Obtaining healthcare services in the United States can oftentimes be a daunting, confusing, and outright expensive ordeal. The general public is largely unfamiliar with the convoluted industry and its niche economics; if there were an uncertainty index for the industry which traded on Wall Street based on the knowledge of the average patient consumer, it would be at an all-time high. This uncertainty and lack of information commonly results in the patient losing out financially and/or in terms of the quality and efficiency of medical care received from a healthcare provider. It is important to remember that the spirit of capitalism pervades nearly every sector of our economy, and healthcare is by no means an exception; if there is more profit to be made, people will go after it with little regard for fairness or the resulting consequences others involved may face.
A major issue which has impacted patient checkbooks and fueled emotional outcry nationwide is balance billing. When a patient receives medical care from a hospital, physician, or other healthcare provider who is out-of-network (not under contract) with the patient’s health plan, the patient will be “balance billed” for those billed charges in excess of his/her health plan’s maximum allowable amount. From the health plan’s perspective, the allowable charges are the only charges that exist, and all metrics of the benefits they provide to the patient are based off of those allowable charges only. Let’s say an out-of-network neurosurgeon’s billed charges for a spine procedure are $85,000, while the patient’s health plan has a maximum allowable amount of $40,000 for the same spine procedure. When calculating what it will pay, the health plan will start at $40,000, reduce it by any applicable copay, deductible, and coinsurance up to the out-of-pocket maximum due from the patient on that $40,000, and pay the rest. The $45,000 in excess of the maximum allowable amount, if balance billed, will become the patient’s liability.
There is a lot of controversy about healthcare providers remaining out-of-network and balance billing patients; while some providers’ reasons for staying out-of-network come with noble intentions, others’ reasons are muddled with greed and arrogance. Solo physicians or small multi-physician clinics may very well have tried to contract with your health plan in the past but backed out due to unfair terms and rates being offered them simply because they had limited leverage and negotiating power. In another scenario, an out-of-network hospital may have no intention of contracting with your health plan because they bill charges at several multiples of what may be adequate and/or acceptable pushing your health plan to part with a large sum of money; they don’t care about balance billing you or may have even told you that they will waive the excess billable charges or write them off (this waiver/write off may actually constitute insurance fraud). My purpose here is not to get into these intricacies but rather provide some thoughts on how patient consumers can be proactive in this environment to protect themselves financially.
So you may ask, how do I stay safe? Here’s a simple way to approach it by going through 3 steps any time you need medical care:
- Ask yourself: For the healthcare service I need, is there an in-network provider available who will provide the same level of medical care (quality and efficiency) as the out-of-network provider I’m considering? If yes, it’s probably a good idea to go to the in-network provider. If no, go to the next bullet point.
- How much will the out-of-network provider balance bill me? Get an estimate up front and if it’s a fair amount that you’re willing to pay, it’s probably best to go with the out-of-network provider. If not, you have two options: a) Choose an in-network provider that provides the same service at a lower level of care or b) go with the out-of-network provider and eat the unfair cost (at least you know about it up front so you can plan for it). You have to weigh the extra cost of the out-of-network provider against the lower quality of the in-network provider. If there is no in-network provider that offers the medical care you need (this is very rare), then going with the out-of-network provider and eating the unfair cost may be your only option. Lastly, if the situation is an emergency and you may not be able to avoid out-of-network care, go to the final bullet point.
- In an emergency situation, if it’s possible try to request up front that you only want treatment from in-network providers so long as it does not compromise the quality or efficiency of care your receive. If this doesn’t work out and you get stuck with an outrageous balance bill, there are still options available to you. First, do some research to see if your health plan paid an inadequate or inaccurate amount for the service you received and if so, try to get them to pay more to make it right. If your health plan paid a fair and correct amount, the next step is to negotiate directly or through a mediator with the healthcare provider to lower your bill to an acceptable amount. If this does not work, then you can file complaints with national and/or state agencies which may support your cause and hope they will leverage their influence to help you. Legal action may or may not be an option.
The healthcare industry in this country as a whole is truly an enigma; even though I’ve had extensive exposure to it in my life, I still have a limited understanding of the big picture. In general, I feel there are two major drivers on the healthcare provider racetrack: self-interest/profit and patient care. In some situations the two are mutually exclusive while in others they are not or actually contribute to one another (for example if a hospital facility is highly profitable, they will spend extra dollars to provide exceptional medical facilities and treatment for their patients). It’s up to the patient consumer to research and figure out where and how to best invest their money for the most favorable outcome in their health.