Consumers in some states are receiving “balance bills” for healthcare if they are treated by an out-of-network provider not covered by their health insurance plan, according to an issue brief from The Commonwealth Fund. “Privately insured consumers expect that if they pay premiums and use in-network providers, their insurer will cover the cost of medically necessary care beyond their cost-sharing,” The Commonwealth Fund reports in the brief, Balance Billing by Health Care Providers: Assessing Consumer Protections Across States. “However, when obtaining care at emergency departments and in-network hospitals, patients treated by an out-of-network provider may receive an unexpected ‘balance bill’ for an amount beyond what the insurer paid. With no explicit federal protections against balance billing, some states have stepped in to protect consumers from this costly and confusing practice.”
The Commonwealth Fund researched the issue to better understand the state laws to protect consumers from balance billing by an out-of-network provider and found that most states do not have laws in place. “Of the 21 states offering protections, only six have a comprehensive approach to safeguarding consumers in both settings, and gaps remain even in these states,” The Commonwealth Fund reports. “Because a federal policy solution might prove difficult, states may be better positioned in the short term to protect consumers.”
Private health insurance purchased by consumers is a mechanism to offset the high cost of healthcare. “They expect that if they pay their premiums and use in-network providers, their insurer will cover the cost of medically necessary care beyond their specified copayments, coinsurance, and deductibles,” according to The Commonwealth Fund. However, if consumers are treated by an out-of-network provider, such as during an emergency room visit, they may face extra costs.
Out-of-network providers do not have contracts with health plans and therefore no negotiated payment rates, according to The Commonwealth Fund. In some cases, consumers will receive “balance bills” totaling thousands of dollars when an out-of-network provider issues a charge that is the difference between health insurance coverage and doctor’s fees. And, oftentimes when a consumer is cared for out-of-network, they did not have a choice about the provider.
Research published in Health Affairs Web First, “One in Five Inpatient Emergency Department Cases May Lead to Surprise Bills,” cited by The Commonwealth Fund shows 14 percent of emergency department visits and 9 percent of hospital stays were likely to result in an unexpected bill. Twenty percent of patients admitted to the hospital from the emergency department were likely to receive an unexpected bill, according to the research. Additional findings in the issue brief include:
Twenty-one states have “direct protections” in their statutes or regulations for consumers who would be subject to balance bills as a result of out-of-network care, however they do not prevent balance billing for consumers in all situations;
Six states—California, Connecticut, Florida, Illinois, Maryland and New York—have a comprehensive approach to protecting consumers, including “holding them harmless from extra provider charges and prohibiting providers from balance billing;”
In 12 states, “balance-billing protections only require insurers to hold consumers harmless from the billed charges of providers but do not prohibit providers from sending bills. Because these states do not prohibit providers from balance billing, consumers may still receive a bill from a physician, hospital, or other provider.” In those states, Colorado for example, regulators have reported consumers receive balance bills and may not understand their rights not to pay.
Additionally, in 29 states and the District of Columbia, there are no laws or regulations “that explicitly protect consumers from unexpected balance billing by out-of-network providers in [emergency departments] or in-network hospitals. The Commonwealth Fund concludes in the issue brief that balance billing can create financial troubles as much as impact consumers’ views on the healthcare system.
“Consumers expect that their health insurance will cover the cost of most medically necessary care beyond their cost-sharing amounts. But when emergencies or other unexpected circumstances expose them to out-of-network providers, balance billing can create financial burdens and undermine their confidence that health insurance will protect them from financial hardship,” it reports.
“Concerns about balance billing are not new but may be growing as the use of narrow provider networks becomes increasingly common. The fact that consumers are more likely to experience balance billing in situations where they have no control over which providers treat them suggests that additional state and federal policy solutions are needed to protect consumers fully and limit financial risk.”
Read more in the issue brief here: http://ow.ly/esqL30cQIqA