Guest blog by
Joseph P. McDonagh, CLU, Independent Insurance Broker
I see many types of bills as a health insurance agent, but I received one from a client last week that highlights a disturbing trend.
Unfortunately, it was the third bill of its type that I’ve seen in 2015.
The bill was from a physician assistant for $6,200. The physician assistant didn’t perform the surgery – obviously, a surgeon did that. The physician assistant wasn’t known to my client; he had no idea who this person was until the bill arrived. To top it off, the $6,200 bill was more than what the surgeon was paid.
The bill was so high because the physician assistant was billing separate from the facility, the surgeon, and the anesthesiologist. This is because the physician assistant was “out of network,” meaning they are not a participating provider with my client’s insurance company. This entitled them to bill my client for the full amount.
I am a veteran in the health insurance field. I work mainly with small employers with fewer than 50 employees. And especially for them, part of what I do includes helping to explain why they’re being billed for something. A major part of my job is calling the insurance company when a claim is denied and negotiating my client’s way through the confusion of 21st century health insurance.
This task keeps getting tougher.
A month ago, another client sent me an “explanation of benefits” (EOB) – the notoriously obtuse and unintelligible statement that an insurance company sends when a claim has been processed by an insurance company. He, too, had been in the hospital for surgery.
The EOB showed a $2,400 bill for the anesthesiologist, of which the insurance company paid nothing because the anesthesiologist, a person my client hadn’t chosen and only met for the first time on the morning of the surgery, was also out of network.
A third client contacted me in January. She had been to see her regular doctor for a routine annual exam, including blood tests. She received a bill from the laboratory that performed the blood tests for over $2,800.
That lab, like the physician assistant, like the anesthesiologist, is out of network. Do you see a trend?
When a bill is presented for out of network services to an insurance company, it is either denied outright if the insurance plan doesn’t cover out of network services, or it is paid at a significant discount. However, unlike an in-network provider, the out of network provider can send a bill to the patient for the part of the bill that the insurance company won’t pay and demand full payment.
If you deliberately chose that out of network provider – maybe it was a highly recommended orthopedic surgeon, a chiropractor who was known to work magic, or a psychiatrist who doesn’t accept insurance – the full cost is rightfully on your shoulders.
But when the facility, the doctor, or the physician assistant wasn’t selected by you and is out of your control, why should you be held responsible for that cost?
You shouldn’t. And if you aren’t, it is a long and arduous process to get the bill settled.
Your insurance company’s denial must be appealed, a process that will typically take about a month. It is your responsibility to file the appeal, not the out of network provider’s (who might, in the meantime, be sending your bill to a collection agency). And when the bill is finally settled, the end result often is that the provider is reimbursed by your insurance company for the full amount billed.
Why? Why should a physician assistant receive more in payment than the surgeon? Why should an anesthesiologist receive four times what would have been paid if he was in network? Why should an out of network laboratory receive ten times what would have been paid to an in-network lab?
They shouldn’t, but they often are. And ultimately, although you won’t be paying that provider directly, we are all paying the costs for these unwarranted out of network expenses in higher premiums.
These three cases aren’t unusual. What is unusual is that I am confronted with these sorts of problems more frequently these days. Just as we are trying to gain control over health care costs with viable new ideas – patient-centered care, capitation payments replacing fee-for-service, etc. – these out of network provider costs threaten to undermine our efforts.
When an insured patient enters the hospital for an emergency, no one is required to ask if the physicians attending are in network. Emergency services are rightly covered as though in-network, even if the providers are not.
But in the case of scheduled surgery, unless the patient has specifically requested the services of an out of network provider, no one in the operating room should be outside the network and certainly no one should be paid other than what is appropriate for the in-network care.
It’s not enough that my clients won’t have to pay these outrageous bills; their insurance company shouldn’t be paying them either.
The state legislature is partially addressing this issue via S.B. 808.