’s a really shady and unfair way of paying doctors even more money,” Bailey said. “I hope this changes.”

Reach Holly Fletcher at 615-259-8287 or on Twitter @hollyfletcher.