Strategies for Reducing and Preventing Surprise Out-of-Network Medical Bills Presented to: Rhode Island Business Group on Health October 13, 2017 FamiliesUSA.org

Who We Are Consumers Union is the policy and mobilization arm of Consumer Reports Nonprofit, independent, no advertising Working to expand coverage, reduce health care costs, & improve safety & quality FamiliesUSA.org

Surprise Medical Bills Harsh & Unfair for Patients Cost Substantial Time & Money to Address Can Be Severe Economic Hardship Financial Barrier to Care FamiliesUSA.org

Claudia’s Story Claudia Knafo, concert pianist living in New York City Thought she chose an in-network surgeon for neck surgery Doctor’s office photographed insurance card and said everything was fine FamiliesUSA.org

Claudia’s Story Received bill for $101,000 Received insurance company check for $66,891 (70% of UCR); sent check to doctor Insurance company calls and said they would only pay $3,510 (140% of Medicare); “please send money back” Caught in dispute for 7 months FamiliesUSA.org

BALANCE CHARGED TO PATIENT $500 deductible, $2,500 out-of-pocket limit Claudia’s Bill   SURGEON CHARGED INSURANCE COVERED BALANCE CHARGED TO PATIENT IN-NETWORK RATE (expected at time of surgery) [negotiated rate] All or most costs $500 deductible, $2,500 out-of-pocket limit OUT of NETWORK RATE #1 (Usual & Customary Rate @ 70%) 101,000 66,891 $34,433 OUT of NETWORK RATE #2 (Medicare Rate @ 140%) 3,510 $97,489 FamiliesUSA.org

2012 NY Dept of Financial Services Investigation NY State received 2,000 consumer complaints a year about medical billing issues (2011-12) Insurance companies receive 1,400 additional complaints FamiliesUSA.org

2012 NY Dept of Financial Services Investigation Consumers receive surprise bills for many different reasons: Missing protections for inadequate networks Inaccurate provider directories Lack of disclosure of provider status for non-emergency care Excessive bills for emergency room care Reduced, skimpy insurance coverage for some out-of-network services Difficulties in submitting claims FamiliesUSA.org

2014 NY Consumer Protections Enacted Improve Disclosures about Provider Network Status and Insurer Payments Require Provider Directories be Accurate Strengthen Network Adequacy Standards Ban Surprise Balance Bills for Emergency Care If no suitable provider available – consumer gets in-network rate for non-emergency care Create Independent Dispute Resolution process FamiliesUSA.org

Consumers Union National Survey (May 2015) 30% of privately insured Americans received a surprise medical bill, where their health plan paid less than expected, in the past two years Among those with surprise bills, nearly one out of four got a bill from a doctor they did not expect to get a bill from.  53% of patients with surprise medical bills reported that the issue was either not resolved as they liked, or not resolved at all. 75% of this “unhappy” group paid the bill in full (57%) or through an installment plan (18%). 87% of consumers did not know which agency or department in their state government is tasked with handling complaints about health insurance Many (72%) are unsure if they have the right to appeal to the state/an independent medical expert if their health plan refuses coverage for medical services they think they need. FamiliesUSA.org

Consumers Union National Survey (May 2015) 87% of consumers did not know which agency or department in their state government is tasked with handling complaints about health insurance Many (72%) are unsure if they have the right to appeal to the state/an independent medical expert, if their health plan refuses coverage for medical services   53% of patients with surprise medical bills reported that the issue was either not resolved as they liked, or not resolved at all. 75% of this “unhappy” group paid the bill in full (57%) or through an installment plan (18%). 87% of consumers did not know which agency or department in their state government is tasked with handling complaints about health insurance Many (72%) are unsure if they have the right to appeal to the state/an independent medical expert if their health plan refuses coverage for medical services they think they need. FamiliesUSA.org

Texas: Who’s In-Network at Your Hospital? 60% of consumers thought if you went to an in-network hospital, all services there would be in-network Source: “Surprise Medical Bills Take Advantage of Texans,” Center for Public Policy Priorities, 9/2014 FamiliesUSA.org

States Taking Action Surprise Medical Bill Consumer Protection Laws: Illinois (2011) New York (2014) Connecticut (2015) Florida (2016) California (2016) Pending: 20+ other states FamiliesUSA.org

Advocates Guide FamiliesUSA.org

Five Essential Consumer Protections Accurate and Up-To-Date Provider Directories Disclosure of In-Network or Out-of-Network Status A Ban on Out-of-Network Surprise Balance Billing A Well-Defined Process for Determining Payment of Surprise Bills Provide Easy-to-Understand Information About Consumer Rights FamiliesUSA.org

Connecticut (2014) Consumers who get surprise bills at emergency rooms or outpatient facilities have only in-network cost-sharing Providers who treat consumers get paid at greater of 80% of UCR, the in-network rate, or Medicare If in-network provider available, then it’s not a surprise bill No Independent Dispute Resolution Process established FamiliesUSA.org

Florida (2016) Consumers who get care in-network facilities (hospital and ER, urgent care facility, specialty-hospital, ambulatory-surgery center) will pay only the in-network co-pays, co-insurance, or deductible. If providers and insurers have claims dispute, they can take the case to an Independent Dispute Resolution (IDR) process FamiliesUSA.org

California (2016) – AB 72 Consumers who get care at an in-network facility (specifically, a hospital, ambulatory surgery center, lab, imaging center) will pay only the in-network co-pays, co-insurance, or deductible. Providers who treat consumers at in-network facilities get paid at greater of 125% of Medicare rate OR average in-network contracted rate for that service If provider thinks payment is too low, they can take the case to Independent Dispute Resolution (IDR) FamiliesUSA.org

Federal Level Reform Proposals HR 3770 – End Surprise Billing Act – would end balance bills for emergency care , require advance disclosures for non-emergency OON care in hospitals (Rep. Lloyd Doggett, D-TX) 2017 Federal Budget Language – “Reasonable steps” to assure in-network care Pending standalone bill: Allow states to regulate air ambulances Need to strengthen protections for workers in self-insured plans – half of private sector workforce President Obama’s final budget proposal was met with little fanfare, but a lot of political opposition. The President, however, put forth one legislative proposal that deserves attention. It is aimed at helping consumers who get stuck with surprise bills from out-of-network health care providers. Specifically, the proposal would protect patients from having to pay unexpected fees to out-of-network providers for services delivered while they are in an in-network hospital. Although details are sparse, the administration proposes to require hospitals to take “reasonable steps” to match patients with physicians who are in their health plan’s network, and require physicians who “regularly provide” services in hospitals to accept in-network rates. FamiliesUSA.org

Facility Fees – “Provider-Based Billing” Extra charges at outpatient facilities owned by hospitals to pay for overhead, lab and infrastructure costs Occuring more frequently because of hospital-physician consolidation Federal legislation has banned at NEW outpatient facilities, but left old arrangements for other facilities in place Some states are taking action (CT, PA, CA) to investigate and improve notice to consumers FamiliesUSA.org

Contact Information Chuck Bell, Programs Director Consumers Union www.ConsumerReports.org www.ConsumersUnion.org (914) 378-2507 cbell@consumer.org FamiliesUSA.org