Let’s say a patient visits a hospital or a large clinic, which he had chosen because it was listed in the network provided by the insurance company. Later, the patient gets a nasty surprise in the mail: a larger-than-expected bill for their care.
It could be a few hundred dollars higher, or several thousand. In any case, the patient is upset and angry. He had, after all, done his due diligence by choosing an in-network hospital. What he didn’t know was the in-network hospital contracts with out-of-network providers, and one of them provided his care.
More patients are reporting sticker shock from a surprise bill — where patients are asked to cover the costs for the care from an out-of-network member of the medical team during a hospital or emergency-room visit. In the state of Texas, one health-insurance provider is billing for out-of-network ER about 68 percent of the time, according to the Center for Public Policy Priorities. And these are for patients who were treated at in-network hospitals.
Also, nearly one-third of patients surveyed by Consumer Reports National Research Center said they were surprised by higher medical costs when their private insurance company paid less than expected; of those nearly a quarter said they were billed for a provider’s care without prior knowledge the doctor wasn’t in the network.
This is putting hospitals into the center of the battle, as patients, insurers and providers fight over who is responsible for these costs. There are two causes behind this trend.
• Narrower insurance networks, in an effort to control premium costs.
• Providers are not contracting with some insurance companies because they feel their rates are below fair market value.
A few states, such as New York and California, have passed laws to protect patients. In the meantime, other solutions have been proposed or put into effect, including:
• Some hospitals keep patients out of the conflict by negotiating with providers and insurance companies.
• Some providers and hospitals say insurance companies should change their billing practices and collect the balance from patients instead of leaving it to hospitals and providers.
• Some hospitals have eliminated the surprise element by requiring outside providers to contract with the same health networks, such as Boca Raton Regional Hospital in Boca Raton, Florida, and Jewish Hospital in Louisville, Kentucky.
• The Robert Wood Johnson Foundation has called for states to pass patient-protection laws, such as patient notification before care is given and requiring insurance companies to pay a certain amount for care.
In any case, as more patients end up shouldering more of the costs of their medical care, taking some of these proactive steps to close the coverage gap could help hospitals and providers keep their accounts receivable under control.
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