Health Insurance

I thought this might be important for everyone to read.  This is from a story written by Harris Meyer on February 28^th, 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, 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.

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.

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.

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.

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.

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!

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.

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 4^th 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.

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!

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).  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!