Health insurance agents and brokers have been trying to get someone out there to do something about the balance billing problem for years.
The most upsetting version of the problem occurs when a consumer with a network-based health insurance plan goes to an in-network hospital or an in-network clinic — or makes other reasonable efforts to seek in-network care — and then discovers, when the bill comes, that one or more of the providers was out-of-network after all.
In many states, the out-of-network provider has no obligation to hold the billed amount to a “reasonable and customary charge,” a “usual and customary charge,” a charge based on a predetermined multiple of the Medicare rate, or any other amount related to what patients typically pay. The provider may start out demanding an amount far higher than the average amount patients typically pay for that kind of care.
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The provider will often knock the amount demanded down if patients call to complain, but, in some cases, the provider will stick to the original billed fee, or discount that original fee down to a “discounted” amount that is still much higher than the typical amount.
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JoAnn Volk of the Georgetown University Center on Health Insurance Reforms gave a presentation on how states are handling the issue Sunday, at an in-person Health Insurance and Managed Care Committee session in Chicago, at the summer meeting of the National Association and Insurance Commissioners (NAIC).
The committee has completed work on the major regulatory projects needed to bring most Patient Protection and Affordable Care Act of 2010 (PPACA) requirements and programs to life. Balance billing may rise to the top of state regulators’ major medical insurance to-do lists, as they wait for the detailed reports they need to respond to how PPACA has affected health insurers’ finances.
For more about what Volk said, based on a written version of her presentation included in the Health Insurance and Managed Care Committee’s packet, read on.
1. About a quarter of the states have set some kind of statutory limits on balance billing.
Consumers who do not understand their plans, or ignore plan network rules, could end up receiving bills for out-of-network, and being responsible for the balance not paid by the insurer, for routine care received on an outpatient basis.
But Volk’s colleagues found that most of the states with statutes responding to the issue focus on balance billing related to emergency care, or balance billing resulting from out-of-network providers who provider care at in-network hospitals.
2. Many ban use of balance billing, or consumer responsibility for balance billing, in emergency situations.
Volk’s colleagues looked closely at the rules in effect in California, Colorado, Florida, Maryland, New Mexico, New York and Texas.
The analysts could find no balance-billing statutes in New Mexico when they conducted their review.
The other six states either banned balance billing for emergency care or required insurers and providers to resolve any disputes about billing for out-of-network emergency care with each other, without getting the patients involved.
3. Many have set up some kind of dispute resolution process to resolve fights about what the consumers say are surprise bills.
Five of the seven states included in the review had set up processes to help plans and providers work out their differences over billing conflicts.
New York state, for example, offered an independent dispute resolution service at the request of either the provider or the plan.
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The analysts found that some states’ approaches seem to be more effective than others at keeping the consumers out of the disputes.