Updated at 5:03 p.m. Thursday April 4
Lawmakers are again trying to address a practice known as surprise billing. It occurs when a patient goes to an in-network hospital but at some point treated by a doctor who is not a part of the insurer's network. The patient is then billed separately from the out-of-network provider.
To even the savviest health care consumer, it can be almost impossible to prepare for this situation.
The legislation introduced by Sen. Ralph Hise and Sen. Joyce Krawiec, both Republicans, would expand current protections for consumers by requiring hospitals and other health facilities to tell a patient if they may be seen by an out-of-network provider. It would also set limits on how much these out-of-network doctors could bill patients.
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Current state law protects patients from surprise medical bills in emergency situations. The bills still get sent, but patients don’t pick up the tab, insurers do. The state’s largest insurer Blue Cross Blue Shield of North Carolina said it pays about $14 million in these types of bills a year. Consumers who get these bills can call the state insurance department for help if they end up with this type of bill.
Senior Deputy Commissioner Kathy Shortt said the North Carolina Department of Insurance doesn’t get too many of these complaints, “It’s just not something we see a lot of for the emergency services.”
She acknowledges that not all consumers who get these bills after getting emergency care realize they can call the insurance department for help.
In 2018 the department consumer services division received 3,598 complaints related to life and health insurance. Of those 42 were related to problems with emergency services. The department says 10 of those were valid. The department got more complaints about out-of-network insurance issues. A total of 136, of which the department says 11 were valid.
And these surprise bills also happen when a patient is getting non-emergency care. Senior analyst at the insurance department Hadiya Swann hears those complaints.
“They are normally not complaints for like $5,000. These are for, like, $30,000,” she said. “They are [for] large amounts.”
That is why Swann thinks the notification part of this law could be important for patients. But Brendan Riley, a policy analyst with the North Carolina Justice Center, said just telling patients they may get hit with a bill when they come in for care doesn’t solve the problem.
“We don’t purchase health care the way we purchase goods,” Riley said. “A number of proposals to address the surprise billing problem focus on trying to provide more education and more information to the consumer — the patient — at the time of service or before a service.”
He said it’s unreasonable to think at the point of care patients will be able to make a decision based on finances. The North Carolina bill has a notification requirement like this, but the other component puts limits on how much out-of-network providers could bill patients.
Loren Adler is with the USC-Brookings Schaeffer Initiative for Health Policy. He’s been tracking state legislation across the country. He says the billing limit addresses the root of the problem.
“The bill in North Carolina that I saw is probably the best bill I’ve seen from a state to date,” Adler said. “It certainly takes the most holistic approach to tackling the issue and actually tries to get the underlying cost dynamics involved in this issue.”
Adler said this would no longer incentivize doctors to remain out of network because they couldn’t bill as much. Blue Cross Blue Shield of North Carolina said these bills, often from anesthesiologists or emergency medicine doctors, average 10 times the Medicare rate. This bill would set a limit at the Medicare rate.
The North Carolina Medical Society, which represents doctors, is not happy about this part of the law. A spokeswoman wrote in a statement “That provision is tantamount to state-mandated price fixing. In negotiations with insurance companies, it would tilt the negotiating power in favor of the insurance plans.”
Which makes it unsurprising that Blue Cross CEO Patrick Conway supports this bill. He said, “This is a commonsense, patient-first proposal that would protect people’s financial interest when they get care from an in-network hospital or emergency room.”
A similar bill was introduced in 2017, but it never got out of committee.
There’s a patchwork of laws around the country. Nine states — including California, Connecticut, Illinois, and Florida — have comprehensive laws according to an analysis by Georgetown University researchers. They categorize laws as comprehensive if they protect consumers from surprise bills in all types of insurance arrangements, and in emergency and non-emergency situations. They also categorize laws as comprehensive if there are rules to determine how much insurers pay providers or a way for the two parties to resolve the bill without putting the consumer in the middle.
Legislation is also being considered on the federal level.
But even the most comprehensive state laws don’t protect everyone. There are a couple different ways companies insure employees. One is the self-funding model, which is when companies pay for some or all of the health services themselves. That's different from companies that buy insurance for their employees. The self-funded companies are subject to federal insurance regulations, not state rules. The Kaiser Family Foundation estimates that represents about 60 percent of privately insured employees across the country.
