Mamma Said Knock Me Out (But, first, make sure you are in-network)

This week the California assembly passed a bill AB72 that addresses the problem of surprise medical bills.  It awaits the signature of Jerry Brown.  Its goal is to prevent excessive bills from out of network doctors.  It limits the allowable charges for such OON doctors to the average insurer's contract rate or 125% of the Medicare rate, whichever is higher.  Most importantly, it prevents the OON doctor from balance billing for the difference between their rate and the aforementioned limit.

This new law is great, then, right?  Not necessarily.  It can actually deincentivize insurers from negotiating rates if the doctor's rates become controlled by legislation.  That leaves the rates for this part of the health scare system still unregulated.  The result is that these doctors would raise their rates in order to compensate for the lower reimbursements dictated by law.  Who suffers?  The under or uninsured.

What are surprise bills?  The most common example of a surprise, OON bill is for anesthesiologists.  My family has had perhaps a dozen or two procedures over the years requiring general anesthesia.  In every instance, the anesthesiologists were OON even though the hospital and the surgeon were in-network.

Similarly, ER physicians are almost never in network even if an ER facility is.

This has resulted in some very large bills for me because the doctor charges whatever they want and is not bound by any contracted rate with an insurer.  In an emergent situation, an insurer is obligated to process the doctor's bills as in-network and their full amount.  But there's a catch.

If the doctor charges $1000 and the in network contracted rate is $500.  The insurance company will pay 80% of $500 (or whatever percentage is in your plan).  That's $400.  Normally, if the doctor was in network, the patient would be responsible for paying $100.  However, the doctor is allowed to balance bill for the $500 that exceeded the insurer's contracted rate.  So now the patient owes $600!  (Note:  there are restrictions for balance billing in some HMO plans.)

With anesthesiologists, sometimes they will honor the contracted rate and not balance bill the patient.  That has happened about 75% of the time with my family's procedures.  When it doesn't happen, then the patient gets hit with a large bill like above.

So you say, "Just make sure that the ER doctors and anesthesiologists are in network?"  Trust me, that's practically impossible.  I've tried to do this for the local ERs and gave up when no one could help.  For gas-passers, you never know who it is going to be until just prior to surgery.  Surgeons definitely do not like the patient demanding a new anesthesiologist minutes before a surgery.  In fact, they would likely cancel the procedure in such a situation.

Something has to be done about balance billing.  Those bills are a primary cause of medical debt and bankruptcy.  AB 72 is a great start.  However, it is still incomplete and will certainly be challenged in the courts for rate fixing.   I hope that Jerry Brown signs it and we can begin the process to solve this large problem.

$7000 CAT Scan (What would Einstein and Franklin do about it?)

"It is the first responsibility of every citizen to question authority"  (Benjamin Franklin)

"The important thing is to never stop questioning.  (Albert Einstein)

This month I received a bill for an ER visit to my local hospital.  The billed charges for the facility (not doctor fees) were $14,876.59 and the amount that I owed was $2082.72! Though I never received an EOB ("explanation of benefits") from Anthem for this, it certainly looked like the insurance company had paid down this bill somehow leaving me with only a measly $2000+ co-insurance amount due.

(Spoiler Alert:  the actual amount that I owed end up being $0.00!)

After recovering from the sticker shock and shot of scotch, I started to think a bit more clearly. Here's what I did:

1)  I called the hospital's billing department and requested a detailed, itemized list of all the charges.  I had to see how a two-hour ER visit ended up costing over $14k considering the fact that we left without needing any treatment or medicine.   

2)  After receiving the itemized bill, I verified that all of the services were actually rendered.  I also noticed that they charged $7000 for a CAT scan (which costs only $550 at our local radiology facility).  They also charged $900 to administer an EKG which took about only 1 minute.  The basic charge for simply stepping into the ER was $2352.  I actually don't find that charge to be so unreasonable. 

3)  Next, I went online to Anthem to find the EOB and see how Anthem had processed this claim since I suspected that something was amiss.  I couldn't find the EOB which is unusual. Anthem's patient portal is pretty good (albeit very, very slow) and it's usually easy to find an EOB. 

4)  So, I called Anthem figuring that maybe the EOB got stuck somewhere and they could look it up.  Guess what?  They couldn't find a claim submitted by the hospital for this DOS at all.    "OK, Anthem, I'll call the billing department at the hospital and see what's what." 

5)  I asked the billing department to explain to me how the $14,876 was paid and reduced so that my co-insurance became $2000.  "I see here that your insurance company is xxxxxx.  Is that right?"  "Huh?  I've heard of that company. My insurance is with Anthem." 

The hospital had never even submitted this claim to Anthem.  Further, it is a complete mystery how the hospital had the correct insurance information to process the doctor's fees but complete bungled their facility bill.  It's also a mystery as to how this unknown insurance company could have discounted or paid anything towards these charges.

I gave them my Anthem information and they will submit the claim.   Once they do, the claim will be paid at 100% because my wife had already reached her annual out of pocket (OOP) maximum before this ER visit.

This means that the $2082.72 bill is going to go down to... $0.00.  Yeah!

Key Takeaways:

1.  Never trust that the amount that a provider says you owe is actually the amount you really owe.  Always read and question every bill.  (See the above quotes from Einstein and Franklin.)

2.  Always read your EOB.  If you don't have it, get it.  Then read it.  If you don't understand it, make your insurance explain it clearly or find someone who can.

3.   Realize that billing mistakes occur every day.  Perhaps your bill is accurate.  But chances are good that a bill that seems too high has mistakes in it.  If it walks like a duck...

P.S. - I am not certain what would have been the amount I owed if my wife had not met her OOP maximum.   I estimate that it would have been about $1000 which is still a sizable savings from the original billed amount.