The Fight to End Surprise/Balance Billing

Surprise! You owe $103,586.

Some surprises are good – like birthday parties, promotions, and engagements. When it comes to medical bills, though, surprises are something most people want to avoid. Unexpected medical bills, often called balance billing, can leave people with thousands of dollars of medical debt. It’s a common problem that’s garnered a lot of attention recently, and it may be affecting the employees in your group health plan. New political action is working toward ending surprise billing.

How Surprise Bills Happen

Imagine you have to go to the hospital for a surgical procedure. You know it’s going to be expensive, but that’s why you have health insurance. You make sure to go to a hospital that’s in your plan’s network. You calculate the deductible and copay and feel confident that you’ll be able to pay for it without risking your financial stability.

The surgery goes without a hitch. A few weeks later, you’re feeling much better – until you get an unexpected bill in the mail. The hospital is demanding more money for the surgery. It’s not a small sum, either. It’s enough to buy a car, or maybe even a house.

At first, you’re sure it must be a mistake. Your insurance should cover these costs. A little research reveals the problem, however. While the hospital was in-network, the anesthesiologist wasn’t. Or maybe it’s another specialist who was out-of-network. Regardless, it’s not covered.

Of course, this is just one example of how it can happen. Many Americans have their own stories. A Texas high school teacher made headlines when he was charged $108,951 after a hospital treated him for a heart attack. According to NPR, the hospital agreed to reduce the bill to $782.29 – but that was after his situation drew significant media attention.

Sometimes, just the possibility of a surprise billing is enough to discourage people from getting the care they need. USA Today reports that Medicare beneficiaries may skip important cancer screenings to avoid surprise bills. The problem stems from the way Medicare classifies procedures. Colonoscopies are covered with no cost-sharing. However, if a polyp is removed during the procedure, the classification changes, resulting in a bill. Beneficiaries who don’t want to risk owing hundreds of dollars may decide against having the screening done.

Surprise billing is not a rare glitch in the system, either. According to a survey from NORC at the University of Chicago, more than half of respondents have received a surprise medical bill.

This trend pokes a hole in the advice many people are receiving about healthcare costs. Individuals are often encouraged to take an active role in keeping their costs down by comparison shopping for medical services. While this should result in savings, surprise bills can throw a wrench in the process. Patients are not always able to ask about the network status of every provider who treats them, especially when undergoing emergency procedures.

As both employers and employees struggle to keep the cost of healthcare down, surprise billing is emerging as a major obstacle.

How Surprise Bills Can Be Stopped

Work is being done to stop – or at least curtail – surprise billing.

Several states have passed laws to prevent surprise billing, and more states are considering legislation to address the issue. According to Pew, at least 25 states have laws that provide either comprehensive or partial protection from surprise billing. However, these laws may not apply to self-insured employer-sponsored health plans.

Texas is among the states working on new protections. Senate Bill 1264 would require health insurers and providers to enter arbitration in order to settle billing issues, rather than sending a surprise bill to the patient. The bill passed in June.

On a national level, Trump has called for an end to surprise bills. In May, he told Congress to pass legislation that would stop balance billing.

According to Kaiser Health News, several bills have already been proposed. The solutions include capping the amount patients pay, requiring advance notice of network status, or prohibiting providers from charging more than network costs for emergency procedures.

Some of these proposed changes could force hospitals and insurers to participate in more arbitration with each other. Right now, when an insurer declines a claim, the hospital often sends the bill directly to the patient, resulting in the surprise bill. New legislation could end this practice.

Trump is also issuing an executive order. According to a fact sheet, the order will address price and quality transparency in healthcare. “The Department of Health and Human Services (HHS) will require hospitals to publicly disclose amounts that reflect what people actually pay for services in an easy-to-read format.

The executive order could have major impacts on the healthcare industry, including providers and insurers. Currently, there can be a large difference between the amount a provider charges an individual patient and the amount an insurer would negotiate to pay. More cost transparency would make these differences clear.

As a part of the Council of Insurance Agents & Brokers, BXS Insurance is fighting for its clients – and fighting to improve the healthcare industry at large. This will require new measures to protect consumers from surprise bills, and we support the new executive bill as a step in the right direction.

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