Patients caught in the middle of disputes over cost of services As insurers and health care providers battle over surprise billing, patients remain caught in the middle

Richmond Times-Dispatch |

David Smith went to his doctor instead of the emergency room last October when he felt a burning in his chest, to save money. But Smith's doctor sent him straight to the hospital.

Before heading over, Smith double-checked to make sure Henrico Doctors' Hospital was in-network for his insurance company. The emergency room physician had several tests performed, gave him medicine for an irregular heartbeat and kept him overnight for observation.

Smith recovered, but then the bill came.

He was charged $1,100 for medical and diagnostic services that were out-of-network. When Smith called the hospital to complain, he was told the doctor who saw him was not in-network for his insurance, even though the hospital was.

"It's frustrating because, you know, you follow what you think are the instructions," Smith said. "And next thing you know you're getting billed for out-of-network."

Fifty-seven percent of Americans have received a surprise medical bill that they thought would be covered by insurance, according to a 2018 survey by the National Opinion Research Center at the University of Chicago, a nonpartisan policy research institution.

Several legislative bills aimed at protecting some insured patients from unexpected out-of-network charges for emergency services didn't survive the Virginia General Assembly's session this year, although President Donald Trump and a bipartisan group of lawmakers have pledged to make fixing the issue a legislative priority in the coming months, NPR reports.

The bills' fates in Virginia highlighted disagreements between insurance companies and health care providers about who's to blame and how to come to a solution. Meanwhile, patients remain caught in the middle of disputes about the cost for services.

They often end up with a "balance bill" - held responsible for paying the amount above what an insurance company is willing to cover.

Insurance companies say health care providers ratchet up out-of-network fees to squeeze money from health plans, and hospitals allow it. Providers say insurers should pay their fair share.

State Sen. Glen Sturtevant, R-Richmond, whose plan to address the issue ultimately stalled, said he was trying to help people who reach out to his office in desperation. Sturtevant's mother has been on the receiving end of a surprise bill, he said.

His proposal passed the Senate unanimously but never reached the House floor for a vote after an amendment was tacked on requiring the House money committee to consider the proposal's financial impact on the state.

"That's really frustrating," Sturtevant said of the bill's fate. "Our job in the General Assembly is to deal with issues that affect constituents."

He had the support of the Virginia Hospital and Healthcare Association, which endorsed the effort to protect patients from paying balance bills and, instead, require insurance companies to pay for all emergency services, including out-of-network, at rates determined by the average cost of similar services in the region.

"The legislation we supported sought to remove the patient from being caught in the middle of the process," said Julian Walker, vice president of communications for the Virginia Hospital and Healthcare Association. "You've got physicians, hospitals and patient and consumer advocates all in support of legislation in emergency situations regarding out-of-network care."

But Doug Gray, executive director of the Virginia Association of Health Plans, said requiring insurance companies to pay out-of-network physicians at higher rates than in-network physicians would have incentivized more physicians to be out-of-network, ultimately driving up premiums across the board for insured people.

"The hospital has set the patient up to be taken advantage of by the provider," Gray said.

Sturtevant said objections to the bill - including Gray's point that it would drive up premium costs - were "misinformation" circulated by the insurance companies' lobby to kill the bill.

"My bill was supported by patients' rights groups, the doctors' associations, hospital associations - it was really supported by all the major constituencies of medical care," Sturtevant said. "It was not supported by the health insurance industry, and that was really what it came down to."

Sturtevant plans to campaign on the issue of balance billing and resurrect his bill in the next General Assembly session.

The House Appropriations Committee did not consider the bill because it examined a companion bill from Del. Lee Ware, R-Powhatan, that it found might have driven up insurance costs for state employees without affording them the benefits of the bill's protections, said Robert Vaughn, the committee's director.

This is because the state provides insurance for about 300,000 people through a self-insured plan - when the employer assumes the financial risk for health benefits as opposed to the insurance company - and self-insured plans are only regulated by federal law. The state bills, then, would not protect people covered by self-insured plans, which make up the majority of insured Americans and many Virginians.

"That was what prompted the concern," Vaughn said. "The fact that our employees weren't going to be protected."

Instead of taking up the bill, the committee directed a work group to study the potential impact and how other states have handled the balance billing issue and report back to the committee in November.

A study by the Commonwealth Institute, a nonprofit health policy research organization, found that 25 states have some laws protecting patients from balance billing and deemed nine states' laws "comprehensive," which included setting a standard payment structure for insurers to pay providers or establishing a resolution process for disputes. The study noted the limits of state law and growing interest in turning to the federal government for a solution.

For now, patients can still get stuck with surprisingly high bills without warning.

"Most people can't afford an unexpected bill of hundreds or thousands of dollars," said Jill Hanken, director of the Virginia Poverty Law Center's Center for Healthy Communities.

The law center supported Sturtevant's and Ware's bills that died.

"Many legislators had stated that they were determined to get a resolution of this problem," she said. "But we're still where we were before."

It's been five months since Smith spent the night at Henrico Doctors' Hospital. The New Kent resident is spending the winter in Florida, but his time in the Sunshine State has been marred by fighting the charges that he thinks are unreasonable. After he appealed the four charges that had been deemed out-of-network, he received a letter stating that two of them would be switched to in-network, but the other two would stand.

Smith is still expected to pay about $600 more than he thinks is fair.

He plans to appeal again.

bbalch@timesdispatch.com

(804) 649-6601Twitter: @bridgetbalch

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