Despite using the same doctor, hospital, and insurer for two similar surgeries, a man received two very different bills—with the second more than $20,000 higher than the first—thanks to two "maddening health system pitfalls," Phil Galewitz writes for Kaiser Health News.
A dramatic increase in cost between 2 surgeries
Ely Bair, a 35-year-old quality assurance analyst, experienced migraine headaches, jaw pain, and high blood pressure for years until a dentist recommended he get surgery to realign his jaw, which could treat the root of the problem, Galewitz writes.
According to Galewitz, Bair required two surgeries over a few years and had to wear braces before and in between the procedures.
Bair had his first surgery, which was performed on his upper jaw, at Swedish Medical Center, First Hill Campus in Seattle. The surgery was covered under Bair's plan from Premera Blue Cross, and his out-of-pocket cost was $3,000, Galewitz writes.
In 2020, Bair had his second surgery—under the same insurer, although through a new employer—this time on his lower jaw, at the same hospital where he had been treated before. But this time, Bair received a $27,119 bill.
According to Galewitz, this was Bair's portion of the negotiated rate after the hospital took $14,310 off the charge and his insurer paid $5,000. The additional costs were what Bair owed to the surgeon and anesthesiologist.
Legal loopholes behind the increase
According to Galewitz, two "maddening health system pitfalls" were behind the substantial increase in cost for Bair's second surgery—legal loopholes that could affect patients at any hospital in a similar situation. The first loophole was that Bair believed his new health plan had the same benefits as his old plan since his insurer remained the same. The second was that he believed the procedure on his mouth would be covered like any other medical procedure.
Large companies, such as Bair's employers, typically "self-insure" their workers, Galewitz writes, meaning that they pay for their workers' health costs but rely on insurance companies for provider networks and claims processing.
Under Bair's previous employer's plan, which covered oral and maxillofacial surgery, the out-of-pocket maximum was $3,000—the cost that Bair paid for the first surgery. Bair assumed cost of his second surgery would be similar even under his new plan since he was using the same hospital and insurance carrier.
However, after Bair received the bill from his second surgery, he learned his new plan had a $5,000 lifetime limit for coverage of orthognathic surgery, the reconstructive jaw procedure that he underwent.
In 2014, Affordable Care Act (ACA) eliminated lifetime and annual caps on insurance coverage of broad categories of "essential health benefits." But individual states are the ones to determine which services are covered under those categories, along with the scope and duration of coverage, Galewitz writes. For example, insurance coverage for bariatric surgery, physical therapy, and abortion may vary significantly from state to state under the ACA provision.
In Bair's home state of Washington, orthognathic surgery is not considered an essential health benefit. According to Galewitz, this is because the surgery is sometimes performed for cosmetic instead of medical purposes. In addition, health plans sometimes consider the surgery an orthodontic procedure—which frequently has coverage limits.
Although the procedure was a "clear medical necessity" in Bair's case, without an ACA requirement for orthognathic surgery, an insurer could provide different benefits and set annual and lifetime caps on coverage, Galewitz writes.
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"Essential health benefits serve a really important function, and when there are gaps or holes people can really get hurt," Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University, said.
According to Galewitz, Bair appealed to his insurer three times to reconsider covering only $5,000 of his surgery, but the insurer maintained that he was responsible for any care over the $5,000.
Bair then decided to file a complaint with the state attorney general's office in December 2020. A few months later, the hospital reduced his bill from $27,313 to $7,164.
In a statement, Swedish Medical Center said, "Because neither the patient nor his provider was aware of this limitation in coverage prior to the procedure, the surgeon advocated on the patient's behalf to get the bill lowered."
According to Bair, his surgeon, who helped him fight the first bill, reduced his surgical bill from $10,000 to $5,000.
Bair agreed to pay the reduced bill, Galewitz writes, and Adaptive Biotechnologies, Bair's employer, is looking into getting rid of its $5,000 lifetime limit for orthognathic surgery when it's medically necessary, as it was in Bair's case.
"The [$7,164] bill is at least a much more manageable number than the financial ruin $27,000 would have been," Bair said. "I am just looking forward to closing this chapter and moving on." (Galewitz, Kaiser Health News, 8/27)