Surprise Balance-Billing

HealthcareIn the opaque world of health care billing and pricing, surprise balance-billing is an increasing problem. In the near future, Senator Schwank and I will introduce legislation to end the practice.

Typically, surprise balance-billing occurs here when an in-network provider’s health care services include services by another provider outside of the patient’s insurance network. The patient usually is unaware that the service is not covered until receiving a separate bill later, in an amount that can easily range into the tens of thousands of dollars or more. To make matters worse, the cost might not be communicated to the patient for months and endanger his or her ability to appeal the charge.

With some 45 million Americans behind on medical bills, and half of all bankruptcies caused by them, patients should not risk being saddled with bills for services they reasonably understood would be covered by their health insurance. More than a dozen states now protect HMO health care consumers and nine protect PPO consumers from out-of-network bills. Many are similar to Pennsylvania in limiting this protection to emergency room visits, but increasingly states are taking a more appropriate position that restricts surprise balance-billing generally. New York adopted a best practice statute this year that is the model for our legislation. Our proposal will :

    1. Protect patients from obligations for out-of-network emergency services or surprise bills beyond the patient’s in-network co-payments, co-insurances or deductibles . A bill will be a “surprise”, for example, if a hospital or ambulatory surgical center patient receives services from a provider who, without their knowledge, is out-of-network. If consumers are referred to out-of-network providers without a written consent that indicates they understand the services will be out-of-network and might result in higher out-of-pocket costs, it also will be considered a surprise bill.
    2. Require anyone providing a health care service, including hospitals, physicians and other professionals, group practices, diagnostic and treatment centers, and health centers to disclose their network status, out-of-network rates and relationships with other health care providers; and also to provide advice on how to find such information online and in pre-admission materials.
    3. Require insurers to maintain and provide accurate current directories of network physicians and hospitals and information about out-of-network rates.
    4. Ensure that patients are removed from any payment dispute between the insurer and provider if they complete an “Assignment of benefits” that allows a provider to directly pursue payment from the patient’s health plan.

Sen. Jay Costa, Senate Democratic Leader
Testimony Regarding “Surprise” Balance Billing
October 1, 2015

Commissioner Miller, my name is Jay Costa.  I am a state Senator representing the 43rd District which is located in Allegheny County.  My district includes wards in    the City of Pittsburgh, East Hills communities, a number of municipalities in the    South Hills and the Monongahela Valley. I have been a member of the State Senate since 1996.  I currently serve as the Senate Democratic Leader.

Thank you for providing me an opportunity to express my significant concerns regarding “surprise” balance billing, its impact on health care consumers, and a few potential solutions.

As you know, I have been very active in trying to find a resolution to the ongoing disagreements between UPMC and Highmark, which are causing turmoil in the Western Pennsylvania health care market. A side effect of the breakup in the contractual relationship between the two is that “surprise” balance billing is becoming more prevalent. It is one side effect that we must find a solution to in  the immediate future to protect consumers and their pocketbooks.

In the often opaque world of health care billing and pricing, the increasing use of balance billing cannot be taken lightly. 45 million Americans are behind on paying medical bills, and 50 perent of bankruptcies are a result of such debt. After going through a medical procedure the last thing a patient needs is to find a startling bill in the mailbox for services they thought were covered by their healthcare insurance.

The story is rather simple. A patient arrives for a procedure at a health care facility with a doctor that is covered by their insurance product as in-network. The patient expects to pay a deductible and/or co-pay, but these are predictable costs that the patient knows must be covered.

However, it later turns out that someone providing a particular service related to the procedure is out-of-network, requiring a wide range of costs that the patient was not expecting to pay.  This can quickly add up to tens of thousands of dollars, and perhaps more. To make matters worse, the costs may not be known or communicated to the patient until months later, disabling them from being able   to properly pursue an appeal of the charges.

Consumers confronting the health care system often find it confusing on its face. Choosing health insurance, finding a primary care physician to match that health insurance, and then, in the midst of illness, trying to find the right in-network specialists to provide a cure are all difficult tasks. Being confronted by surprise, out-of-network charges that can cost a patient thousands is not an acceptable outcome.

Pennsylvania currently only protects patients in emergency situations from surprise balance billing. We must expand this protection further to protect patients that are being treated at in-network facilities or are referred to out-of-network services without proper disclosure.

Currently there are protections in 13 states for consumers with HMO health care plans and nine states for those with PPO plans. While many of these are similar to Pennsylvania in that they only cover emergency services, other states have taken a more aggressive, and I would say appropriate position, that surprise balance billing should also be restricted.

New York has adopted a best practice statute within the last year that should become a model for Pennsylvania. Under the New York law, patients are generally protected from owing more than their in-network copayment, co-insurance or deductible on bills they receive for out-of-network emergency services or on surprise bills.

A bill is considered a surprise if, for example, patients at a hospital or ambulatory surgical center that’s in their network receive services from a doctor who, without their knowledge, is out-of-network. In addition, if consumers are referred to out-of-network providers but don’t sign a written consent form saying they understand the services will be out-of-network and may result in higher out-of-pocket costs, it’s considered a surprise bill.

Lastly, the patient isn’t made to fight between the insurer and the health care provider. To get relief from a surprise bill a consumer needs to complete an “assignment of benefits” form that allows the provider to pursue payment from    the health plan. The patient then sends the form and the bill to her insurer and to the provider. As long as the patient has taken that step, he won’t be responsible for any charges beyond her regular in-network cost sharing.

Some states have adopted hotlines that allow for educated patients to proactively determine whether they will be, or have been, subject to surprise billing. This is a piece of the protection that should be provided to consumers, but does not go far enough.

Additionally, disclosure of the contractual relationships between an insurer and    all of the health care providers involved in a procedure should be required so that patients are informed in writing about the potential for out-of-network charges.

Health care is confusing at the best of times. It can be physically, emotionally, and financially overwhelming at the worst of times. Surprise billing, merely one element amongst all the confusion, should not be something that we tolerate as   the health care marketplace continues to evolve. We are seeing first hand in Western Pennsylvania how the changing relationships between health care providers   and insurers can damage patients. We must adopt a strong legal structure to  protect consumers.

Thank you for accepting my testimony. I look forward to working closely with you in the coming months to address this pressing issue.