qotd: When your emergency physician is out of your network

The New York Times
September 28, 2014
Costs Can Go Up Fast When E.R. Is in Network but the Doctors Are Not
By Elisabeth Rosenthal

Patients have no choice about which physician they see when they go to
an emergency room, even if they have the presence of mind to visit a
hospital that is in their insurance network. In the piles of forms that
patients sign in those chaotic first moments is often an acknowledgment
that they understand some providers may be out of network.

But even the most basic visits with emergency room physicians and other
doctors called in to consult are increasingly leaving patients with
hefty bills: More and more, doctors who work in emergency rooms are
private contractors who are out of network or do not accept any
insurance plans.

When legislators in Texas demanded some data from insurers last year,
they learned that up to half of the hospitals that participated with
UnitedHealthcare, Humana and Blue Cross-Blue Shield — Texas's three
biggest insurers — had no in-network emergency room doctors.
Out-of-network payments to emergency room physicians accounted for 40 to
70 percent of the money spent on emergency care at in-network hospitals,
researchers with the Center for Public Policy Priorities in Austin found.

"It's very common and there's little consumers can do to prevent it and
protect themselves — it's a roll of the dice," said Stacey Pogue, a
senior policy analyst with the nonpartisan center and an author of the
study.

When emergency medicine emerged as a specialty in the 1980s, almost all
E.R. doctors were hospital employees who typically did not bill
separately for their services. Today, 65 percent of hospitals contract
out that function. And some emergency medicine staffing groups — many
serve a large number of hospitals, either nationally or locally — opt
out of all insurance plans.

Regulations created by the Affordable Care Act specify that insurers
must use the best-paying among three methods for reimbursing
out-of-network physicians dispensing emergency care: pay the Medicare
rate; pay the median in-network amount for the service; or apply the
usual formula they use to determine out-of-network reimbursement, which
often depends on "usual and customary rates" in the area.

But in most states, doctors can then bill patients for the difference
between their charge and what the insurer paid.

http://www.nytimes.com/2014/09/29/us/costs-can-go-up-fast-when-er-is-in-network-but-the-doctors-are-not.html

Center for Public Policy Priorities study of out-of-network emergency
room doctors:
http://forabettertexas.org/images/HC_2014_09_PP_BalanceBilling.pdf

KFF on state balance billing restrictions:
http://kff.org/private-insurance/state-indicator/state-restriction-against-providers-balance-billing-managed-care-enrollees/

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Comment by Don McCanne

A consequence of allowing health insurers to contract selectively with
health care professionals (physicians) and institutions (hospitals) is
that patients not only are financially penalized should they elect to
obtain their care outside of the contracted networks, they may
unavoidably face such penalties when they have sought care only within
networks.

One of the more egregious examples is when they obtain emergency
services at a contracted emergency room only to find out after the fact
that the physicians staffing the emergency room are not in the network.
The patient then is billed not only for deductibles and copayments
applied to allowed charges, but also for the balance of the charges in
excess of the allowed charges - a process known as balance billing.

"The Affordable Care Act provides some protections for enrollees in need
of emergency services, but does not prohibit balance billing by
out-of-network providers" (KFF). For further information on state
restrictions on balance billing, use the KFF link above.

When something is not right, as it clearly isn't here, it is important
to define the problem before crafting a solution. State regulators and
legislators are defining this as a problem of balance billing "abuse"
and are looking at mechanisms to prohibit balance billing. But is that
really the problem?

Insurers, with the complicity of state and federal legislators, have
established limited networks of providers to leverage more favorable
payment rates for health care services. But these rates neglect the
health care delivery system outside of the networks. Now states are
considering making out-of-network physicians comply with contracts to
which they never agreed. That is as unreasonable as making insurers pay
out-of-network fees in full simply because the insurers did not have a
contract with the physicians. Do you have a contract or not? You can't
have it both ways.

The problem here needs to be redefined. Balance billing is not the
primary defect. It is the nature of our complex, dysfunctional financing
infrastructure that leads to a multitude of perverse consequences such
as balance billing - an infrastructure that was perpetuated and expanded
by the Affordable Care Act. We need to rebuild the infrastructure. We
need a single payer national health program. Balance billing would not
exist under such a system.