You work hard to negotiate rates with in-network healthcare service providers to keep benefits costs in check. But there are a few cracks in the system that may result in costly charges to your members, even when they seek care in-network. These surprise bills primarily originate from three areas:

• Emergency rooms
• Ambulance services
• Specialty providers.

What is a Surprise or Balance Bill?

Balance billing occurs when providers bill a patient for the difference between the amount they charge and the amount that the patient’s insurance pays (healthinsurance.org). The patient is responsible for the balance after already paying any applicable coinsurance, deductibles, and copayments.

You’ve educated your employees about seeking care in-network, so it’s their problem if they go out of-network, right?

While it’s true that your costs may be impacted only slightly since your insurance carrier will pay only the out-of-network negotiated rate, balance billing could raise your premium rates, affecting you and your employees. Balance billing could also cause employees to meet their deductibles more quickly, which means more costs for you.

Indirect costs are a different story. Balance billing often creates severe financial burdens on employees. Employees may take time off work to resolve their issues or make phone calls during work hours when providers and carriers are available. The stress of resolving billing issues invariably impacts productivity.

Could You Afford this Balance Bill?

A patient underwent neck surgery performed by an in-network provider. A non-network surgeon assisted and billed the patient $117,000, nearly 20 times the amount billed by the lead surgeon.

Source: New York Times

Read colleague Brandon Conroy’s blog, 2018 Financial Wellness Update, for more information.

Common Balance Bill Practices Put Us All at Risk

Despite due diligence to seek care from in-network facilities and providers, all members who are covered by self-insured employers are at risk of becoming victims to balance billing. Here are some examples:

Emergency Rooms

In his article, Blame Emergency Rooms for the Out-of-Control Cost of Health Care, Dr. Glenn Melnick explains that, “Most states require health care plans to tell their members to go to the nearest hospital in an emergency and that insurance will cover the visit—even if their plan does not have a contract with that hospital and the emergency care they receive will be out of network.” He asserts that this puts hospitals in a position of strength when it comes to negotiating pricing with health plans.

If the hospital can’t get the plan to agree to pay the high emergency cost demanded, the hospital doesn’t sign a contract and becomes an out-of-network facility. The hospital wins because it gets paid more to treat the plan’s patients because the hospital is out-of-network and will not be reimbursed at negotiated and contracted rates.

Dr. Melnick also points out that hospitals are acquiring physician practices and outpatient services at a rapid pace. These acquisitions give them even more leverage when negotiating contracts with health plans for not only emergency services, but all other services as well. As an employer, you should be alarmed.

“Despite due diligence to seek care from in-network facilities and providers, all members who are covered by self-insured employers are at risk of becoming victims to balance billing,” says Sashi Segu, Innovu Counsel.

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Read colleague Debbie Partsch’s blog,Can Healthcare Giant Mergers Benefit Consumers?, to learn more.

Ambulance Services

When ambulance services feel they can’t negotiate a fair rate with health plans, they, like hospital emergency rooms, become out-of-network providers. That means balance bills for patients, even when they aren’t able to choose the ambulance that transports them. Reasons for using a non-network ambulance provider include:

• The patient is unconscious or otherwise unable to communicate.
• The call is made by a good Samaritan, police, or road crew.
• The ambulance service picks up news about the situation on a scanner and arrives at the scene.
• A facility summons the services of its out-of-network ambulance provider to transfer a patient to another facility.

Costs for ambulance services can be surprising. Many charge by the mile and some charge for every service they administer, such as oxygen. Adding to the financial burden is that many ambulance services will transport only to the closest, appropriate emergency room, which may not be in the patient’s network. Air ambulances services, which are even more expensive, often balance bill.

Examples of Ambulance Balance Bills

• A patient was billed $3,660 for a 4-mile ambulance ride.
• A woman was billed $8,460 for a transfer from one hospital that could not handle her case to another that could.

Source: Taken for a Ride, Kaiser Health News

Non-Participating Providers Servicing In-Network Facilities

You may be surprised to learn that you can receive care or services from an out-of-network provider when you’re at an in-network facility or when you see an in-network physician. How?

• The anesthesiologist the hospital assigned for your surgery is not in your network.
• Your doctor sent a sample to an out-of-network pathologist for biopsy.

This is common with specialty providers, including*:

• Neonatologists (doctors for newborns)
• Intensivists (doctors who specialize in ICU patients)
• Hospitalists (doctors who specialize in hospitalized patients)
• Radiologists (doctors who interpret x-rays and scans)
• Emergency room doctors
• Durable medical equipment suppliers (provide crutches, braces, wheelchairs, etc.).

*Source: Balance Billing—What It Is & How It Works

“You may be surprised to learn that you can receive care or services from an out-of-network provider when you’re at an in-network facility or when you see an in-network physician,” says Sashi Segu, Innovu Counsel.

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Addressing the Practice of Balance Billing

Surprisingly, despite public outcry over balance billing (InsideARM):

• 30 states have no balance billing protection.
• 15 states have limited protection.
• 6 states have comprehensive legislation.

The map below shows the level of protection by state.

What Can You Do

There are a few things employers can do to lessen the impact of balance billing:

• Support the creation and implementation of regulations or laws addressing balance billing in your state or at the Federal level.
• Inform employees and their families about the possibility of balance billing and suggest the following inquiries:
• Ask their physicians if the labs they use are in-network.
• If receiving non-emergent care, tell them to ask the hospital ahead of time about the availability of in-network anesthesiologists and other specialists who may be involved in their care.
• Use data analytics to identify how often balance billing is occurring in your population and coordinate with your health plan to find remedies.
• Identify site of care cost variations for common procedures and educate employees about less costly, alternative site of care options.

Balance billing is an issue for employers, and an even bigger problem for employees. It’s important to understand it’s impact on your population.