Putting the kibosh on surprise medical bills
On July 1, the Biden administration and Department of Health and Human Services issued an interim ruling under the No Surprises Act, passed by Congress in 2020, aimed at “shielding patients from increased financial hardships stemming from surprise medical bills.” The ruling, to take effect Jan. 1, 2022, “will restrict excessive out of pocket costs to consumers from surprise billing.”
Surprise medical billing occurs when a health care provider bills a patient for the difference between the amount covered by a patient’s insurance and the fees charged by the provider. In many cases, the dispute stems from patients unwittingly using “out-of-network providers” such as a radiologists, anesthesiologists or emergency-room physicians. Many patients assume those providers are in network because the hospital where the medical care occurs is in their insurance network.
Surprise billing has been a battle cry for State Treasurer Dale Folwell for years. In 2019 he began pushing his Clear Pricing Project to stop such practices and encouraged health care providers to bundle medical care so that insurers pay a specified rate for medical procedures. He also has attacked “split billing,” or billing twice for the same service, which he says happens too often.
He cited a parent telling him about his son, a soccer player who had two ingrown toenails. “They went in to get it fixed. But it was two toes, two facility fees, two big bills, but it was one visit. It was almost like they had gone in to the doctor twice. This is happening hundreds, if not thousands, if not tens of thousands, of times a year to the State Health Plan,” referring to the insurance program that covers more than 700,000 N.C. state employees and retirees.
“The North Carolina Healthcare Association has supported federal legislative efforts protecting patients from surprise bills, including the No Surprises Act,” says Cody Hand, NCHA senior vice president of government relations. “We see the regulations just released as welcome news for North Carolinians. We were disappointed that consumer protection from surprise ground ambulance bills was not included in the final language, because that is something we had supported, as well.”
The association represents more than 130,000 individual and multi-hospital health care systems. Hospitals support almost 400,000 jobs across the state, or 8.7% of total employment, according to the group.
Folwell says Biden’s order should mean patients won’t face inflated prices if they are rushed to an out-of-network hospital during an emergency. He says the ruling should prompt N.C. hospitals to stop employing billing practices that are confusing and not transparent to patients.
“When these entities, which are really investment and real estate firms that happen to be in the health care business, look at their original missions, that they were and still are, hospitals that are owned by the citizens of the community. And that having an industry that operates in secrecy and has billions in the bank is what I refer to as being on the wrong side of history.”
Folwell also wants President Biden to outlaw facility fees, which hospitals levy for the right to offer various services. “We are hearing of people being charged a $125 facility fee for an $11 flu shot,” he says.
The ruling on surprise billing follows new requirements that the 6,000 U.S. hospitals disclose the reimbursement rates charged on procedures by various insurance companies. “The data offer the first full look inside the confidential deals that set healthcare rates for insurers and employers covering more than 175 million Americans,” The Wall Street Journal reported in February. “The submissions also illuminate how widely prices vary — even for the same procedure, performed at the same facility — depending on who is paying.”
The article cites a California hospital at which billing for a caesarean section is $6,241, $29,257, $38,264 or $60,584, depending on the patient’s insurance plan, for the same procedure.
Folwell is backing N.C. House Bill 169, which was intended to provide the State Health Plan with clearer explanations of its patients’ medical bills. “We spend $3 billion a year on health care, and we don’t even have access to our own data. Can you imagine if you want to buy a pack of Nabs and a Coca-Cola and the bill depended on what kind of credit card you had? We don’t accept these standards in any other aspect of our lives, but we do in health care.”
But the bill has been amended to make the information even harder to obtain, Folwell says.
The hospital association notes that “health care consumers are becoming more engaged and asking for information about pricing and out-of-pocket costs for health care services. However, providers can’t always offer a simple, standard price for any given health care service.”
Synopsis of N.C. hospital systems’ comments about transparency in billing, from their websites:
Cone Health: “We are committed to helping you estimate costs of your care. When planning procedures and services, we understand out-of-pocket costs are an important consideration. As with all estimates, we cannot guarantee your actual charges or what you may be responsible for paying. Actual out-of-pocket costs and differences in pricing between hospitals and providers are impacted by many variables.”
Duke Health: “If you don’t have insurance or other third-party coverage, you will get a discount equal to the best discounts offered to insurance companies. The discount is automatically applied to your bill.”
UNC Health: “UNC Health has developed a new online tool that allows patients to calculate estimates of their own out-of-pocket cost before receiving care. The goal is to improve transparency for consumers who struggle with rising medical costs, and provide more information to help inform their medical care and decisions.”
Vidant: “In keeping with the Center for Medicare & Medicaid Services hospital price transparency guidelines, Vidant Health is providing links below to each of our hospital’s Chargemaster price list. The prices do not always reflect all costs associated with service, and the service may be represented by multiple line items. Per CMS guidelines, the price lists will be updated annually.”
Wake Forest Baptist: “Estimating the price of a health care procedure can be complicated. The hospital pricing information provided is based on an average amount billed to patients that have had this service at our facility over a period of time. Depending on your health insurance policy, you may be responsible for paying all or part of the allowed amount.”
WakeMed: “Due to the complexity of hospital billing and the wide variety of insurance plan options, your best option for understanding your out-of-pocket costs for health care services is to speak directly with your insurance company or to request an estimate from our financial services team.” WakeMed also offers ‘shoppable’ services, which is a price list based on information gathered from our claims and insurance payment files. The system says actual charges may differ for many reasons including the seriousness of one’s medical condition and the services received.”
Atrium Health: “We understand that health care costs can be very confusing, and we want to ensure patients understand potential costs as clearly as possible. We’re pleased to offer patients a tool to estimate their out-of-pocket hospital costs for common medical procedures and tests. This online tool calculates the estimated out-of-pocket hospital costs based on the selected procedure and a patient’s insurance information.”
Surprise billing is a critical issue, Folwell emphasizes. “When we talk about this subject, we’re talking about the average North Carolinian and the people who are one surprise medical bill from being economically blown up, or having their credit score destroyed, which is a step away from being economically blown up.”