When you visit the hospital, you do everything right, don’t you?
You’re enrolled in health insurance and understand which services are covered. You’ve checked your insurance company’s network and know which facilities are in-network and which are not.
… You think.
A study published in the New England Journal of Medicine this week found patients who visit an in-network emergency room may be surprised later to learn the doctor who treated them was not employed by the hospital, but rather contracted to provide services there.
Even if the hospital is in your health insurance network, the doctor may be out-of-network and will bill your insurance company accordingly — sometimes for thousands of dollars.
The worst part? You don’t learn this until you get the bill.
Doug Moore of Florida told the New York Times he even called his insurance company on the way to the emergency room in October 2015 to ensure his visit would be covered. A month later, he received an out-of-network bill for $1,620.
“That really makes me mad, and kind of breaks my heart,” he said.
The study looked at billing data from one major national insurer and found this happened 22% of the time, the Times reported.
More than one in five patients who went to a hospital covered by their plan received a bill from a doctor outside of their insurance company’s network.
Surprise! Here’s a Freakin’ Gigantic Medical Bill
This issue, which the researchers have dubbed “surprise billing,” is, unfortunately, on the up-and-up… technically.
The devil is in the details.
I checked in with Pat Palmer, CEO of Medical Billing Advocates of America, to find out what — if anything — we can do to avoid being bamboozled by these unexpected charges.
Palmer’s organization works with consumers to advocate for true and accurate charges on medical bills and helps negotiate for a fair and reasonable price for services. Though surprise billing is just making a splash in the news recently, she said MBAA has seen it for years.
The tone in her voice as she explained the details was enough to make me angry on behalf of even a theoretical patient.
Here’s the crux of it:
If you’ve ever checked into an ER, you know you’ll sign a slew of paperwork. Among that, Palmer explained, “In little tiny language somewhere, it says you may get bills from all these (contracted) people. It doesn’t say anything about the pricing.”
Then she echoed what we’re all probably thinking: “In an emergency situation, no one has the ability — mentally or physically — to read and scrutinize every one of those.”
If a physician were to take you to court to collect payment, she doesn’t believe that “little tiny language” would hold up.
But many patients don’t know this, or don’t want to take it that far. Most of us want to keep bill collectors off our backs and avoid harming our credit scores with unpaid medical debt.
It’s not just ER visits, either. Palmer said patients receive surprise bills from companies who contract with hospitals to provide lab work, radiology or ambulance services, for example.
Sharon Steinmann, The Penny Hoarder’s director of photography, had that experience.
After Steinmann gave birth to her first child in Alabama in 2015, she was surprised to see a bill for about $500 from a company that had apparently contracted with the hospital to run her newborn’s standard hearing test.
“I had just gotten a C-section. That’s major surgery,” Steinmann explained. “I had no idea which tests they were doing.”
She spent five months calling both the hospital and the California-based company that had run the test. Calls to the private company were fruitless.
“They were rude and dismissive and kept telling me the test wasn’t covered by my insurance,” she said.
Finally a sympathetic woman from the hospital contacted the company on her behalf. The woman called back and let Steinmann know she would no longer be responsible for the bill.
“It’s still unclear what the hell happened,” Steinmann admitted.
She didn’t dig for more detail. She was just happy to have the confounding bill dropped.
What to Do When You Get a Surprise Bill
Palmer said her company has successfully advocated to have bills eliminated or reduced for patients who get hit with these surprise out-of-network charges.
Your best defense seems to be arguing that no one explained your financial responsibility clearly.
Contact the billing department of the physician or company who billed you, and explain the physician neglected to tell you they aren’t participating in your insurance network or how much they’d charge you for their services.
On those grounds, work with the billing department to negotiate your bill down.
On the patient’s behalf, MBAA will request a doctor present a signed document showing they explained the patient’s responsibility and the patient agreed to proceed with services.
Of course, that document almost never exists.
(That document probably, actually, never exists, but I won’t speak in absolutes.)
“The hospital is the one that engaged your services,” Palmer explained, when it admitted you to its ER. No one makes you aware of your financial burden in that process.
She said her advocates will explain to a doctor they don’t believe the documents a patient signed with the hospital would stand up in court, “and that’s usually when they start negotiating.”
If the contracted physician or company won’t work with you, you can try your insurance company next. Palmer said you can argue you didn’t know you received out-of-network services, and most insurance companies will reprocess the claim as in-network — with a caveat.
Because it’s in-network, insurance will cover 80-90% of the cost, versus 60-70% they pay for out-of-network services.
The caveat, she explained, is the price of services might still be higher than the price the insurance company has negotiated with in-network providers.
If all else fails, Palmer recommends what sounds a bit like a financial threat to the provider. You can work with your insurance company to retract any payment it’s made to the doctor and instead send that benefit directly to you.
“The physician should not reap the benefits of a participating provider when they’re not participating,” she emphasized.
If the insurance company sends its portion of the payment to you, leaving it to you to ensure the doctor receives payment, you gain significant negotiating power.
Mention this potential recourse to a doctor, and they may be more likely to work with you to negotiate your bill to a fairer price. “They don’t want (to have) that money retracted and count on the patient paying the entire thing,” explained Palmer.
She also emphasizes the importance of getting any agreement in writing.
You may come to an understanding over the phone with a billing department, but you don’t have a record of that. Ask them to send you something in writing to ensure you both live up to your end of the agreement.
A final word: Palmer points out, “We cannot rule out the responsibility of the hospital itself.”
The researchers behind the NEJM study echo this sentiment, suggesting Congress could require a visit be treated as a package that includes both the doctor and the hospital.
No one knows whether the incoming administration will address this issue in its promised health care reform.
Your Turn: Have you ever received a surprise medical bill after visiting an in-network hospital?
Dana Sitar (@danasitar) is a staff writer at The Penny Hoarder. She’s written for Huffington Post, Entrepreneur.com, Writer’s Digest and more, attempting humor wherever it’s allowed (and sometimes where it’s not).