Surprise Hospital Bills – The Debate Continues

The debate continues in New Jersey and New York regarding what to do about out-of-network charges and balance bills when the consumer has no opportunity to choose or shop for care. Several State Legislatures are trying to tackle this problem in order to protect the consumer from large unexpected medical bills. Another related challenge is who should take the financial burden of these bills: the insurance company – by paying out of network bills, or the medical provider – by accepting less payment.

Restarting N.J. hospital billing debate

By Lindy Washburn, The Record

Michael Young, a 24-year-old college student, thought he was going to die a year ago May when he called 911 while visiting his father in Paramus.

It turned out he had appendicitis. The ambulance took him to The Valley Hospital in Ridgewood, where a surgeon performed an emergency appendectomy.

Now Young faces a different kind of crisis: The anesthesiologist that night at The Valley Hospital is suing him for $2,200 — after his insurer paid $726.

Surprise medical bills just keep coming for patients in New Jersey, five months after the Legislature’s effort to fix the problem died. Some come from hospital-based doctors who don’t accept the same insurance plans as the hospital where they work. Others are received by patients with out-of-state or federally regulated coverage who go to out-of-network emergency rooms — New Jersey regulations that require the insurer to protect its members from balance billing in such cases don’t apply to their plans.

Young gets his coverage through a family insurance plan for retired New York City employees; it is outside the jurisdiction of New Jersey regulations.

His anesthesiologist was part of Bergen Anesthesia group, which does not participate in his insurance plan. There were no other choices when the ambulance took him to Valley because it is the sole provider of anesthesia services there.

The insurer — GHI/EmblemHealth — paid about a quarter of the $2,900 he was charged for anesthesiology for lower abdominal surgery under emergency conditions. GHI used its own fee schedule to determine what they considered appropriate; Bergen Anesthesia billed Young for the remainder.

Now Young is stuck with the charges. He has no income of his own.

Other recent examples include:

–At one hospital, the father of a 3-year-old who needed emergency stitches was surprised when the plastic surgeon billed him $2,000, on top of the $3,800 he received from the insurer. When the father took it up with a hospital executive, the executive said his options were limited because the plastic surgeon did not participate in any insurance plans. But he called the surgeon, who agreed to waive the rest of his fee after the child’s father paid $900 — his remaining deductible — toward the balance.

–Another couple chose a Bergen County hospital as their baby’s birthplace because it was in their insurer’s network. They were surprised to learn — when the bills came — that the anesthesiologist, surgeon and neonatologist at the hospital did not participate in their insurance plan. The plan, purchased through the Affordable Care Act on HealthCare.gov, provides no out-of-network coverage.

–In Hudson County, all three hospitals owned by for-profit CarePoint Health no longer participate in the network of the state’s largest insurer, Horizon Blue Cross Blue Shield of New Jersey. Hoboken University Medical Center was the last to opt out, as of Wednesday, when its contract ended. The three, including hospitals in Bayonne and Jersey City, are also out-of-network for Aetna, Cigna, Health Republic of New Jersey, Oscar Health Insurance and UnitedHealthcare. The vast majority of CarePoint’s patients enter through the facilities’ emergency rooms, which enables the hospitals to demand payment from insurers for their charges, among the highest in the nation, while leaving the patient’s obligation the same as it would have been at an in-network facility.

Ward Sanders, president of the state Association of Health Plans, condemned that business model on Thursday, when he renewed his industry’s call for legislative reforms. “New Jersey has become a hotbed for unconscionable out-of-network billing practices,” he said. “Certain facilities and providers … engage in predatory pricing, surprising consumers with unexpected bills, and creating exorbitant costs for consumers, employers and unions.”

“It’s time for the Legislature to step in,” he said.

Now that the logjam over Atlantic City has been broken, lawmakers say they are gearing up to try again on what Democrats and Republicans agree is a pocketbook issue. But recent developments affecting the state’s hospitals may make it more difficult. Legislation that could reduce hospital revenues or diminish their leverage with insurers will be seen as a problem, and lawmakers with hospitals in their districts are likely to hear about it.

Hospitals take a hit

The launch of the Omnia health plan by Horizon Blue Cross Blue Shield of New Jersey alienated half of the state’s 62 hospitals by labeling them as Tier 2, a non-preferred status expected to lead fewer patients to seek care at their facilities, and thus lower revenues. In addition, 30 non-profit hospitals face lawsuits — and the potential loss of their property-tax exemptions — after a precedent-setting state Tax Court decision and Governor Christie’s veto of legislation that would have protected them. And hospitals are fighting additional cuts in state charity care funding this year.

Nevertheless, Sen. Gerald Cardinale, a Demarest Republican and health professional himself — he’s a dentist — has begun circulating his own version of the “Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act” first introduced last year by three Assembly Democrats and the chairman of the Senate Health Committee, Sen. Joseph Vitale, D-Middlesex.

Cardinale’s version is somewhat friendlier to doctors and hospitals, because it would rely on peer review — one panel for doctors and one for hospitals — to settle disputes when insurers and out-of-network providers disagree over how much should be paid for a service. The original version relied on “baseball arbitration” — a choice of one side’s final offer — by outside professional arbitrators.

The Democratic sponsors of the measure that failed last session — Assemblyman Craig Coughlin of Middlesex, and Assemblymen Gary S. Schaer of Passaic and Troy Singleton of Burlington, along with Vitale — have met with interest groups and say they plan to meet again to see what changes might help the bill win passage. And Citizen Action, the consumer advocacy group, plans to call attention to the problem of surprise medical bills at an event in mid-June.

All aim to take the consumer out of the middle of such disputes.

And that’s a goal with which the state hospital association, which did not support the measure last year, can agree. It has suggested changes that would give hospitals a bigger role in preventing staff anesthesiologists and other hospital-based specialists from billing patients beyond their in-network financial obligation after the insurer has paid.

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Ultrasound at $59,490 Is Outrage in Aetna Claim Against Doctors

Here is recent news about doctors charging outrageous fees for some basic services. This is surely one of the reasons health care costs continues to rise. Consumers, please be sure to confirm what insurance your doctor accepts. If he or she is not in your plan’s network, inquire what the charge will be and find out what you may be responsible for in out-of-pocket costs. Medical Cost Advocate can assist you in negotiating your out-of-pocket costs. No one wants to be stuck with a $56,980 consultation fee.

by Peter Waldman

(Bloomberg) — Aetna Inc. is suing six New Jersey doctors over medical bills it calls “unconscionable,” including $56,980 for a bedside consultation and $59,490 for an ultrasound that typically costs $74.

The lawsuits could help determine what pricing limits insurers can impose on ”out-of-network” physicians who don’t have contracts with health plans that spell out how much a service or procedure can cost.

One defendant billed $30,000 for a Caesarean birth, and another raised his fee for seeing a critically ill patient in a hospital to $9,000 in 2008 from $500 the year before, the insurer alleges in the suits. The Caesarean price was more than 10 times the in-network amount Aetna quotes on its website.

“If these charges are accurate, consumers and purchasers should be outraged,” said David Lansky, president of the San Francisco-based Pacific Business Group on Health, a coalition of health-insurance buyers that includes Chevron Corp., Walt Disney Co. and General Electric Co.

Lawyers for the doctors declined to comment on specific charges in the suits, and said their clients did nothing wrong.

The insurance industry is grappling with how to respond to out-of-network hospital physicians who realize they have pricing muscle, according to Arthur Leibowitz, chief medical officer of Health Advocate Inc., a Plymouth Meeting, Pennsylvania, insurance adviser.

“These doctors can charge whatever they want,” Leibowitz said. “The challenge for the carriers is to come up with an agreeable, acceptable, unbiased judgment as to what a reasonable and customary reimbursement rate is.”

AMA Lawsuits

Aetna tried in 2007 to impose caps on some out-of-network payments, prompting doctor complaints to the New Jersey Department of Banking and Insurance. The agency sided with the doctors, fined the company $2.5 million, and ordered it to pay out-of-network practitioners enough so that patients wouldn’t be asked to pay balances other than co-pays.

In 2009, Aetna, UnitedHealth Group Inc., Cigna Corp. and WellPoint Inc. were accused by the New York attorney general of underpaying out-of-network physicians by manipulating a database used to calculate payments. They paid a total of $90 million in settlements without admitting wrongdoing. UnitedHealthcare agreed that year to pay $350 million to settle a lawsuit by the American Medical Association over the same issues. Similar AMA lawsuits against Aetna, Cigna and Wellpoint are pending.

Rare Glimpse

The Aetna lawsuits, filed in superior court in Camden, New Jersey, over the last eight months, allege the defendants violated New Jersey Board of Medical Examiners rules against excessive fees, and seek triple damages under state insurance- fraud laws against filing false or misleading claims.

The complaints provide a rare glimpse at the sums physicians earn from an insurer and the huge variations in what different doctors charge and receive for the same services.

Aetna reimbursed the defendants $8.3 million in 2009, up from $4.9 million in 2008, spokeswoman Cynthia Michener said, sometimes paying the full amount demanded and sometimes not. The insurer paid some of the large charges because of state regulations mandating timely payments and to prevent doctors from sending patients big bills, Michener said.

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