Patient access staff have nothing whatsoever to do with bills patients receive from providers who turn out to be out of network. Still, staff need to respond effectively when it happens.

“Because we do not bill for independent hospital-based group services, surprise bill complaints rarely present to hospital billing locations,” says Cindy Fry, chief revenue officer at Trinity Health in Livonia, MI. Even so, the patient access department is ready for the complaints with these processes:

Staff on the lookout for issues. “We train our customer service representatives to be more sensitive to listening, identifying, and tracking surprise billing incidents,” Fry reports.

Staff caution patients in advance. During preservice calls, staff review the patient’s out-of-pocket costs. They also talk about the possibility of bills from providers who do not participate in the same payer contracts as the hospital. “We provide customer service talking points and education on how and why a doctor out of network could be assigned to a patient’s case,” Fry says.

If necessary, staff advocate for the patient. “We will intercede if a patient receives a surprise bill from a hospital-based physician,” Fry notes.

Many patients go out of their way to choose hospitals that are in network for their insurance plan. However, some patients may not realize physicians working there could still be out of network. “Patients can still end up with a surprise, costly, out-of-network bill for professional fees,” says Jessica E. Galarraga, MD, MPH, a physician investigator with MedStar Health Research Institute and assistant professor at Georgetown University School of Medicine.

This is even the case with PPO plans, which provide “out-of-network” rates. The problem is that the physicians often are under-reimbursed for out-of-network care. “Plans will often pay arbitrarily low amounts for charges from out-of-network physicians,” Galarraga explains.

This is how “balance billing” comes about. The physician bills the patient for the remaining amount of the costs of the visit that the insurer does not cover. The sheer number of physicians who are out of network at facilities that are in network is a huge issue. On average, 16% of in-network hospital stays had at least one out-of-network charge, according to an analysis of claims data from large employer plans.1 The authors of another study found it happens 22% of the time for ED visits by patients with employer-based insurance coverage.2

Since balance billing harms patients and hospitals, why does it continue? The reasons are quite complex. “Competing interests simultaneously drive high out-of-network provider charges and low out-of-network insurer payments,” Galarraga laments.

Legislation has been passed to curtail balance billing, but so far only at the state level. “There has been a recent movement for state-based approaches to address balance billing,” Galarraga says.

Fewer than half of states have enacted some sort of policy protecting consumers from balance billing. Of these, only six included a payment formula for out-of-network services to which insurers and providers must abide.3,4 “The predetermined payment benchmark approach may have unintended consequences, especially if it does not account for the healthcare market environment, which varies by state and region,” Galarraga notes.

Six states require arbitration between insurers and providers for the payment amounts. “Most of these state-based approaches are tied to rules that protect consumers against extra provider charges for out-of-network visits,” Galarraga explains. Either the pre-established payment formula or arbitration between insurer and provider is used to resolve payment owed to the provider.

However, none of these approaches really solve the problem. “They apply only to the insurers states are able to regulate,” Galarraga says. This does not include employer-based coverage. Thus, balance billing continues for these plans, which are not regulated by the state.

“A federal approach is needed to protect patients from the financial risks of balance billing,” Galarraga argues. “This is gaining bipartisan momentum.” (Editor’s Note: Check out next month’s issue for more about these proposals.)

Consumer protection laws that use the arbitration approach are ideal, according to Galarraga. “This requires insurers and providers to resolve out-of-network payments and prohibits additional charges to patients,” she says.

The high cost of arbitration gives insurers an incentive to reimburse fairly. It also gives providers an incentive to charge reasonable rates for out-of-network care. “This resolves the incentive imbalance currently in play that is harming patients,” Galarraga offers. “It removes patients from the equation of balance billing.”

REFERENCES

  1. Pollitz K, Rae M, Claxton G, et al. An examination of surprise medical bills and proposals to protect consumers from them. Peterson-Kaiser Health System Tracker, June 20, 2019. Available at: http://bit.ly/2kxDpzc. Accessed Sept. 6, 2019.
  2. Cooper Z, Scott Morton F. Out-of-network emergency physician bills — An unwelcome surprise. N Engl J Med 2016;375:1915-1918.
  3. Hoadley J, Lucia K, Kona M. State efforts to protect consumers from balance billing. The Commonwealth Fund, Jan. 18, 2019. Available at: http://bit.ly/2lGBd8A. Accessed Sept. 6, 2019.
  4. Lucia K, Hoadley J, Williams A. Balance billing by health care providers: Assessing consumer protections across states. The Commonwealth Fund, June 13, 2017. Available at: http://bit.ly/2kzbFdx. Accessed Sept. 6, 2019.