What Are - Out of Network Surprise Billings?

by Jane Ashley

You may have heard some stories about out-of-network billings performed at in-network hospitals — sometimes, these are called “SURPRISE” billings because you weren’t expecting to get a bill that wouldn’t be covered, or only partially-covered, because you had your surgery, procedure, or test performed at an in-network facility.

Understand Your Insurance

What is an out-of-network billing?

According to HealthInsurance.org, an out-of-network bill is from a physician, hospital, or another facility (like an imaging facility) that has not signed a contract with your insurance company agreeing to negotiated prices.

Depending on which type of health insurance you have, your insurance may not cover any of the charges or just part of the costs — leaving you to pay the balance.

In the past, patients could quickly check on their insurer’s website to determine if a provider was “in-network” to avoid having to pay out-of-network charges. However, changes in the healthcare field have created an unforeseen problem for patients, known as “surprise out-of-network” billings.

What are “surprise out-of-network” billings?

Patients sometimes receive an ugly surprise in the form of a bill from an out-of-network provider who furnishes service at an in-network facility. Examples of this include:

• Anesthesiologist at an in-network hospital where your surgery is performed
• Radiologist who reads your imaging scans at an in-network imaging facility
• Pathologist who does your tissue biopsy performed at an in-network hospital
• Emergency room physician at your in-network hospital
• Surgical assistant for a surgery performed at an in-network hospital

Patients often have no way of knowing whether these “behind-the-scenes” providers are in-network when they are performed in an “in-network” facility.

The most common medical situations that are likely to produce surprise billings are:

• Over 16% of emergency rooms (surprise bill from an emergency medicine specialist)
• About 13% of lab or pathology bills from an out-of-network pathologist
• Over 20% of surgeries generate an out-of-network statement, generally from an anesthesiologist or surgical assistant

The “out-of-network” provider bills your insurance company. Your insurance company pays the “out-of-network” amount (as specified in your Explanation of Benefits). Then you receive a bill for the balance.

Your Hospital In Network

What is balance billing?

Balance billing is where the provider sends you a bill for the difference between what the insurance company paid and the amount that the provider billed.

“In-network” providers agree to the amount that the insurance company pays plus the copay amount that the patient pays as payment in full. “In-network” providers write off the remaining amount as part of their contractual agreement as an “in-network” provider.
“Out-of-network” providers don’t have that contractual agreement and bill the patient for the remainder of the bill.

There are times when a patient wants to go to a particular facility or doctor that they know is “out-of-network” — say for a second opinion in regards to their cancer diagnosis. In this case, the patient knows upfront that they will be facing a higher out-of-pocket cost and are willing to absorb that cost.

The rub comes when unsuspecting patients utilize an in-network facility and later receive a surprise bill from an “out-of-network” provider. Balance billing can result in an obligation of thousands of dollars without any limit on out-of-pocket limits. As an additional insult to injury, “out-of-network” payments don’t count towards your maximum out-of-pocket amount.

Er Doctor

Why are these services considered out-of-network?

You may be wondering why someone who is working at the facility would be out-of-network. It is not uncommon for healthcare professionals to be independent contractors. Yes, that’s right. Some physicians are independent contractors rather than paid employees. The use of independent contractors began with emergency room physicians but has now extended also to include radiologists, anesthesiologists, pathologists, and hospitalists. These independent contractors may or not be “in-network.” Urgent care facilities also use independent contractors to provide staffing for their extended hours of operation.

What can patients do?

There’s very little that patients can do for many of these circumstances. However, the medical community as a whole and Congress can do something to help eliminate surprise billings.

1. The surgical community should work together to eliminate “surprise” billings. Patients generally choose their surgeon according to their reputations — surgeons need to become proactive to ensure that their team members, i.e., their surgical assistants, accept the same insurances to eliminate surprise billings.

2. Hospitals need to provide accurate estimates of a patient’s expected out-of-pocket expenses, including those expenses from independent contractors. Full disclosure is essential to prevent stress and anxiety from unexpected billings after surgery or unplanned hospitalization.

3. Congress needs to step up to the plate and pass comprehensive legislation to prevent surprise billings. Last year, the Senate proposed a bill called the Lower HealthCare Costs Act, and Congress introduced the No Surprises Act, which would allow patients to only be responsible for in-network costs when “out-of-network” charges are incurred at “in-network” facilities unless a patient gives informed consent. Sadly, there was opposition from some physician groups (particularly those backed by private equity funds), and the legislation did not pass.

While physicians and medical facilities need to be compensated sufficient amounts for remaining viable and investing in the future, patients’ interests should always be at the forefront of policies regarding “out-of-network” surprise billing.

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