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from the meanwhile-don't-get-sick-or-hurt dept.
The bipartisan plan to end surprise ER bills, explained:
The policy proposal, which you can read here, essentially bars out-of-network doctors from billing patients directly for their care. Instead, they would have to seek payment from the insurance plan. This would mean that in the cases above, the out-of-network doctors couldn't send those big bills to the patients, who'd be all set after paying their emergency room copays.
The doctors would instead have to work with patients' insurance, which would pay the greater of the following two amounts:
- The median in-network rate negotiated by health plans
- 125 percent of the average amount paid to similar providers in the same geographic area
The Senate proposal would also require out-of-network doctors and hospitals to tell patients that they are out of network once their condition has stabilized, and give them the opportunity to transfer to an in-network facility.
[...] it's pretty good policy too! That's the general feedback I got from Zack Cooper, an associate professor at Yale University, who, along with his colleague Fiona Scott Morton, has done a lot of pioneering research to uncover how frequently and where these surprise bills happen.
"It is fantastic that they're doing something, and that it's bipartisan," he says. "It's one of those areas where we can agree what is happening now is not good, and this gets us 80 percent of the way to fixing it."
[...] "My concern here is that in-network rates are already quite high, so we're cementing that into the system," he says. "The current world gives emergency physicians tremendous power in negotiating higher in-network rates."
See also: Emergency room visit costs: what's the price of care?
(Score: 2) by All Your Lawn Are Belong To Us on Tuesday October 09 2018, @05:07PM
What can happen (the "suprise billing" they mention) is thus:
1) Patient goes into Emergency Room and gets treatment.
2) The hospital has no contract with that particular insurance company.
3A) Insurance company has some requirement for payment of the patient's care the hospital did not comply with. They deny the billing.
OR
3B) Insurance company pays out-of-network benefits (which are less than the in-network benefits).
4) Hospital takes the cash from the out-of-network company, then bills the patient for the full remaining due balance. Hospital is not obligated to respect any limits to the bill the insurance company requests because there is no contract. (They often do, though.)
5) If that is 3A above, this is the full amount of the ER visit. This can be $1,000 and up, typically around $3,000 but $5,000 isn't unheard of. The patient has no protection from this.
If it is 3B the patient may be on the hook for around $1,500-$2,000 and up. (This is highly variable depending on what is wrong).
The way it works if one the hospital is in network is thus:
1) Patient goes into Emergency Room and gets treatment.
2) The hospital has a contract with the insurer limiting the maximum amounts of the charges possible.
3) Insurance pays the bulk of the bill, requires the hospital to write off a percentage of the bill due to the contract, and allows the patient to be billed around 10% to 20% of the remainder (plus any deductible not yet met).
OR
3B) Insurance finds a BS reason to deny payment of the bill. But the contract does say that the patient cannot be billed for any denials of payment.
4) Hospital takes the insurance money and bills patient the balance that the insurance allows (an "allowable" amount).
5) The patient pays the billed amount, typically from $300-$700. If the hospital screwed up the billing patient owes nothing.
The big difference between the two is that when a contract exists between insurer and hospital there is usually a clause which expressly limits what the hospital can be paid and limits what the patient can go after. The hospital, as a whole, signs the contract because they will receive more patient visits by being in network than not.
In theory if there is no contract then the hospital or doctor may directly bill the patient - there is no obligation to bill the insurance company. In practice this NEVER happens - it's more money to take out of network benefits than bill the patient. Instead they get the insurance money and then bill the full balance to the patient ("balance billing").
What this whole thing says is that it doesn't matter if the hospital or doctor has a contract with the insurer or not. The doctor or hospital is now compelled to bill the insurance and accept what the insurance gives them. Effectively forcing them to act as if a contract is in place but take less money overall for being out of network, without any benefits of being "in network" of better reimbursement rates or expecting greater volume to make up for the lack between what they hospital wants to charge and what the insurance will pay. It forces a contractual relationship where none existed before and none exists after.
This already happens with Medicare, by the way. See a Medicare patient and Medicare Shalt Be Billed, whether the physician wants to or not.
And yes, patients may choose which ER to go to and it does happen. People who have insurance and are smart will know which hospitals are in network and can request an ambulance to take them to that hospital in most jurisdictions. True emergency aside where the crew feels they must have a different hospital because of trauma level or distance aside, most of the time the patient's desire controls.
Last thing I'll note: Absent a contract (and except for Medicare) no hospital or doctor is obligated to bill insurance. It's always done, strictly as a courtesy to the patient and for the convenience of the hospital and physician. If I were to wave my magic wand, this would stop. The patient would be provided with the full bill of services and the patient can file that bill with the insurance company, receive the money and pay the physician's office that money. End the convenience of the triangular billing relationship and let the patient figure out how their insurance and being in network works (or doesn't). Or allow such billings only where contracts do in fact exist for the provider to bill the insurance. (No, this doesn't work for a few reasons. But I think it's a better solution than enforcing contracts that don't exist).
Hope that fills in some blanks.
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