Here’s Why Millions of Americans Face Surprise Medical Bills

Source: iStock

Source: iStock

If it wasn’t frustrating enough that health care prices vary drastically, medical bills are incredibly confusing to the average patient, and doctors accept gifts from pharmaceutical companies, here’s some more bad news about the American health care system. A survey by the Consumer Reports National Research Center, released in May 2015, found that nearly one-third of privately insured Americans have been hit with surprise medical bills in the last two years.

Consumer Reports defines these surprise medical bills as bills in which a patient’s health plan paid less than expected. The most common elements of these surprise bills were services that were never delivered, higher-than-expected patient costs, and out-of network rates, according to Betsy Imholz of Consumers Union (the policy and advocacy arm of Consumer Reports). The report cited one insured patient who needed an epidural and ended up being billed $3,000 for an out-of-network anesthesiologist. She was at an in-network hospital, but it turns out there were no in-network anesthesiologists at the facility.

The Affordable Care Act mandates that patients incur no out-of-pocket costs for certain preventive care services, yet many patients are surprised when certain services or associated fees aren’t covered. Mona Shah of the American Cancer Society Cancer Action Network told Kaiser Health News it’s often a problem with how the procedure is coded for billing purposes. As a result, sometimes patients will get charged for related services like anesthesia or facility fees for preventive care procedures. “We’re trying to get [the Department of Health and Human Services] to release guidance that says prevention should cover all related services,” she explained.

Source: Thinkstock

Source: Thinkstock

The Consumer Reports survey sheds light on loopholes in the health insurance system that perpetuate unexpected medical bills and “put consumers in the middle of a reimbursement battle between their insurance providers and out-of-network doctors.” According to the report, one of the major factors is “balance billing,” which refers to your doctor’s ability to bill you for the balance remaining after your insurance pays its part, which frequently occurs when you receive out-of-network services.

The problem is, the onus is on patients to dispute mistakes or unexpected charges on their medical bills, and most have no idea who to contact.

Imholz said “almost zero” people who receive surprise bills ever file a complaint with a state agency. And in the survey of over 2,000 people, 53% of those with surprise medical bills reported the issue was either not resolved as they liked or not resolved at all, 57% ultimately paid the bill in full, and 87% did not know which agency or department in their state government they should turn to with complaints about health insurance.

Consumers Union launched an online insurance complaint tool to help consumers fight back against unexpected or erroneous medical bills. The organization also wants to help prevent surprise bills from happening in the first place, so it’s working with several states to strengthen protections against unexpected medical billing.

A recent Wall Street Journal article outlines strategies for patients to use to avoid being hit with surprise medical bills, such as checking with the insurer, doctor, and hospital about costs in anticipation of planned procedures. Of course, many medical providers will refuse to give upfront estimates, but as more patients are requesting pricing information in advance, a growing number of doctors, hospitals, and insurers are providing cost projections.

Because of common billing code issues associated with preventive care, the Journal’s guide also recommends requesting the actual preventive codes the insurers accepts ahead of time. And when patients are billed for preventive care, simply calling the physician or hospital might solve the problem, as some providers are willing to correct the mistake or even forgive the payment.

If you are having trouble understanding your medical bill, try contacting a non-profit organization like the Patient Advocate Foundation.

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