About those surprises

The careful consumer schedules surgery with a surgeon who takes her health coverage at an in-network hospital. Uh oh.

And then the bills come in. Surgeon copay, check. Hospital copay, check. Several big bills follow for physicians and providers she never met or met much – the anesthesiologist, pathologist and radiologist. They’re not in-network. They add up to thousands of dollars. Under her high-deductible plan, she owes an arm and a leg she didn’t expect.

A 2015 Consumer Reports survey found nearly a third of persons with private insurance had been hit by surprise medical bills this way.[1] A third! No one likes when this happens at the auto lot. Consumers, hospitals, health plans and other physicians doubly dislike it in their health care.

States have been tackling surprise billing for years. Florida Gov. Rick Scott signed legislation in 2016[2] protecting patients from charges they later learned were out-of-network. Where the providers and patients remained in dispute, the state ordered a resolution process.[3] Tallahassee’s approach was supported by the Florida Medical Association, Florida Association of Health Plans, and the Florida Hospital Association (at least its “general direction”). Anesthesiologists[4] and radiologists opposed it. Typically they are not hospital employees,[5] bill patients directly, are not required to participate in health plans and don’t feel compelled to. Two years in, the state Office of the Insurance Consumer Advocate continues riding herd on the issue.[6]

Surprise billing is now a big deal with a Medicare agency driving greater transparency in billing and pricing to help control out-of-control health care costs. In its new proposed rule for inpatient hospital payment,[7] Medicare cracks the issue open like this:

CMS is concerned that challenges continue to exist for patients due to insufficient price transparency, including patients being surprised by out-of-network bills for physicians, such as anesthesiologists and radiologists, who provide services at in-network hospitals, and patients being surprised by facility fees and physician fees for emergency room visits. We are seeking information from the public regarding barriers preventing providers from informing patients of their out of pocket costs; what changes are needed to support greater transparency around patient obligations for their out of pocket costs; what can be done to better inform patients of these obligations; and what role providers should play in this initiative. CMS is also considering making information regarding hospital non-compliance with the requirements public and also intends to consider additional enforcement mechanisms in future rulemaking.[8]

This isn’t the end of it. Representing the nation’s for-profit hospitals, Chip Kahn said, “The newly released IPPS rule goes a long way to putting patients first. We appreciate CMS’ efforts to empower patients with information about their medical records and costs of care.”[9] Another notable feature about the rule is a major initiative for making health records and billing information more accessible online for consumers.

My view is that health care’s surprise days are coming to an end. Savvy consumers won’t stand for it any longer. People who feel as though they’ve been taken will find themselves with friends in high places. Providers whose business models depend on price-hiding are on notice: the clock is ticking. They may find themselves asking who their customers really ought to be. And in the worlds where policy is made, the construction of forums for health billing dispute resolution will make the difference.

On this opportunity, the public comment deadline is June 25, 2018, for final rules ordinarily published Nov. 1 and effective the following Jan. 1.



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[1] Imholtz E et al. Consumer Reports survey finds nearly one third of privately insured Americans hit with surprise medical bills. Consumers Union, May 2015. http://consumersunion.org/news/consumer-reports-survey-finds-nearly-one-third-of-privately-insured-americans-hit-with-surprise-medical-bills/, retrieved 4/25/2018.

[2] Florida HB 221 (2016), https://www.flsenate.gov/Session/Bill/2016/221/BillText/er/PDF, retrieved 4/25/2018.

[3] Meyer H. Florida governor signs law shielding patients from surprise medical bills. Modern Healthcare, April 14, 2016. http://www.modernhealthcare.com/article/20160414/NEWS/160419946, retrieved 4/25/2018.

[4] Mira T. Growing limits on “surprise bills” by anesthesiologists and others. The Anesthesia Insider with Tony Mira, June 1, 2016. http://www.anesthesiallc.com/publications/blog/entry/growing-limits-on-surprise-bills-from-anesthesiologists-and-others-1, retrieved 4/25/2018.

[5] U.S. Department of Labor, Bureau of Labor Statistics. Occupational employment statistics, occupational employment and wages, May 2017. 29-1061 Anesthesiologists https://www.bls.gov/oes/current/oes291061.htm, retrieved 4/26/2018. 11% of anesthesiologists are hospital employees, according to BLS.

[6] Office of the Florida Insurance Consumer Advocate. Balance billing. https://www.myfloridacfo.com/division/ICA/BalanceBilling.htm, retrieved 4/25/2018.

[7] Centers for Medicare & Medicaid Services.  Medicare Programs: Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and Long Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2019 Rates; etc. U.S. Department of Health & Human Services, April 23, 2018. https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-08705.pdf in preview through 5/7/2018,  https://www.federalregister.gov/documents/2018/05/07/2018-08705/medicare-programs-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-long in the Federal Register.   Fact sheet, https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2018-Fact-sheets-items/2018-04-24.html, retrieved 4/25/2018.

[8] CMS op cit, from the fact sheet. The language from the proposed rule is similar and more extensive, beginning at p. 1464 of the public inspection version of the proposed rule.

[9] Kahn C. Tweet on behalf of the Federation of American Hospitals, April 26, 2018. https://twitter.com/FedAmerHospital/status/989568790320046081, retrieved 4/26/2018.

Frank PurcellComment