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June 12, 2018

A brutal attack sent him to an in-network ED. So how did he end up with a $7,924 bill?

Daily Briefing

    When Scott Kohan woke up in a Texas ED with a broken jaw and head injury after a violent attack, one of the first things he did was go to his insurer's website and make sure the hospital was in-network—it was, but that didn't prevent him from receiving a surprise $7,924 bill from an out-of-network doctor, Sarah Kliff reports for Vox.

    Kohan's story is part of a year-long project Vox launched in 2017 to examine how EDs charge patients for medical care. For the project, Vox is reviewing readers' submissions of ED bills from the last five years to develop an ED billing database. In the latest installment, Kliff writes about how out-of-network doctors can often treat patients at in-network hospitals, leading to surprise medical bills.

    Out-of-network docs working at in-network hospitals

    Hospitals and doctors typically enter into individual contracts with insurers over rates for their specific services and, according to Kliff, doctors can be left out-of-network if they are not able to reach an agreement with the insurer on payment rates. According to a study published last year by Christopher Garmon, an assistant professor at the University of Missouri Kansas City, as many as one in five ED visits result in patients receiving a surprise medical bill for care provided by an out-of-network physician.

    These bills are especially common when a patient is admitted to the hospital, with 20% of those patients seeing an out-of-network provider, compared with 14% of patients who stay in the ED. Garmon found that Texas—where Kohan was treated—had particularly high rates of patients seeing out-of-network providers, with 34% of ED visits leading to an out-of-network bill—significantly above the 20% national average.

    "When somebody is out of network and the patient knows that, they can avoid those providers," Garmon said, but he added that in the ED "it's very hard for patients to know this is going to happen."

    The number of in-network providers at different hospitals varies widely from insurer to insurer. For example, the Center for Public Policy Priorities (CPPP) in a report estimated that 18% of Texas hospitals don't have a single in-network ED physician for individuals enrolled in Blue Cross health plans. That number jumps up to 63% for individuals enrolled in coverage through Humana, like Kohan.

    Insurers' networks also change frequently, according to Stacey Pogue, author of the CPPP report. "Even if you were a good consumer and checked all the [EDs] around you, that network could still change each month," Pogue said. As a result, "Even with a PhD in surprise billing, you couldn't make sure to avoid a surprise bill."

    How states are trying to fix the problem

    In 2009, Texas passed a law intended to help patients like Kohan fight surprise medical bills. The law allows patients to contact the state if they receive a surprise medical bill totaling more than $500. In such instances, the state's Department of Insurance initiates a dispute resolution process to try to resolve the bill between the hospital and the out-of-network provider.

    According to Pogue, however, few patients are aware of the law. Pogue's research has found that 3,824 patients in Texas have taken advantage of the process since 2009, despite estimates by CPPP that patients have received roughly 250,000 surprise medical bills in Texas since 2009. According to Kliff, Kohan, also was unaware of this option. (The out-of-network oral surgeon who operated on Kohan ultimately dropped the $7,924 bill the day after Kliff reached out for comment).

    Other states—like California and Connecticut—have similar laws that aim to protect patients against surprise medical bills, according to Kliff. The laws require hospitals and providers to settle their out-of-network billing disputes directly, without contacting the patient for payment. However, those laws only cover patients with smaller health insurance plans that are regulated within the states, and do not cover individuals enrolled in health plans sold by large insurers that have members nationwide, Kliff reports.

    According to Garmon, a "federal solution" is needed. "Right now it's a patchwork, where some states have protections and others don't," he said, adding, "And there are no protections if you're in a self-insured, large-employer plan, and there needs to be a solution for those people."

    For his part, Garmon favors a process he refers to as "baseball-style arbitration," in which the hospitals and providers both come up with a price they believe to be fair and meet somewhere in the middle. "They'd be forced to come to the table, and that would take the patient out of the middle," he said (Kliff, Vox, 5/23).

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