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'Surprise bills' shock those who choose in-network care

Holly Fletcher
The Tennessean
Wes Bailey, keyboardist for Nashville band Moon Taxi, was hit with some costly surprises after a trip to an in-network emergency room in the fall.

NASHVILLE — Despite going to an emergency room in his insurance plan's network, Wes Bailey was still stuck with hefty bills.

The keyboardist for local band Moon Taxi was in enough pain in his lower back that an urgent care facility advised he go to an ER in the fall. He wanted to follow the medical advice and knew the cost would be tempered by his insurance.

What Bailey didn’t know — and most people don’t — is that doctors who work in a hospital are not always employees of the hospital and covered by the same insurance policies. Often, emergency room doctors, anesthesiologists, pathologists and radiologists are employed by an independent company that contracts with the hospital.

Because patients get billed by individual providers, a patient can go in-network but still get hit with an out-of-network charge.

Bailey received a $600 out-of-network bill from an emergency room doctor who saw him briefly, after he'd received a $1,900 bill for the in-network ER visit and a smaller bill from the provider who read the CT scan results.

“A $1,900 medical bill is a lot of money for me,” said Bailey.

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The inadvertent out-of-network bills are called “balance billing” because patients pay the difference between the insurance plan's out-of-network benefits and the provider's rack-rate charge, which is often considerably higher than the negotiated amount with an insurer. Some insurance plans offer little to no out-of-network coverage.

Hospitals encourage the doctors to accept the same insurance plans and networks as the hospital — but it’s not required.

“We are sensitive to additional bills that patients may receive from affiliated physicians that practice at our hospitals,” said Kimberly Johnson, director of communications for TriStar Health in Nashville. ”We encourage those physicians to participate in the same insurance contracts in which our hospitals participate.”

The balance bills, also known as “surprise bills," are drawing the attention of patient advocates and legislators, among others, across the country.

The practice puts an increased onus on patients to find out exactly who is providing their medical care in order to make financially savvy decisions.

But checking into the network status of any provider who could come into contact with a patient during a hospital stay can be challenging. A patient's recourse is limited before or after the procedure if the provider is out-of-network.

Patients do not receive a single bill for a hospital stay. Instead, they receive a bill from the individual providers who treat them.

The charges can be two, three, five or 10 times the amount of the negotiated rate, said Erin Fuse Brown, an assistant law professor and faculty member of Georgia State University's Center for Law, Health and Society.

Health insurance networks — the complement of providers accessible under a health plan — are narrowing as employers and insurers try to manage costs.

Even those patients who try to use the benefits correctly can find themselves facing an unexpected bill because one provider that touched some part of the visit was out-of-network.

"It was a disappointing and an eye-opening experience," Bailey said. "I'm still in the process of fighting that bill. The doctor wasn't in my network and I didn't know that."

Obamacare reduces maximum out-of-pocket costs, but not enough for some

In legislation being worked on in Tennessee, hospitals or the doctor would have to notify the patient ahead of a scheduled procedure that a provider is out-of-network or accept the in-network negotiated rate. A reasonable cost estimate also would be required.

The Tennessee Medical Association agrees the patient is often the loser when it comes to balance billing, but the group wants a proposal that doesn’t place the responsibility on the provider, who may not have immediate access to the patient’s insurance details.

Hospital staff are supposed to inform people they may be treated by an out-of-network provider. But, with the fast flow of information and consent forms, patients said they are frequently unaware of that, even at in-network facilities.

Yarnell Beatty, Tennessee Medical Association’s vice president of advocacy and general counsel, said some providers don't see the patient — only test results — and don't see the insurance card so they don't know if they are in-network.

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Beatty said balance billing is an issue for providers — more than half of the bills owed by patients don’t get paid — and one that calls into question “the adequacy of networks.” Beatty said that providers should not be punished for choosing not to negotiate with insurers.

“Who are you going to penalize, the health care provider who has studied for years to learn his craft and has the right to negotiate with the payers that are being reasonable,” said Beatty. “There are a lot of downsides to having any kind of mandates. It’s not fair to the provider. It’s not fair to the patient.”

Joe Burchfield, vice president of government affairs and communications at the Tennessee Hospital Association, said hospitals and providers have a role in informing the patient, but he thinks insurers should take more responsibility for network education and information.​

“We’re not in a position to know with certainty whether a radiologist or anesthesiologist will be in-network,” Burchfield said.

There is an emerging push to resolve balance billing issues across the country; New York and Connecticut have some protections in place.

"If this passes in Tennessee, it would be a sign of what's to come in a lot of other states," said Georgia State's Fuse Brown. "If it doesn't pass, it will probably be an issue that consumers are getting really activated about. When people find out about it, and that it's happening fairly commonly, they get really mad."

Bailey, who is contesting the out-of-network charge, knows that without the negotiated rates under his insurance plan the visit would have been “catastrophic” to his finances.

“It’s a really shady and unfair way of paying doctors even more money,” Bailey said. “I hope this changes.”

Follow Holly Fletcher on Twitter: @hollyfletcher

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