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Million-Dollar Lawsuit Results from Insurer Sending Payment to Patients-Not Doctors

  • May 29, 2019
  • Published in Billing

In a report released by CNN, a woman received nearly $375,000 from her insurance company over several months for treatment she received at a California rehabilitation facility. A man received more than $130,000 after he sent his fiancée’s daughter for substance abuse treatment.

Those allegations are part of a lawsuit winding its way through federal court that accuses Anthem and its Blue Cross entities of paying patients directly in an effort to put pressure on health care providers to join their network and to accept lower payments, the article revealed.

The insurance giant is accused of sending more than $1.3 million in payments to patients -- money, the suit claims, that is owed to the facilities that treated people with addiction and mental health problems.

The suit by Sovereign Health highlights part of an ongoing war between insurance companies and providers over payment and billing issues, one that puts the patient right in the middle of the fighting by sending payments straight to patients after they seek out-of-network care.

Patients are supposed to send the money on to providers. Many times, they do; other times, they don’t, according to CNN.

More information:

HHS Payment Model Designed to Meet Beneficiaries’ Emergency Needs

Supporting ambulance triage options aims to allow beneficiaries to receive care at the right time and place.  Earlier this year, the U.S. Department of Health and Human Services (HHS), Center for Medicare and Medicaid Innovation (Innovation Center), which tests innovative payment and service delivery models to lower costs and improve the quality of care, announced a new payment model for emergency ambulance services.   It aims to allow Medicare Fee-For-Service (FFS) beneficiaries to receive the most appropriate level of care at the right time and place with the potential for lower out-of-pocket costs, a press statement released by HHS said.

The new model known as the Emergency Triage Treat and Transport (ET3), will make it possible for participating ambulance suppliers and providers to partner with qualified health care practitioners to deliver treatment in place (either on-the-scene or through telehealth) and with alternative destination sites (such as primary care doctors’ offices or urgent-care clinics) to provide care for Medicare beneficiaries following a medical emergency for which they have accessed 911 services. 

In doing so, the model seeks to engage health care providers across the care continuum to more appropriately and effectively meet beneficiaries’ needs. Additionally, the model will encourage development of medical triage lines for low-acuity 911 calls in regions where participating ambulance suppliers and providers operate. The ET3 model will have a five-year performance period, with an anticipated start date in early 2020.

The ET3 model encourages high-quality provision of care by enabling participating ambulance suppliers and providers to earn up to a 5 percent payment adjustment in later years of the model based on their achievement of key quality measures. The quality measurement strategy will aim to avoid adding more burden to participants, including minimizing any new reporting requirements.

Qualified health care practitioners or alternative destination sites that partner with participating ambulance suppliers and providers would receive payment as usual under Medicare for any services rendered. The model will use a phased approach through multiple application rounds to maximize participation in regions across the country.

To ensure access to model interventions across all individuals in a region, CMS will encourage ET3 model participants to partner with other payers, including state Medicaid agencies.  CMS anticipates releasing a Request for Applications this summer to solicit Medicare-enrolled ambulance suppliers and providers. In Fall 2019, to implement the triage lines for low-acuity 911 calls, CMS anticipates issuing a Notice of Funding.

There is an opportunity for a limited number of two-year cooperative agreements, available to local governments, their designees, or other entities that operate or have authority over one or more 911 dispatches in geographic locations where ambulance suppliers and providers have been selected to participate. For more information, please visit: and

How Insurance Coverage Impacts Consumers’ Ability to Pay

How Insurance Coverage Impacts Consumers’ Ability to Pay

New data on health insurance in the U.S. from The Commonwealth Fund reflects quality of coverage and the impact of coverage levels on consumers’ ability to pay medical bills and access care.  

Among the findings in the Biennial Health Insurance Survey, The Commonwealth Fund reports that consumers who are “underinsured,” meaning they carry high health plan deductibles and out-of-pocket medical expenses compared to their income, are more likely to have challenges paying their medical bills or avoid medical care because of the expense.

Twenty-nine percent of insured adults qualified as “underinsured” in 2018, an increase from 23 percent in 2014.  “U.S. working-age adults are significantly more likely to have health insurance since the ACA [Affordable Care Act] became law in 2010. But the improvement in uninsured rates has stalled. 

In addition, more people have health plans that fail to adequately protect them from health care costs, with the fastest deterioration in cost protection occurring in employer coverage,” said Sara Collins, lead author of the study and The Commonwealth Fund vice president for health care coverage and access, in a news release.

The survey offers a big-picture look at consumers’ health insurance, including the quality of their coverage, in 2018.

Key findings in the survey include:

Twenty-eight percent of U.S. adults who have health insurance through their employer were underinsured in 2018, an increase from 20 percent in 2014.

Consumers who purchased plans on their own through the individual market or the marketplaces were the most likely to be underinsured, with 42 percent reporting a lack of adequate coverage in 2018.

Forty-one percent of underinsured adults reported they held off on care they needed because of the expense, compared to 23 percent of consumers with “adequate insurance coverage.”

And, 47 percent of underinsured adults said they had medical bill and debt problems, compared to 25 percent of consumers who are not underinsured reporting these challenges.

More information:

Senator Chuck Grassley to IRS: How Many Hospitals Comply with 501(r) Requirements?

Senator Chuck Grassley to IRS: How Many Hospitals Comply with 501r Requirements?

In an ongoing effort to evaluate nonprofit hospitals required to follow Section 501 (r) of the Internal Revenue Code focused on charity care, U.S. Sen. Chuck Grassley, R-Iowa, has requested data on the number of hospitals that are in compliance with the requirements from the Internal Revenue Service in the last year.

Hospitals subject to 501 (r) must complete a community health needs assessment, meet financial assistance policy requirements, adhere to limitations on charges and follow billing and collection practices.

The IRS’ 501 (r) requirements for nonprofit hospitals, in effect on Dec. 29, 2015, marked a complex change for the health care collections industry, health care providers, patients and more.  Grassley has been a watchdog for the program for several years, prompting a recent letter to IRS Commissioner Charles Rettig with the request for information on nonprofit hospitals’ compliance.

Specifically, Grassley is seeking information about whether tax-exempt hospitals are meeting the statutory requirements laid out in section 501 (r) of the Internal Revenue Code, according to a news release.  “Making sure that tax-exempt hospitals abide by their community benefit standards is a very important issue for me,” he said.

In February 2018, Grassley and former Senate Finance Committee Chairman Orrin Hatch, R-Utah, pressed the IRS for information on enforcement practices and compliance data on nonprofit hospitals.  Grassley has continually urged greater compliance among nonprofit hospitals.  On an annual basis, according to Grassley’s letter, the IRS reviews about one-third of the approximately 3,000 tax exempt hospitals for compliance.

The letter requests an update on those reviews, including those that were resolved upon contact with the hospital, required a compliance check or follow-up investigation as well as how many hospitals were not in compliance with these specific requirements:

Community Health Needs Assessment

Financial Assistance Policy Requirements

Requirements on Charges Billed to Patients

Billing and Correction Policies

Read more on Senator Grassley’s request here:  What is your experience as a hospital required to comply with 501 (r) or as a collection agency working on revenue cycle management with these hospitals? Share your thoughts with ACA International’s Communications Team at, Attn: Katy Zillmer.

Harry Strausser, ACA International’s Education and Membership Development Director, and Irene Hoheusle, vice president of collections and education at Account Recovery Specialists Inc., recently discussed health care collections trends, including 501 (r), in an episode of ACA Cast.

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