Bobby Redwood, MD, MPH
President, Wisconsin ACEP
Out of network billing (OONB) is a concept that is understandably difficult for our patients to grasp. The usual story goes like this: an insured patient presents to an emergency department during a period of vulnerability and need, they receive high quality emergency care, but then receive a bill six weeks later stating that their hospital fees are covered by insurance, but their physician services are not. From a patient perspective, that looks like the hospital is charging a couple hundred dollars, while the emergency physician is charging a couple thousand…what gives?!
As physicians, the problem seems pretty simple…the insurer is refusing to pay. In other words, the patient’s emergency physician did the work and the insurance company, in an effort to increase revenues for their shareholders, has created an unreasonably narrow network of providers in order to cut costs (and stick the patient with the bill for physician services). The patient has done nothing wrong here. They bought insurance and had an emergency. It is quite reasonable to be angry that the insurance they spent their hard-earned money on is not paying for the services it was supposed to cover.
Of course, as physicians, we have an intimate knowledge of the health care bureaucracy and the unscrupulous maneuvers that insurers turn to in order to avoid payment are nothing new to us. The problem is that physicians and physician staffing companies have been receiving the lion’s share of the blame for a phenomenon that we have very little (if any) control over. The New York Times has reported extensively on OONB. They routinely call it “surprise billing” and have quoted health policy experts calling the practice everything from, “a bait-and-switch” to “financial roulette” to “the health equivalent of a carjacking.” The Times is one of my most trusted news sources, but on this issue, they really miss the mark.
In an article titled, Surprise! Insurance Paid the E.R. but Not the Doctor, the Times authors state that; “These doctors negotiate separate deals with insurance companies for payment. If the doctor and the insurance company never strike a deal, the visit is billed at much higher out-of-network rates”. There is a partial truth here, some independently owned physician groups are placed in the difficult position of having to contract with as many insurance companies as possible to mitigate the effect of the insurance companies’ cruel insistence on not covering all aspects of emergency care. Still, it is disingenuous to paint problem in such a way that places physicians as equal partners in this inhumane withholding of emergency care coverage. For those physician groups that do need to negotiate their rates in order to be considered “in-network”, the rates that payers offer are often far below fair market value. Personally, as a contracted employee of an independently owned hospital, I am not out there negotiating which unfairly narrow networks will cover my labor—I clock in, I see patients, I clock out.
Another Times article titled, The Company Behind Many Surprise Emergency Room Bills tries to pin the blame on the national physician staffing company EmCare. Citing a single study that has been widely criticized for flawed methodology, the authors portray EmCare as an evil corporation that swooped in to a rural emergency department, increasing the cost of an average level 5 visit from $467 to $1,649. This sounds concerning of course, but the readers are not told that patients are now being seen by emergency specialists. Has the quality of care improved? Is the hospital able to handle more complex pathophysiology in-house with specialists in the emergency department? Were they even able to staff the facility appropriately prior to the EmCare contract? We do not know, because the article does not say, but I suspect there is a lot more to the story than EmCare running up the tab.
There is a practical solution to the OONB problem of course. Four states have adopted the Minimum Benefit Standard, which essentially mandates that insurers cannot pay providers less than 80% of usual professional service charges. These charges are based on a geographically comparable database of usual and customary clinician charges and the database is maintained by an independent non-profit organization. In other words, these states let a third party decide what fair compensation is and then compensate their providers fairly without putting the patient in the crosshairs of our unnecessarily complicated insurance landscape. An in-network discount is reasonable, but patients should not be financially punished for having a medical emergency.
At present, we at WACEP have thankfully not heard many OONB horror stories in our state, but we are keeping our ears to the ground and have put together a task force to explore the issue. Has your group been a victim of unfair OONB practices? Are your patients complaining about billing practices that are out of your control? We’d like to hear from our membership on this important issue.
For more information, check out ACEP’s website on fair coverage and the cited NY Times articles below: