Let me ask you a hypothetical question. Would you rather:
- Pay a $500 bill that you were totally expecting, or
- Pay a $300 bill that was a total surprise?
As the person who keeps track of bills and payments due for my family, I say there is NOTHING worse than a bill you weren’t expecting. No matter how much I owe, if I know about it up front, I can plan, estimate, maneuver, borrow or do whatever I have to do to pay that bill on time.
If I get ambushed, though… Grrrrr!!!! Don’t like it. Much more stressful.
Turns out that millions of our friends and neighbors, even ones who have high-quality health insurance, are getting ambushed with surprise bills from medical providers every day. Typically, this happens because they get care at an in-network hospital or clinic, but while there, get treated by a doctor or other provider, or have lab work done that’s out of network. The majority of the time, these bills are complete surprises and hit you weeks after you got care. Without any notice at all, without you being able to say “no.”
Well, Mike, how many of these surprise bills could there really be?
The latest research on this just blew my head off.
Kaiser Family Foundation says that 18.5% of all ER visits result in an unapproved or surprise medical bill. According to the federal Centers for Disease Control and Prevention (CDC), we as a nation had 145.6 MILLION ER visits last year.
So, let’s see… 145,600,000 x 0.185 = 26,936,000 bills — JUST FROM Emergency Rooms!
But that’s not all…
The Journal of the American Medical Association (JAMA) just finished a huge study that suggested 20.5% of ALL SURGERIES resulted in surprise bills. The good old CDC also points out that 48.3 MILLION surgeries were performed in the U.S. last year.
So, 48,300,000 x 0.205 = 9,901,500 MORE surprise bills in a typical year.
Is this unexpected billing by out-of-network providers a big problem? I’d say nearly 37 MILLION surprise bills per year, JUST from surgery and ER visits, is pretty big. Think about that.
That’s 37 million times a year Americans get a bill from a healthcare provider that they did not know was coming, for charges from providers they most likely didn’t KNOW were out of their networks because they got treated at an in-network facility or clinic. Thirty-seven million times in one year.
Is anybody doing anything about these unexpected or unapproved bills?
Following the example of state legislators in California and New York, the U.S. Congress is considering a couple of bills on this topic. It’s good that they are trying to protect consumers, but, as usual, Washington, D.C., can make things better for you or a LOT worse. There are two different approaches being considered.
The one that will have the lowest effects on your health insurance premiums is called “benchmarking.” It’s already in practice in California. The idea here is that when an out-of-network provider bills you unexpectedly, your insurance company pays that provider a previously agreed-upon percentage of what Medicare would have paid for your treatment OR pays the provider an average rate based on similar in-network providers in that area.
The beauty of this approach is that it can be totally automated, and these claims processed for a few pennies each. That’s critical, since we are talking about nearly 40 million events per year. This approach in California is working very well and has protected hundreds of thousands of consumers already. Not that the providers are happy about it. They would prefer a different solution.
The other proposed solution is “arbitration,” a fancy word that means a dispute is decided by an agency or lawyers or other involved parties. This is the method New York is using to resolve surprise billing, and significant cost increases have resulted.
Those increases are pushing up health insurance rates in New York. The average arbitration event has an administration fee of $400 per event. But providers who refuse to join insurance company networks get higher medical payments in arbitration, two or three times the in-network rate. That double whammy not only removes the incentive for providers to participate in affordable healthcare networks, it can really move your premiums upward.
Which solution protects you, the patient?
Naturally, providers are lobbying hard in D.C. to avoid benchmarking. They can make a lot more money from you and your insurance company via arbitration.
The problem is, with arbitrations, just the overhead costs to PROCESS them are staggering. Can you imagine? Nearly 40 million events per year at $400 each — that’s nearly $15 BILLION a year added to your health insurance premiums BEFORE insurers even pay the medical bill that the out-of-network provider generated? That’s just the OVERHEAD cost of the process!!
To get their way on this issue in Washington, several provider lobbying groups are funding huge amounts of advertising. I’ve heard a few of these ads, and they are embarrassing in their misrepresentation of the issue. These providers and facilities are essentially defending their right to bill you without your permission. How’s that make sense?
And this is no longer just a national problem. Louisiana’s legislature will be presented with “surprise billing” legislation this session. And guess which method the provider community will be pushing? To make it more interesting, the FEDERAL Bills being considered actually DEFER to state bills where they exist! In fact, the state of Georgia just passed surprise billing legislation that was written and passed by doctors in the legislature. On its surface, the bill looks like it lowers your out-of-pocket costs, but you and many other people will end up paying those surprise bill when they are turned into higher premiums. Very closely mirroring the New York model, I expect health insurance premiums in Georgia to start heading northward very soon. Bad news for you, my Straight Talk friends.
Straight Talk is, if we end up with a national or state-based ARBITRATION solution to surprise billing, we are essentially allowing the people who created this problem to solve it to their advantage and pass all the costs onto you via higher insurance premiums.
If you decide to contact your Congressional or State representatives about this issue, tell them you want BENCHMARKING, not ARBITRATION. That’s the best way to stop a quick rise in your health insurance premiums and potentially resolve the issue of the unexpected or unapproved surprise medical billing.