Unbalanced Billing

Even as the healthcare reform legislation is hitting new and perhaps fatal roadblocks (the election of a Republican to fill the Senate seat vacated by Ted Kennedy ended the Democrats’ “filibuster-proof”60 seat majority), there are some issues that seem to have been resolved in insurance company’s best interests under any iteration of the proposed act. In recent blogs, I’ve already noted how the pharmaceutical industry protected itself against serious competition and price cuts by making sure that Americans cannot legally import safe prescription drugs from Europe or Canada at much lower prices. Today, I’d like to address one particular issue, one that factors into a very large number of “medical bankruptcies” – where critical care decimates the bank accounts of those facing an emergency – even for people who have health insurance.

The issue is known as “‘balance billing,’ which occurs when doctors, hospitals or medical labs bill their patients the difference between what they charge and what insurers pay for their services. It comes into play when patients use providers who aren't part of their insurers’ networks and thus haven't agreed to prearranged payment rates.” The January 18^th Washington Post.

The practice might be justifiable in situations where a patient voluntarily steps “out-of-plan” to access a particular doctor for whatever reason, but it is much more difficult to justify where an extreme or very rare medical condition necessitates a specialist who is not “in plan” or, even worse, where “out-of-plan” care was administered without the patient’s knowledge or consent – what might happen after an accident or heart attack where an unconscious patient is simply taken to the emergency room of a hospital that is not “in plan” and perhaps even admitted to the hospital and operated upon without ever having made a conscious choice. Often, folks who opt for out-of-plan care can at least negotiate with the outside physician or hospital for a better rate; unconscious patients obvioulsy do not have that option.

The former case – access to a specialist – is a very sticky issue because some choice is being exercised by the patient (or the patient’s guardian). But in circumstances where effective treatment is truly available only out-of-plan, but there are doctors that are generally available in that medical practice specialty in plan, insurance companies most often require in plan treatment. In the latter case – involuntary care – it is difficult to see any justification for making the patient pay the higher rate.

How do the current House and Senate versions of the reform proposals deal with the issue? “Congressional aides say there's no need to limit the practice, because the pending legislation would require insurers to have enough specialists to ensure patients could get care within their insurers' networks. Both bills cap out-of-pocket costs for patients seeing in-network providers, and the House version recognizes the financial threat from out-of-network costs by counting a portion of out-of-network costs toward the cap.” Great theory, but hardly the real world. Take for example a medical practitioner who may have had a rare occasion to treat a particular ailment who is in plan, but the truly specialist with substantial and effective experience in the field who is not a part of that plan. Technically, the insurance company may have an argument that they have that base covered, but how would you feel if your life or the life of a family member hung in the balance? Some states (e.g., Maryland, which set its own rates, Colorado, etc.) have reacted by banning the balance billing practice for emergency care. But this is most certainly not a generally accepted rule, and the practice regarding specialists is far more complex.

The above Washington Post provides an example of a newborn whose defective heart carried a very low survival rate, but where an out-of-plan surgeon (with no true comparable counterpart in plan) had had a great deal of success with that particular defect. The insurance carrier, Anthem Blue Cross and Blue Cross in Virginia, only agreed to pay what their internal rate for that kind of surgery would have been (i.e., they approved the out-of-plan surgery, but only at their rate – although there was confusion as to whether or not this was adequately explained to the policy-holders), and denied the rest, a very significant sum of $85,000 for two related surgeries. The Post: “Company spokesman Scott Golden defended Anthem's decisions. ‘To keep health care costs from rising faster than they already are, we cannot pay doctors who refuse to participate in our network amounts far greater than that paid to doctors who have agreed to provide services to our members for a reasonable fee,’ he said in a written response to a reporter's questions. ‘Doing so would only encourage doctors to drop out of our networks and balance bill all members.’”

In the end, we still have the most expensive medical care on earth, with costs rising beyond our aggregate ability to pay. There are serious issues that still need to be addressed, and whether healthcare reform succeeds in the current Congress or not, sooner or later, this country is going to have to face the reality of a healthcare system that the nation can no longer afford to pay for… assuming that event has not already occurred.

I’m Peter Dekom, and I am deeply concerned.