Surprise Out of Network Billing Loophole That Could Cost You A Lot of Money

I thought this might be important for everyone to read.  This is from a story written by Harris Meyer on February 28th, 2023 by the Kaiser Health News of the Kaiser Family Foundation.

It is dangerous to assume that medical bills will be covered the way you might think they will be...

It is dangerous to assume that medical bills will be covered the way you might think they will be, especially if the provider is listed as out of network, even in an emergency situation.  The “Surprise Billing Law” is supposed to protect patients and families from exorbitant charges when a true medical emergency exists and the hospital that you are taken to is an out of network facility.  In the case below, a woman was sent to a non-participating hospital under her particular medical plan contract, but the hospital did have a broader participating contract with her insurer (though not necessarily her plan) and so the “Surprise Billing Law” did not apply to this situation.  The family was going to be on the hook for many thousands of dollars while believing that the hospital admission, which was an emergency, would be covered under the in-network benefits, because this was a true medical emergency.

Out of network costs, and how they are handled by the insurers, need to be looked at by everyone who has commercial insurance, be it group, individual, or Medicare Advantage.  This story took place in Washington state, and there can be differences in state laws, but this is also part of a larger federal law and gaps like this should be closed.

Surprise-Billing Law Loophole: When 'Out of Network' Doesn't Quite Mean Out of Network

By Harris Meyer • FEBRUARY 28, 2023

Laskey and her husband, Jacob, made the three-hour trip to the Swedish Maternal & Fetal Specialty Center-First Hill. Laskey had sought the clinic’s specialized care for this pregnancy, her second, after a dangerous complication with her first: The placenta had become embedded in the uterine muscles.

Back in Seattle, doctors at the clinic found Laskey’s water had broken early, posing a serious risk to her and the fetus, and ordered her immediate admission to Swedish Medical Center/First Hill. She delivered her son after seven weeks in the hospital. Though she was treated for multiple postpartum complications, she was well enough to be discharged the next day. Her son, who is healthy, went home a month later.

Laskey soon developed a fever and body aches, and she was told by her OB-GYN to go to Swedish’s emergency department. She said doctors there wanted to admit her when she arrived Aug. 20 and scheduled a procedure for Aug. 26 to remove a fragment of placenta that her body had not eliminated on its own.

Laskey, who had already spent weeks away from her 3-year-old daughter, chose to go home. She returned for the procedure, which went well, and she was home the same day.

Then the bills came.

The Patient: Danielle Laskey, 31, was covered by a state-sponsored plan offered by her employer, a local school district, and administered by Regence BlueShield.

Medical Service: In-patient hospital services for 51 days, plus a one-day stay that included a second placenta removal procedure.

Service Provider: Swedish Medical Center/First Hill, part of Providence Health & Services, a large, nonprofit, Catholic health system.

Total Bill: Swedish, through Regence, billed about $120,000 in cost sharing for Laskey’s initial hospitalization and about $15,000 for her second visit and procedure.

What Gives: The specialized clinic caring for Laskey before her hospital admission was in her insurance plan’s network. The clinic’s doctors admit patients only to Swedish Medical Center, one of the Seattle area’s only specialized providers for Laskey’s condition – which, given that connection, she assumed was also in the network.

So after being urgently admitted to Swedish, Laskey believed her bills would be largely covered, with the couple expected to pay $2,000 at most for their portion of in-network care because of her plan’s out-of-pocket cost limit.

...neither Swedish nor Regence told them before or during the two hospitalizations that Swedish was out of network

It turned out Swedish was out of network for Laskey’s plan and, at first, Regence determined that Laskey’s hospitalizations were not emergencies. In November, a Regence case manager initially told Jacob that Laskey’s lengthy hospitalization was an emergency admission and out-of-network charges would not apply. But then she called back and said the charges would apply after all, because Laskey had not come in through the emergency department.

Both Washington state and federal laws prohibit insurers and providers from billing patients for out-of-network charges in emergency situations. The couple said neither Swedish nor Regence told them before or during the two hospitalizations that Swedish was out of network, and that they never knowingly signed anything agreeing to accept out-of-network charges.

Jacob, who works as a psychiatrist at a different hospital, said he mentioned the surprise ­billing laws to the case manager, but she replied that the laws did not apply to his family’s situation.

“Under the Washington state and federal balance-billing laws, the definitions of whether a provider is considered in network hinges on whether there is a contract with a specific provider,” Bach said.

Ashley Bach, a Regence spokesperson, confirmed to KHN that both stays now will be covered as emergency, in-network services, eliminating Swedish’s coinsurance charges. But in what appears to be contrary to the insurance commissioner’s stance, he said the bills had not violated state or federal laws prohibiting out-of-network charges in emergency situations because of the contract with Swedish covering all its plans.

On Jan. 27, two days after KHN contacted Regence and Swedish about Danielle Laskey’s case, a Regence representative called and informed her that her second hospitalization also would be reclassified as an in-network service.

On Jan. 13, Regence said it would grant the Laskeys’ appeal to cover the first hospitalization as an in-network service, erasing the biggest part of Swedish’s bill but still leaving the family on the hook for the $15,000 bill for Danielle’s second visit and procedure.

“Danielle had an emergency and Regence acknowledges it was an emergency, so she cannot be balance-billed,”

The office told KHN that the “participating provider” contract does not override the laws barring out-of-network charges in emergency situations. “Danielle had an emergency and Regence acknowledges it was an emergency, so she cannot be balance-billed,” said Stephanie Marquis, public affairs director for the Washington state Office of the Insurance Commissioner.

The Resolution: In December, the couple appealed Regence’s approval of Swedish’s out­of-network charges for the 51-day hospitalization, claiming it was an emergency and that there was no in-network hospital with the expertise to treat her condition. They also filed a complaint with the state insurance commissioner’s office.

“We had no luck with Swedish taking any role or responsibility with regard to our billing or advocating on our behalf,” Jacob said. “They basically just referred us to their financial department to put us on a payment plan.”

Natalie Kozimor, a spokesperson for Providence Swedish, said the hospital disagreed with “some of the details and characterizations of events” presented by the Laskeys, though she did not specify what those were. She said Swedish assisted Danielle with her appeal to Regence.

After he declined to apply for the hospital’s financial assistance program, Jacob said Swedish also notified the couple in November that they had two months to pay or be sent to collections.

...since there was a contract specifying a 50% coinsurance rate when Swedish was out of network for a particular Regence plan, those laws legally may not apply...

If there had been no contract between Regence and Swedish, the laws clearly would have prohibited those charges. But since there was a contract specifying a 50% coinsurance rate when Swedish was out of network for a particular Regence plan, those laws legally may not apply, Fiedler said.

Matthew Fiedler, a senior fellow at the University of Southern California-Brookings Schaeffer Initiative for Health Policy who studies out-of-network billing, said Laskey’s case seems to fall into a “weird” gray area of the state and federal laws protecting patients from out-of-­network charges in emergency situations.

Ellen Montz, director of the Center for Consumer Information and Insurance Oversight at the Centers for Medicare & Medicaid Services, said that under the federal No Surprises Act the definition of a “participating” emergency facility that’s subject to the law’s surprise billing protections depends on whether the facility has a contract with the insurer specifying the terms and conditions under which an emergency service is provided to a plan member.

Experts said they had not heard of out-of-network providers evading surprise-billing laws by being contracted as “participating providers” until KHN asked about Laskey’s case.

Setting the terms with an insurer for providing its members emergency or other care appears to allow hospitals to sidestep new surprise-billing laws that prevent out-of-network providers from charging high, unpredictable rates in emergencies, according to government and private-sector medical billing experts.

What’s the difference between a hospital that’s “in network” and one that’s a “participating provider”? In this case, by contracting with Regence as an out-of-network but also participating provider, Swedish straddled the line between being in and out of network – designations that traditionally indicate whether a provider has a contract with an insurer or not.

The broader contract allowed Swedish to bill members of any Regence plan who receive out-of-network services there 50% coinsurance – the patient’s portion of the overall cost the insurer allows the provider to charge – with no out-of-pocket maximum for the patient.

It was only after Regence was contacted by KHN that the insurer explained its reasoning to the reporter: Regence said the Swedish hospital, while out of network for Danielle, had a broader contract with the insurer as a “participating provider” and so the insurer was not in violation of surprise-billing laws by approving Swedish’s out-of-network coinsurance charges.

The Takeaway: More than a year after the federal surprise-billing law took effect, patients can still get hammered by surprise bills resulting from health plans’ limited provider networks and ambiguities about what is considered emergency medical care. The loopholes are out there, and patients like Laskey are just discovering them.

...patients can still get hammered by surprise bills resulting from health plans’ limited provider networks and ambiguities about what is considered emergency medical care.

Washington state Rep. Marcus Riccelli, chair of the House Health Care and Wellness Committee, said he will ask the state’s public and private insurers what steps they could take to avoid provider network gaps and out-of-network billing surprises like this. He said he will also review whether there is a loophole in state law that needs to be closed by the legislature.

Bruce Alexander, a CMS spokesperson, said the Departments of Health & Human Services, Labor, and Treasury are looking into this issue. While the agencies can’t predict whether a new rule or guidance will be needed to address it, he said, “they remain committed to protecting consumers from surprise medical bills.”

Congress might have to fix the problem, since the federal agencies that administer the No Surprises Act may not have authority to do anything about it, he added.

Fiedler said policymakers need to consider addressing what looks like a major gap in the new laws protecting consumers from surprise bills, since it’s possible that other insurers across the country have similar contracts with hospitals. “Potentially this is a significant loophole, and it’s not what lawmakers were aiming for,” he said.

In the meantime, patients, even in emergencies, should ask their doctors before a hospital admission whether the hospital is in their plan network, out of network, or (watch for these words) a “participating provider.”

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

As the Laskeys discovered, hospital billing departments may offer little help in resolving surprise billing. So, while it is worth contesting questionable charges to the provider, it’s also usually an option to quickly appeal to your state insurance department or commissioner.

Bill of the Month is a crowdsourced investigation by KHN and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!


Have You Put Off Medical Treatment Because of the High Cost?

American’s are putting off accessing medical treatment, even for serious chronic conditions, more than ever before.  The reason for this is they fear the high cost of actually using their health insurance and whether, their doctor recommended procedures will even be approved by insurers only looking at their bottom line.

American’s are putting off accessing medical treatment, even for serious chronic conditions, more than ever before.

A poll done in early January of 2023 found that 38 percent of respondents put off scheduled medical care due to cost.  That is more than one out of every three respondents.  That is a 12 point increase over the last two years.  Why is this happening?

Individual and family plans, under the Affordable Care Act, back in 2014 when healthcare.gov and other state based exchanges became the way most Americans who were not offered coverage through an employer plan or federal or state programs, had an out of pocket maximum of $6,350 per individual and $12,700 per family.  An out of pocket maximum is the amount reached by one person, or the entire family, before all covered services will be paid by the insurer at 100% for the remainder of that calendar year.  There have been steady increases every year since then, including during the pandemic years of 2020 through 2022; and in 2023 the out of pocket maximum is now $9,100 for an individual and $18,200 per family. That is a 43% increase in the cost of accessing medical services under the AFFORDABLE CARE ACT!  On January 4th of 2023 it was already announced that in 2024, the out of pocket maximum will be $9,450 for an individual and $18,900 for a family.  These out of pocket maximums are also seen in employer based coverage as well.  Why is that information not being talked about more by the news media and politicians?  It is hard to call this, along with exorbitant premiums, AFFORDABLE.

That is a 43% increase in the cost of accessing medical services under the AFFORDABLE CARE ACT! ... It is hard to call this, along with exorbitant premiums, AFFORDABLE.

In an article dated July 20, 2022, in the Peterson KFF Health System Tracker, between 2014 and 2033 wages are expected to rise by 83% and that sounds amazing.  Unfortunately for your health, the Affordable Care Act out of pocket maximum is expected to rise by 122 percent in that same time period!

How does this affect seniors on Medicare Advantage Plans?

We have all seen the commercials talking about $0 premium plans being sold to us by insurers, using older nostalgic stars of the past, telling seniors that they can get all their medical care under one roof using a Medicare Advantage Plan. They tout $0 premium plans that offer a $0 copay for a primary care physician, have dental, routine vision and routine hearing coverage , prescription drug coverage, PART B buybacks (even though most of the plans don’t offer them or only give $10 or $20 as a benefit), free food (usually only available on Dual Eligible Medicare Medicaid Plans – but advertised as if that was available for all), and more.

What they DON’T mention is the allowed out of pocket maximum.  That means the amount of money that a person, with a Medicare Advantage plan, will have to pay out of their own pocket before all their medical bills will be paid by their private insurer at 100% for the remainder of the year. For 2023 that can be as high as $8,300 per person, and that figure does not include prescription drug costs, dental, routine vision, routine hearing, or any other costs that would not be covered under Original Medicare Parts A and B!  This has risen steadily from 2020, when the allowed out of pocket maximum was $6,700 per person. $8,300 plus all those other costs for prescription, dental, etc. for people on a fixed income is not keeping up with the 8% inflation rate!

Medicare Supplement Plans, such as the very popular “G” plan in 2023 have an out of pocket costs of $226 for the year, on medical expenses only (those services covered by Part A and Part B under Medicare).

Medicare Supplement Plans, such as the very popular “G” plan in 2023 have an out of pocket costs of $226 for the year, on medical expenses only (those services covered by Part A and Part B under Medicare).  Unfortunately, those are not the plans being given so much air time in television commercials, billboards, and mailings.  Ask yourself, if you know that a medical service is going to cost you very little or nothing (maximum of $226.00 on all Part B Services and $0 on all covered Medicare Part A Services for the entire year) are you more likely to access the medical treatment that you need than if you have a plan that has an out of pocket maximum of $8,300 for the year on all those same covered services? And, those who think that they are healthy now so take a Medicare Advantage Plan initially, believing that their will be an ANNUAL ENROLLMENT PERIOD each year, where they can join a Medicare Supplement Plan (with no health questions asked) are SHOCKED to find out that they cannot do that , due to medical underwriting, when they develop chronic health conditions later on in life as they age.  This is an inevitability for almost everyone.

It becomes incredibly clear why people are not keeping up with their healthcare appointments and putting off the cost of needed treatments.  It is so incredibly important that people make noise about what the medical plans offered to them really cost and the best way to do that is to contact your local representatives in CONGRESS and contact the news media.  Health coverage should be a right enjoyed by all and not just for those who can afford it!

It is so incredibly important that people make noise about what the medical plans offered to them really cost and the best way to do that is to contact your local representatives in CONGRESS and contact the news media.


Saving money on healthcare opportunities

Opportunities To Save MONEY on Family Health Plans in 2023

Has this happened to you? As an employee you have been offered coverage through your company health plan, and the employer is paying a portion, up to 100% of your coverage, and that coverage is also open to your spouse and children – but they had to pay as much as 100% of the premium. Affordability of employer health insurance for family members was based on the cost to enroll only the employee, regardless of the cost of family coverage. Even if the cost to enroll family members was significantly more than the cost to enroll the employee, the coverage was still considered “affordable” for the family members, making them ineligible for financial assistance through marketplaces like Pennie. That hit many people’s bank accounts very hard each month. In 2023 that has changed for the better!

The New Solution

Under this new rule, starting with 2023 coverage, family employer plans will only be considered “affordable” if the actual cost to enroll each member of the family is within the ACA affordability standards.  In other words,

...when employer coverage for family members costs too much, the family members may qualify for financial assistance through Pennie, instead of being forced to pay full price.

Pennie’s application has been updated to include a new question for all members of a tax household with an offer of family coverage through a spouse or parent’s employer. Each tax dependent will be asked to provide the premium of the lowest cost family plan (employee + spouse + other dependents). Pennie will then determine for each family member whether that employer coverage is affordable to determine whether each person may be eligible for savings through Pennie.  The employer coverage may be affordable for some family members but not others, resulting in only some family members being eligible for financial savings.


A BIG change for families that can make their health coverage more affordable on Pennie

When purchasing health insurance, whether it is through an employer plan or through Pennie or directly through an insurer, it is sometimes hard to understand where the term “affordable” fits into the “Affordable Care Act”.  When a family has an individual who is covered through an employer plan and other members of the family were able to get coverage through that plan (even if they had to pay full price – which is most often the case anymore) then no one in the family qualified for an Advanced Premium Tax Credit through Pennie, or the Federal Marketplace.  That is now changing!

FOR AWARENESS: 

Under new federal rules, Pennie can now provide savings to more Pennsylvanians!

Learn more below:

What happened? 

In October, the Biden administration finalized a rule changing how affordability is calculated for family members with an offer of health insurance through their spouse or parent’s employer.

What was the problem?

Until now, affordability of employer health insurance for family members was based on the cost to enroll only the employee, regardless of the cost of family coverage. Even if the cost to enroll family members was significantly more than the cost to enroll the employee, the coverage was still considered “affordable” for the family members, making them ineligible for financial assistance through marketplaces like Pennie.

This so-called “family glitch” forced family members to choose between two expensive options, the employer family plan or a full price marketplace plan.

What is the new solution?

Under this new rule, starting with 2023 coverage, family employer plans will only be considered “affordable” if the actual cost to enroll each member of the family is within the ACA affordability standards. In other words, when employer coverage for family members costs too much, the family members may qualify for financial assistance through Pennie, instead of being forced to pay full price.

Pennie’s application has been updated to include a new question for all members of a tax household with an offer of family coverage through a spouse or parent’s employer. Each tax dependent will be asked to provide the premium of the lowest cost family plan (employee + spouse + other dependents). Pennie will then determine for each family member whether that employer coverage is affordable to determine whether each person may be eligible for savings through Pennie.  The employer coverage may be affordable for some family members but not others, resulting in only some family members being eligible for financial savings.

Communication to the Impacted Population at Pennie: 

Pennie will be emailing and calling those customers and applicants who previously indicated on their application they had an offer of family coverage from their spouse or parent’s job. These customers will be asked to update their application to provide the additional information about the cost of employer-sponsored coverage, to determine if they may be newly eligible for financial savings.

The “family glitch fix” question will be available to all Pennie customers who submit a new 2023 application, or who update their existing 2023 application, ensuring they get access to the financial savings they qualify to receive.


Ways To Help With The High Cost Of Prescription Drugs

Have you ever felt that your money was being ripped out of your hands when you had to fill prescriptions at pharmacies? While there are no fool proof answers to the problem, whether you have individual insurance, Medicare prescription insurance, or even many group plans, the costs are prohibitive for many of the most commonly prescribed brand name and high-cost generic drugs. There are some options to look at however though some may mean having to do a bit of work.

It takes people making noise to make a difference.

Most people are now familiar with drug discount programs like Good RX, Single Care, and Script Saver. Many have also heard of “Cost Plus Drug”, an online pharmacy began by Mark Cuban that is actually starting to team up with insurance companies in Pennsylvania like Capital Blue Cross**. This may be something that you would want to write to your current health insurance or prescription drug plan about. It takes people making noise to make a difference. I keep running into too many people being willing to say, “What can I do about it?”. You can make noise about the ridiculous pricing of medications in the United States not only to your insurer but also to your representatives in both the state and federal Congress! They will listen if enough people complain but they won’t do anything if you keep silent!

Another big suggestion I constantly make to my clients is to form a relationship with a small independent pharmacist. You cannot help yourself more than by doing that. A small, independent pharmacist has more control over their costs than a pharmacist in a “big box store” that is corporately owned. Studies over the years have consistently shown that small, independent pharmacists overall cost the public less versus the major corporate pharmacies and big box stores when it comes to more expensive drugs. The reason for this is that they can set their own pricing. They will never come out the lowest in cost on Medicare.gov comparisons because you can’t negotiate pricing on that site.

Form a relationship with a small pharmacy

My suggestion is to form a relationship with a small pharmacy and then ask them what they would charge you if you didn’t use your prescription drug card from your insurance at all for your medications. It may not work out the best for very low-cost drugs, because the big box stores negotiate those low-cost drugs at little to no cost to consumers as a way to attract business. Unfortunately, they often have very high pricing for mid-level and higher drugs. Smaller pharmacies may offer home delivery, medication consultations, will talk with your doctor about alternative medications that may be less costly, and have the time to spend with you because they are not under corporate pressures.

Call or email me with any questions. I hear over and over again that the cost of medications are just too high and the government is not doing enough, fast enough, to make the costs less for Americans.

Just a few months since announcing our collaboration with Mark Cuban Cost Plus Drug Company (Cost Plus Drugs), we’re expanding it! Starting January 1, 2023, Cost Plus Drugs will begin accepting Capital Blue Cross prescription drug coverage.

Capital Blue Cross was the first health plan in the country to collaborate with Cost Plus Drugs, helping our members and communities gain greater access to low-cost prescription drugs and transparent pricing. Now, our prescription drug plan members will be able to add their Capital ID card number to their Cost Plus Drugs online account to apply their benefits. Using Cost Plus Drugs is easy.

Cost Plus Drugs is affiliated with billionaire Mark Cuban, who’s working to disrupt the drug industry by offering substantially discounted pricing on a wide range of commonly used generic drugs. Discounts can be as large as 80% below retail!

All costs (except expedited shipping) are included in the cost of each drug on the Cost Plus Drugs website. Pricing is consistently based on: the cost they pay for a drug; plus 15% (to pay for running their business); a pharmacy charge for dispensing the drug; and a charge for standard shipping.