Protecting Consumers Against Surprise Medical Bills Charles Bell, Programs Director Consumer Reports, Advocacy Division
How Often Do Consumers Get Surprise Bills? Received surprise bills for: - Physician Services (53%) - Lab Tests (51%) - Facility Charges (43%) - Imaging (35%) - Rx Drugs (29%) Source: Modern Healthcare, NORC National Poll, 8/30/18
In-Network vs. Out-of-Network Care PROVIDER (doctor, hospitals) Contract With Insurer No Contract IN-NETWORK OUT OF NETWORK Agrees to offer services at discounted rate Price of Service = LOWER PROVIDERS Submit Claims on Your Behalf All you pay is your copayment, deductible and coinsurance Providers observe Health Plan Quality Standards Discounted rate not negotiated by your insurance company Price of services = HIGHER YOU submit claims le Prior Approval Requirements Providers will generally BALANCE BILL you for your share of the costs Costs charged by provider may be unknown Cost to Pay >> $ Cost to Pay >> $$$$
Challenges with Out-of-Network Surprise Bills Many consumers have NO Out of Network (OON) coverage at all They could be balance billed for all or most of that Out of Network charge directly Even if you do have OON coverage, it may not pay that much; e.g. even 20% or 40% of a high cost procedure (e.g. $100,000) could still be a lot!
Medical Roulette in the Emergency Room Source: NY Times, 11/16/16
Medical Roulette in the Emergency Room Source: Center for Public Policy Priorities, Austin TX 2014 report
2012 Dept of Financial Services Investigation 2,000 consumer complaints a year about medical billing issues Comprehensive set of actions needed to fix the problem
2012 NY Dept of Financial Services Investigation Consumers receive surprise bills for many different reasons: 1. Comparison shopping for insurance policies is difficult 2. Lack of disclosure of provider status for non-emergency care 3. Excessive bills for emergency room care 4. Missing protections for inadequate networks 5. Reduced insurance coverage 6. Difficulties in submitting claims
Claudia s Story Claudia Knafo, concert pianist living in New York City Thought she chose an in-network surgeon Doctor s office photographed insurance card and said everything was fine
Claudia s Story Received bill for $101,000 Received insurance company check for $67,000; sent to doctor Doctor asked for $34,000 balance Health plan called and said they would only pay $3,510; please send money back Caught in dispute for 7 months Considered getting divorced and declaring bankruptcy
2012 NY Dept of Financial Services Investigation Potential solutions: 1. Outright ban on balance billing in Emergency Situations (NY, NJ, CT, other states) 2. Independent Dispute Resolution (NY, FL, NJ, CA) 3. Set default rate for surprise bills (CA) 4. Strengthen Standards for Health Plan Networks 5. Ensure all services at in-network facilities are innetwork to consumer (FL) 6. Require scheduling physician to notify consumers if any services are out-of-network for non-emergency care (NY)
Independent Dispute Resolution (NY) Available to: providers, health plans and uninsured consumers Arbitrator is licensed physician 30 day timeframe for determination Baseball arbitration method designed to encourage parties to be reasonable, drive offers to the middle Make best final offer or Work it Out Among Yourselves Independent Dispute Resolver chooses EITHER the Out-Of-Network Provider Bill or Health Plan Payment
Independent Dispute Resolution (NY) IDR Entity will consider: Whether there s a gross disparity between fees paid to MD by other health plans, and the fees paid to similarly qualified MDs Provider s training, education, experience and usual charge Complexity and circumstance of care Patient Characteristics How much usually billed for service, in-network rate, usual and customary rate, etc.
Independent Dispute Resolution (NY) Benefits: Not a slam dunk for either side Some cases resolved in favor of health plans, others in favor of providers Sends signal to the marketplace for both sides to be reasonable; Work out disputes on your own Gets consumer out of the middle of dispute
Pending federal legislation Six senators led by Senators Cassidy and Carper proposed draft bipartisan federal bill Would create default payment standard for surprise bills for emergency and non-emergency care Payment standard would also apply to selffunded plans that cover 100 million people Senators Hassan and Shaheen also proposed bill creating national IDR system to be available if no state remedy exists
Consumers Need Help Resolving Their Bills 87% of patients don t know which agency in their state is responsible for overseeing health insurance! We encourage policymakers and regulators to investigate this problem and to reach out to the public to get their surprise bill stories Make sure patients can find information on how to resolve surprise bills and submit complaints to the insurance department Many other challenges: faulty networks; facility fees; provider price-gouging; lab tests; miscoded preventive services
Contact Information For more info, contact: Chuck Bell, Programs Director Consumers Union (914) 378-2507 cbell@consumer.org www.consumerreports.org