Many have heard of surprise medical bills appearing in other people’s mailboxes but may have never considered that these bills could appear on their own doorsteps as well. After all, most people believe that they are properly insured and that their medical insurance companies will cover nearly all of their bills should anything unexpected happen. They may also mistakenly believe that health insurance will cover nearly 100 percent of planned procedures and preventative services. Failure to read the fine print on insurance policy agreements can lead to many surprises in billing, but this is not typically the main reason for huge, unexpected medical bills.
Instead, one in seven patients finds himself hit with a surprise medical bill despite searching for health care at an in-network provider. Plus, over half of Americans have found themselves sifting through bills that have been completely rejected by their health insurance companies. Anesthesiology costs and laboratory charges have been found to be the highest offenders, but surprise charges can pop up after nearly any procedure or visit. By learning more about the most common causes of surprise bills and what policymakers are doing to avoid these unexpected charges, consumers can be prepared the next time they go to a clinic or hospital and can vote for policymakers who are opting for positive changes in the health care industry.
Surprise Bills Following Emergency Services
When a patient arrives at the hospital unexpectedly, there is simply no time to contact an insurance provider to check for in-network providers. Oftentimes, people end up in emergency departments that are not even in their hometowns or home states, leading to a plethora of out-of-network charges.
In a 2012 survey, researchers discovered that the majority of surprise bills were due to emergency services. Some of the stories about this have been truly astounding. For example, one individual broke her leg while skiing in Vermont and ended up with over $18,000 of charges for emergency services.
However, the state in which one seeks emergency care may determine the amount of surprise bills from unexpected out-of-network charges. For example, Texas, New York, New Mexico and California are notorious for these types of charges while Minnesota, South Dakota and Nebraska have the lowest likelihood of sending their emergency patients unexpected bills.
Surprise Bills from Out-of-Network Providers
Out-of-network charges do not only come into play with emergency care, however. Sadly, even patients who believe that they have chosen an in-network provider or who are seeking care at an in-network facility may find themselves saddled with thousands of dollars of unexpected costs months later. For example, your in-network provider may refer you to a specialist who is out-of-network. Some hospitals even employ out-of-network physicians whom patients may never meet face-to-face, such as the physicians who read radiology studies. Other hospitals charge extra facility fees when they work with affiliated clinics and referral practices, or they may use an out-of-network laboratory for their patients. Sometimes these referrals or laboratory tests can cost thousands of dollars out-of-pocket.
Surprise Bills for Private-Pay Patients
Private-pay patients who lack insurance often find themselves stuck with the most surprising bills because they lack any agency to help cover their costs. In addition, without insurance, there is no one who will limit the costs or argue for smaller fees that match the national average. Uninsured patients typically have to pay the hospital or clinic’s list prices rather than the negotiated net prices charged to most insurance companies. In addition, these patients often find themselves hit with surprise bills months after the service was provided.
Surprise Bills from Cost Sharing
Cost sharing refers to both patients and insurance agencies who cover certain portions of a health care bill. For example, deductibles, copays and coinsurance are all examples of cost sharing techniques. Once again, out-of-network providers come into play in provider cost sharing. Patients may be aware of what their agreed-upon deductible, copay and coinsurance amounts are for in-network providers, but they may not be aware that the limits may be much higher or may lack caps when they are seen by out-of-network providers.
Sadly, many insurance plans today are poorly designed, forcing those without much money to opt for plans that leave them covering a high cost of each bill. Should these individuals require health care, they will end up with higher bills thanks to large coinsurance percentages and enormous deductibles.
With cost sharing, providers often work out their charges with individual insurance companies. Therefore, the same procedure may cost completely different amounts depending on the insurance plan that an individual has. Individuals may believe that their charges will be similar to what a friend who received the same procedure was charged but may be surprised when they end up with a much higher bill thanks to the cost sharing measures on the insurance plan.
Surprise Bills Due to Billing Errors
While emergency care, out-of-network costs and cost sharing certainly account for the majority of surprise medical bills, there are a few other problems that affect a minority of patients, leaving them with unexpected charges that may range from a few hundred dollars to thousands of dollars for a single procedure or laboratory test.
Every medical procedure must be associated with a specific code, known as a Current Procedural Terminology, or CPT, code, which is used for billing and for filing with insurance companies. However, in some cases, human errors may create incorrect codes, which can then lead to insurance companies denying claims or to health care organizations sending out high-cost bills. Because many hospital stays require dozens of codes, the chance of human error is quite high but may be difficult to find in a multi-page bill.
Surprise Bills from Billing Fraud
Even less common but still equally serious are surprise medical bills due to billing fraud. Although the majority of mistakes on medical bills are honest errors, some patients do occasionally receive bills that have been purposely changed or tampered with to increase compensation.
Some of the most common ways to create fraudulent charges on medical bills is by double-billing patients, unbundling services that are otherwise charged together at a cheaper rate and charging patients for more expensive procedures than they received. Some patients may even receive services that were not deemed medically necessary.
Surprise Bills Due to Identity Theft
Finally, some patients are faced with enormous medical bills for visits or procedures of which they knew nothing. While most people think of identity theft as only occurring with credit cards and bank accounts, some criminals also steal identities in order to receive medical treatments at no charge to them. Criminals steal identities in order to see doctors, receive surgeries or get prescriptions drugs. The biggest signs of medical identity theft include receiving bills, insurance claims and collection reports for services that were never received.
What Are Policymakers Doing to Combat Surprise Bills?
Surprise medical bills have become such a huge problem that many lawmakers are getting involved in the process to save their constituents money and help them avoid unexpected expenses. Over 20 states have created new policies, such as those that tie reimbursement rates for out-of-network services to Medicare rates to keep consumer bills lower. Another option discussed by some lawmakers is improving arbitration practices among insurers, medical providers and individual consumers. Although few policies are currently in effect, consumers can find hope in the fact that lawmakers realize that there is a problem and that they are actively searching for solutions.
What Can Consumers Do to Avoid Surprise Bills?
Although individuals may not be entirely able to eliminate all surprise medical bills at this time due to a lack of protective policies currently in place, they can take steps to avoid as many surprises as possible and protect their finances when they do visit a doctor or a health care facility.
-Check with the insurance company prior to the medical visit.
Many insurance companies promise to cover preventative care, but which procedures they consider to be preventative remains hidden. By calling ahead of time, consumers can rest assured that they are using in-network facilities, visiting in-network providers and are covered by their policies. This will also give them a chance to ask about copays and deductibles that may come into play.
-Check with the medical facility prior to the visit.
Some hospitals, same-day surgery centers or other health care facilities charge facility fees, which are extra charges just for using their facilities. These facility fees will be charged on top of the cost of services received. By calling ahead for non-emergency services, consumers can avoid plenty of extra fees by choosing the cheapest in-network facility in the area.
-Request a cost estimate.
Speaking of cheap facilities, some health care organizations work with consumers prior to planned procedures to determine cost estimates. While not all organizations do this, some have special billing experts who can meet with patients, determine possible costs and discuss payment plans if necessary.
-Request in-network laboratories and radiology centers.
When working with a doctor who is providing a referral for additional services, patients should always request an in-network referral whenever possible. In particular, some insurance providers offer their members higher discounts at certain laboratories or radiology centers.
-Check bills carefully, and request a line-by-line bill.
Although it can be quite disheartening to open a medical bill, individuals should always check bills as soon as they receive them and should look at each charge line by line to determine whether the bill is accurate.
-Be prepared for emergencies.
By knowing where in-network urgent care and emergency centers are in the community, patients will be prepared for health care emergencies and can save money at the same time.
Individuals who receive surprise medical bills must first ensure that the bill is accurate before simply handing over the money. A few errors can equal huge amounts of money, and patients may sometimes be able to appeal charges. By reacting quickly, individuals can often eliminate certain charges and be successful in arbitrating with the facility, doctor or insurance company in question.