"Balance Billing" from In-Network Hospitals Leaves Patients Shocked

In emergent situations paperwork is often the last thing on a patient's mind. Patients that have the wherewithal to remember to choose an in-network hospital to avoid large bills for treatment assume that they may be treated by any physician in the hospital and their insurance will cover the treatment. Unfortunately, many find out this is not true several weeks later with the arrival of a hefty "balance bill."

Balance billing is a common practice that bills the patient for the remainder of the cost of treatment that the insurance refused to pay because the treating physician was not out-of-network, even though she practices at a hospital that was in-network.

These unexpected bills can have huge consequences on patients and their families. NBC 5, in Texas, recently ran a story about Melinda Allen, a patient at the Texas Harris Methodist Hospital emergency room. Allen woke up on a Saturday with intense abdominal pain. She had her husband take her a hospital she knew was in-network. Several tests later Allen was diagnosed with an ovarian tumor large enough to require surgery.

The billing was less straightforward than her treatment plan. Allen paid nearly $5,000 out-of-pocket for her treatment, in addition to her $1,500 monthly premium. Allen assumed her insurance would cover the rest since she was treated at an in-network hospital. Allen was shocked when she later received a bill for nearly $700. 

The amount of the bill Allen received  was the balance left over from the price of the treatment charged by the emergency room doctor and the price her insurance company felt was appropriate. 

This practice leaves the patient to sort out the claim with their insurance company. "People are really vulnerable when they go into an emergency room," Stacey Pogue of the Center for Public Policy Priorities explained. "It's unfortunate, again, that we're put in that position because insurance companies and doctors can't decide what is appropriate reimbursement."

In situations like Allen's where does the blame fall? Allen chose an in-network hospital. Physicians, by law, are not allowed to ask about insurance and must treat all patients regardless of their ability to pay. Should the in-take process include a list of in-network and out-of-network physicians? 

Affordable Care Act and Emergency Rooms: Enrollment Opportunity and Visits

NPR and Kaiser Health News reported Tuesday that California hospitals are beginning to provide emergency room patients with information on signing up for health insurance plans, expanded Medicaid programs, and possible subsidies to lower the cost of health insurance for those who qualify. Hospitals such as O’Connor Hospital are hiring more staff dedicated to health benefits and insurance coverage to reach out to the 5,000 uninsured patients their emergency department treats each year.

Benefits coordinators Araceli Martinez reports more uninsured patients view health insurance as an affordable possibility after Martinez provides them with information on coverage options. However, most uninsured that pass through her door find the process of purchasing insurance on their own for the first time daunting and confusing. About half of poor uninsured adults are unaware that they would qualify for Medicaid.

There is an economic motivation for hospitals to sign patients up. Increasing the number of patients with private insurance increases reimbursement rates. This is especially appealing at a time when hospitals are facing Medicare cuts. The expansion of Medicaid allows hospitals to receive payment retroactively for medical treatments if the patient enrolls in Medicaid. The retroactive payments may be applied to treatment received up to three months prior to the patient’s enrollment.

Jim Dover, president and CEO of O’Connor Hospital, explains that dedicating resources to enrolling patients in healthcare insurance plans is also a worthy goal because the newly insured patients “don’t have to come to the ER for common problems.” This is a common argument for increasing Medicaid enrollment.

The argument came under fire recently when Science published a study that concluded emergency room visits increased with the expansion of Medicaid. The study found that people recently enrolled in Medicaid went to the emergency room 40-percent more frequently than others, even when the conditions could be treated less expensively in a doctor’s office.

"Increasing coverage and seeing people use more medical care isn't necessarily a bad thing," said Dr. Renee Hsia, an associate professor of emergency medicine at University of California San Francisco and a health policy researcher who wasn't involved in the study but reviewed it for Science. "The outcome that we desire is not that we don't have people going to see their doctors anymore. The outcome is that we have people who feel protected from (financial problems and) seeking care when they feel they need it."

Sources for this Blog:

Kaiser Health News, “Emergency Rooms Are Front Line for Enrolling New Obamacare Customers” 

NPR, “California Hospital Workers Pitch Obamacare to ER Patients” 

Kaiser Health News, “Medicaid Expansion Boosted Emergency Room Visits in Oregon, Study Finds”

Associated Press story in Seattle Times, “Study finds Medicaid expansion drove up ERvisits”