Surprise Medical Bills May Become a Thing of the Past

Freya (80) had chest pains, a hacking cough, and a high fever when she was visiting her son, Andy. An ambulance was called and she was rushed to a hospital in her health plan’s network. As she headed home after a week’s stay to continue her recovery, she took a measure of comfort that her Medicare Advantage plan would take care of most of her hospital bills.

Boy was she surprised! Not long after returning home, bills started piling up, including a notice in the mail from an ambulance company, medical lab, and a specialist who took part in her treatment. The hospital was in her health plan’s network, but the other services were not, so she was stuck paying parts of their bills. Freya, and others like her who have private insurance and Medicare advantage, want this practice to stop, but federal legislation has gone nowhere so far, until now!

Unexpected Medical Bills are More Common Than You Might Think

According to a recent study by the Health Care Cost Institute that analyzed claims data from nearly 620,000 hospital admissions, 1 in 7 patients using an in-network hospital were still billed by an out-of-network medical provider, a practice known as “balance billing.” Anesthesiology, emergency treatment, and lab services were among the most common causes of these unexpected bills.

The average “surprise amount” in such cases is roughly $1,500, according to Mark Hall, a professor of law and public health at the Wake Forest University School of Law, who has written extensively on balance billing. But the amount you are balance billed can reach into the tens of thousands of dollars, says Karen Pollitz, a senior fellow at the Kaiser Family Foundation, which focuses on health care issues.

Balance Billing Can Happen to Medicare Advantage Recipients

Balance bills are primarily an issue for people with private insurance but can also happen to those with Medicare Advantage Plans, similar to Freya in our example. Here’s how: Medicare does not have set networks of physicians and facilities. In other words, you can see any practitioner who provides Medicare-covered services, and the majority of those providers have agreed to accept Medicare’s rates for those services. But, this is only if you rely on Medicare Parts A and B, also known as original Medicare. If you also have a Medigap plan (also called Medicare supplement plans) provided by a private insurer, you may be subject to that plan’s network limits, which could result in surprise bills. Here are some facts you should know:

Balance bills are often associated with emergency treatment. If you are seriously injured or ill, a first responder or family member is likely to take you to the nearest emergency room (ER), regardless of whether it is in your network. Even if the facility is in network, the doctors you see might not be. Nearly two-thirds of ER physicians at U.S. hospitals are outsourced, and those out-of-network doctors might bill you at their own rates.

In nonemergency situations, you can choose treatment at an in-network hospital but still be billed by an out-of-network provider who works there.

In some cases, you may never meet the out-of-network doctors. They may just look at your slides or films, or your blood work might be sent to an out-of-network lab. In other cases, you could be referred to a clinic or practice affiliated with the hospital and be charged a “facility fee.”

Besides balanced billing, there are other reasons you might receive a surprise bill:

• Observation Status rather than being admitted: When patients are too sick to go home but not sick enough to be admitted, observation care gives doctors time to figure out what’s wrong. It is considered an outpatient service, similar to a doctor’s visit. Observation patients pay a share of the cost of each test, treatment, or other services, which could add up to thousands of dollars not covered by Medicare. Patients may be confused and assume that they were admitted, when they were in fact under observation care, and in many cases, could receive a hefty bill for their care. Hospitals are supposed to tell you if you were admitted or under observation status. If you don’t know, be sure to ask! Read more about this in our various articles on this subject.

Out-of-pocket costs: Experts estimate that 25% of Americans who carry health insurance are actually underinsured because of coverage gaps and out-of-pocket expenses, according to a 2019 Commonwealth Fund report. Carefully check your explanation of benefits (EOB), the statement you get from your insurer that breaks down what it pays and what you pay for recent treatment. And be aware that even if you don’t change plans, your deductible, copays, and coinsurance might change from year to year.

Billing errors: Every medical procedure has a five-digit Current Procedural Terminology (CPT) code, which providers list on bills and insurance claims. (Medicare has a similar system called the Healthcare Common Procedure Coding System, or HCPCS.) Costly errors may be buried in page after page of specialized terms and complex codes. Unfortunately, analyzing a bill line item by line item is really difficult for a patient to do. A 2018 Consumer Reports survey of insured adults who’d incurred major medical expenses found that more than 33% had paid a bill they weren’t sure they owed, in part due to confusion over the charges. There are individuals and companies who specialize in reviewing medical bills for coding errors, and we have a couple listed on our website under our Trusted Referrals page — https://www.farrlawfirm.com/resources/trusted-referrals/

Billing fraud: Most medical billing errors are just mistakes, but outright phony charging does occur. According to the National Health Care Anti-Fraud Association and billing experts, common types of billing fraud include billing for procedures or services that were not performed or that were performed but were not medically necessary; double billing for a procedure that was done once; billing for a more expensive service than was performed; billing a patient for more than the copay amount; and boosting charges by billing individually for related services that are commonly billed with a single code, such as cleaning, stitching, and dressing a wound.

Medical identity theft: This occurs when someone obtains your health care information — for example, a Medicare, Medicaid, or health insurance number — and uses it to see a doctor, get prescription drugs, file insurance claims, or get other care. Indications that you’ve been a victim of medical identity theft can include a bill for medical services you didn’t receive; office visits or treatment you don’t recognize; collection notices on your credit report for medical expenses you didn’t incur; and/or notice from your insurer that you have reached your benefit limit.

Key House and Senate Health Leaders Reach Deal to Stop Surprise Medical Bills

House and Senate health care leaders in both parties reached a deal on Sunday, Dec. 8, on legislation to protect patients from surprise medical bills. The legislation would protect patients from getting hit with massive bills when they go to the emergency room and one of the doctors caring for them happens to be outside their insurance network.

The deal between House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.), Rep. Greg Walden (R-Ore.), the top Republican on that panel, and Senate Health Committee Chairman Lamar Alexander (R-Tenn.) is a step forward for the effort, which is seen as a rare area of possible bipartisan action this year. According to Anderson, “I do not think it is possible to write a bill that has broader agreement than this among Senate and House Democrats and Republicans on Americans’ number one financial concern: what they pay out of their own pockets for health care.”

The deal also includes other health care measures, such as an extension of funding for community health centers, raising the purchasing age for tobacco to 21, and drug pricing transparency measures.

Backers of the deal are hoping to include it in a must-pass government funding deal that faces a Dec. 20 deadline.

“As our discussions continue around the final details, we are encouraged that we’re one step closer to giving patients these vital protections,” the senators said. “Patients have waited long enough, and we remain hopeful that we can get this done by the end of the year.”

Plan Now for Long-Term Care

If you have a loved one who has been hospitalized often, it may be time to consider long-term care options. Did you know that long-term care costs $12,000 – $14,000 a month in the Metro DC area?
To protect your family’s assets from these high costs, the best time to create your own long-term care strategy is now. Generally, the earlier someone plans for long-term care needs, the better. But it is never too late to begin the process of Long-term Care Planning, also called Lifecare Planning and Medicaid Asset Protection Planning.

If you have a family member nearing the need for long-term care or already getting long-term care or if you have not done Long-Term Care Planning, please call us as soon as possible to make an appointment for a no-cost consultation:

Elder Law Fairfax: 703-691-1888
Elder Law Fredericksburg: 540-479-1435
Elder Law Rockville: 301-519-8041
Elder Law DC: 202-587-2797

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