‘Balance billing’ proves an unwelcome surprise for insured patients

By Peggy O’Hare

March 17, 2014

SAN ANTONIO — When Tamara Apgar went into a hospital last year for knee replacements, she hung a sign on the door to her room instructing doctors not in her insurance company’s provider network to follow certain conditions.

Apgar, a medical claims negotiator in San Antonio, stipulated that unless a life-threatening emergency existed, physicians not in network with Blue Cross Blue Shield should stay out of her hospital room and find an in-network provider to help her instead. Or, she noted, they could enter if they signed a document at her bedside agreeing to accept in-network payment rates.

Apgar was trying to protect herself against a practice known as “balance billing,” when an out-of-network doctor, after receiving a payment from an insurance company, bills a patient for the unpaid balance for medical services provided.

In the complex world of health care billing, patients who go to a hospital considered “in network” on their insurance plan might later learn that some individual doctors who treated them there were out-of-network providers. These physicians could include doctors that the patient did not ask to see or that they might even have trouble remembering.

Consumers are often taken by surprise when they learn some doctors, lab tests or X-rays at “in-network” hospitals may not necessarily be covered in full by their insurance companies.

“Most people learn about this the hard way,” said Stacey Pogue, a health insurance expert and senior policy analyst at the Center for Public Policy Priorities in Austin. “People have this assumption that a doctor who treats them at a hospital works for the hospital, takes the same insurance as the hospital, and those things aren’t necessarily accurate.

“If you do the right thing and you go in an emergency to an in-network hospital … I think it’s a pretty reasonable expectation that all the services you get under that roof are going to be in network, too. But it’s not a fact.”

One recent report by an insurance industry trade group found that emergency treatment might cost patients as much as 100 times more because hospital-based doctors might be out of their insurance network.

“The reality is when you have an out-of-network provider, contractually, you don’t have any protection,” Apgar said. “They can bill you whatever they want to. Now, you can file it with your insurance and they’ll pay the out-of-network rate. But your explanation of benefits will tell you that you may be responsible for the difference.”

Doctors and insurers point the finger at each other for the uncertainty.

“It does put a hospital in a difficult situation,” agreed Charles Bailey, senior vice president and general counsel for the Texas Hospital Association. “We encourage providers to be in the same health insurance networks. Unfortunately, we don’t have a good way to solve it.”

Balance billing has occurred regularly enough for elected officials and insurance regulators to be aware of it. The topic has been discussed in several recent legislative sessions. But the Texas Legislature has not yet prohibited or outlawed the practice, Pogue said.

But Texas legislators have enacted some consumer protections. For instance, in 2009, Texas passed a law allowing patients with certain types of insurance plans to take their insurance company and an out-of-network medical provider to mediation if they were billed more than $1,000 by the physician for treatment provided at an in-network hospital without certain disclosures being made and if the doctor is based at that hospital.

And the Texas Department of Insurance enacted new rules last summer stipulating that preferred provider plans must identify in provider directories which contracted hospitals don’t have any in-network physicians for a particular type of service, Pogue said. Insurance companies also must count the balance bills paid by consumers toward their in-network deductibles and out-of-pocket maximums if a consumer was forced to go out of network for an emergency, she said.

Other state rules that recently took effect require preferred provider plans to have adequate networks with enough doctors and hospitals capable of providing full plan benefits within a certain distance. And preferred provider plans must alert consumers when out-of-network referrals occur and inform them how likely it is that balance billing will occur at in-network facilities.

Doctors and the insurance industry blame each other for the network disconnect. Doctors say they can’t afford to join networks at discounted rates that don’t cover their costs. They determine how many patients per day they must see based on payment rates.

“It’s a matter of trying to keep the doors open,” said Dr. Elizabeth Torres, president of the Harris County Medical Society in Houston. “Unfortunately, this is a business.”

Insurers counter that some doctors refuse to participate in networks so they can charge whatever they want. Earlier this month, the America’s Health Insurance Plans trade group released a report showing some doctors who choose not to participate in networks charged at least 10 times — and sometimes even as high as 100 times — the Medicare reimbursement rate in their geographic areas.

“Consumers are left holding the bag here,” Pogue said Monday. “They’re stuck in the middle of this kind of war between doctors and hospitals and insurance companies. And they pay for it in terms of these unexpected bills, which can be very expensive.”

‘Call around’

Providers, insurers and experts urge consumers to research their health plans and identify doctors’ offices, urgent care clinics and hospitals in their networks where they can go to avoid out-of-network charges before emergencies occur.

“Most people don’t think, ‘If I get in an accident, which hospital can I go to?’” said Mario Castillo, an insurance law expert at Houston’s Monty & Ramirez firm. “The more robust your network, the better insurance you have. But you’re basically going to have to call around.”

Apgar, who helps clients negotiate medical bills they can’t pay, said consumers should be sure they understand their explanation of benefits. Consumers also should be certain they understand the medical billing statements they receive and verify what they really owe before paying, she said. She urges consumers to avoid paying medical bills with credit cards and suggests they work out payment plans with the medical provider if possible.

Patients undergoing a planned medical procedure can do legwork ahead of time by making sure every medical professional who will be part of that procedure is in network.

“The more educated you are and the more questions you ask, the less likely you’ll be hit with big bills,” Apgar said.