1. Strategies for Reducing and Preventing
Surprise Out-of-Network Medical Bills
Presented to: Rhode Island Business Group on Health
October 13, 2017
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2. 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
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3. Surprise Medical Bills
Harsh & Unfair for Patients
Cost Substantial Time & Money to Address
Can Be Severe Economic Hardship
Financial Barrier to Care
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4. 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
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5. 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
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6. 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 70%)
101,000
66,891
$34,433
OUT of NETWORK RATE #2
(Medicare Rate @ 140%)
3,510
$97,489
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7. 2012 NY Dept of Financial Services Investigation
NY State received 2,000 consumer complaints a year about medical billing issues ( )
Insurance companies receive 1,400 additional complaints
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8. 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
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9. 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
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10. 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.
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11. 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.
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12. 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
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13. States Taking Action
Surprise Medical Bill Consumer Protection Laws: Illinois (2011)
New York (2014)
Connecticut (2015)
Florida (2016)
California (2016)
Pending: other states
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14. Advocates Guide
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15. 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
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16. 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
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17. 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
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18. 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)
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19. 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.
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20. 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
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21. Contact Information
Chuck Bell, Programs Director
Consumers Union
(914)
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