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States fight out-of-network bill surprise problem

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Use of narrower provider networks to hold down health coverage costs may be drawing regulators’ attention to a related issue: Providers who surprise patients who wanted in-network care with big out-of-network bills.

“Balance billing” often crops up when patients go to in-network hospitals, and then get care from out-of-network radiologists, out-of-network pathologists, or other out-of-network specialists.

In-network providers have usually agreed to accept an insurer’s negotiated reimbursement rates, and to take up any disputes over billing with the insurer, rather than trying to bill the patient for the balance.

Out-of-network providers have no contractual obligation to accept an insurer’s reimbursement rate, and they may try to bill the patients for part all of the balance.

Insurers and agent groups have been talking about the balancing billing problem for years, but usually losing in head-to-head battles with health care provider groups.

Lynn Quincy, a representative from Consumers Union, gave a briefing on the topic Sunday, in Phoenix, at the spring meeting of the National Association of Insurance Commissioners (NAIC). She appeared at a session organized by the NAIC/Consumer Liaison Committee.

The NAIC has appointed the liaisons on the committee, who come from organizations such as California’s Office of the Patient Advocate, Virginia Organizing, and Autism Speaks, to speak for consumers in NAIC proceedings.

Quincy told members of the panel that the size of surprise out-of-network medical bills can range from small amounts to $100,000 or more.

Surprise balance billing can result from outdated provider directories, consumers’ difficulties with understanding their coverage, or a need for immediate emergency care as well as from the providers’ lack of appropriate consumer disclosures, according to a version of Quincy’s slide deck posted on the panel’s section of the NAIC website.

Quincy noted that New York state is implementing a new balance billing law. She said advocates in New York are hoping the law will serve as a model for policymakers in other states.

The New York law, which took effect Tuesday, requires insurers, hospitals and doctors to do a better job of telling consumers which providers are out-of-network and how much the providers expect to charge.

The law protects consumers from out-of-network balance billing in situations in which a consumer is seeking emergency care, or in which a consumer has been not informed that a provider is out-of-network. 

See also: 5 reasons the health out-of-pocket cost fight is your headache, too