When you go to the hospital, you do everything right, don’t you?
You’ve enrolled in health insurance and know which services your plan covers. You’ve checked your insurer’s network and verified which facilities are in-network and which are not.
… Or so you assume.
A study published in the New England Journal of Medicine recently found that patients who visit an in-network emergency department can later be shocked to discover the doctor who treated them wasn’t employed by the hospital but contracted to provide care there.
Even if the hospital is in your insurer’s network, the physician might be out-of-network and bill your insurer accordingly — sometimes for thousands of dollars.
The worst part? You don’t find out until the bill arrives.
Doug Moore of Florida told the New York Times that he even phoned his insurance company en route to the emergency room in October 2015 to confirm 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 researchers examined billing data from a major national insurer and discovered this occurred 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 physician outside their insurance network.
Surprise! Here’s a Huge Medical Bill
This phenomenon, which researchers have dubbed “surprise billing,” is — unfortunately — on the rise… technically.
The problem is in the fine print.
I spoke with Pat Palmer, CEO of Medical Billing Advocates of America, to learn what — if anything — consumers can do to prevent being blindsided by these unexpected charges.
Palmer’s group helps consumers dispute inaccurate medical charges and negotiates fair, reasonable prices for services. Although surprise billing has recently gained media attention, she said MBAA has encountered it for years.
The frustration in her voice as she described the situation made me upset on behalf of any hypothetical patient.
Here’s the core issue:
If you’ve ever checked into an ER, you know you’ll sign a pile of forms. Among that paperwork, Palmer explained, “Somewhere in tiny language it says you may get bills from all these (contracted) people. It doesn’t say anything about the cost.”
Then she voiced what we’re all likely thinking: “In an emergency situation,no onehas the ability — mentally or physically — to read and scrutinize every one of those.”
If a physician tried to sue you to collect payment, Palmer doubts that “tiny language” would stand up in court.
But many patients are unaware of this, or don’t want to fight it. Most of us prefer to keep collection agencies away and avoid damaging our credit with unpaid medical debt.
It’s not limited to ER visits. Palmer said patients also receive surprise bills from companies that contract with hospitals to provide lab work, radiology or ambulance services, for example.
Sharon Steinmann, Savinly’s director of photography, experienced that firsthand.
After Steinmann gave birth to her first child in Alabama in 2015, she was astonished to see a bill for about $500 from a company that apparently contracted with the hospital to perform her newborn’s routine hearing test.
“I had just gotten a C-section. That’s major surgery,” Steinmann said. “I had no idea which tests they were doing.”
She spent five months calling both the hospital and the California-based company that performed 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 hospital employee contacted the company on her behalf. The woman called back and told Steinmann she would no longer be responsible for the charge.
“It’s still unclear what the hell happened,” Steinmann admitted.
She didn’t pursue it further. She was just relieved the puzzling bill was dropped.
What to Do If You Receive a Surprise Bill
Palmer said her organization has successfully fought to have bills removed or reduced for patients who are hit with surprise out-of-network charges.
Your strongest argument is that no one clearly explained your financial obligation.
Contact the billing department of the physician or company that billed you and explain the provider failed to inform you they weren’t participating in your insurance network or what their fees would be.
On those grounds, negotiate with the billing department to reduce your bill.
On a patient’s behalf, MBAA will request a physician produce a signed document showing they explained the patient’s financial responsibility and the patient consented to proceed with services.
Of course, that document almost never exists.
(That document probably, actually, never exists, though I won’t claim certainty.)
“The hospital is the one that engaged your services,” Palmer explained, when it admitted you to its ER. No one makes your financial burden clear during that process.
She said her advocates will tell a doctor they don’t believe the documents a patient signed with the hospital would hold up in court, “and that’s usually when they start negotiating.”
If the contracted physician or company won’t cooperate, you can try your insurance company next. Palmer said you can argue you had no idea you received out-of-network services, and many insurers will reprocess the claim as if it were in-network — with a caveat.
When processed as in-network, insurance will cover around 80–90% of the cost, compared with the 60–70% they pay for out-of-network services.
The caveat, she noted, is the total charge might still be higher than the rate the insurer has negotiated with its in-network providers.
If nothing else works, Palmer recommends a tactic that’s a bit like a financial leverage move. You can work with your insurance company to retract any payment it sent to the doctor and instead have that benefit paid to you directly.
“The physician should not receive the advantages of a participating provider when they’re not participating,” she stressed.
If the insurance company sends its portion to you, leaving you responsible for paying the doctor, you gain substantial negotiating leverage.
Tell the doctor about this possible recourse, and they may be likelier to work with you to reach a fair price. “They don’t want that money retracted and to rely on the patient to pay the entire thing,” Palmer explained.
She also stresses the importance of getting any agreement in writing.
You might reach an understanding by phone with a billing department, but you won’t have proof. Ask them to send written confirmation so you both honor the agreement.
A final note: Palmer points out, “We cannot rule out the responsibility of the hospital itself.”
The NEJM researchers echo this view, suggesting lawmakers could require a visit be treated as a bundled package that includes both the hospital and the physician.
No one knows whether the incoming administration will tackle this problem in its promised health care reforms.
Your Turn: Have you ever received a surprise medical bill after visiting an in-network hospital?
If you’re looking for more resources on managing medical costs, check out ways to save money on medical bills and where to find help with medical bills. If you have pets, you might also be interested in tips to avoid vet bills.
Dana Sitar (danasitar) is a staff writer at Savinly. She has written for Huffington Post, Entrepreneur.com, Writer’s Digest and more, weaving humor wherever it fits (and occasionally where it doesn’t).
