by Adela Flores-Brennan, Executive Director

A couple of months ago, a friend mentioned that she had just gotten a bill from a medical lab that was a great deal higher than she expected. She thought she had done everything right: spoken to her insurance company to verify the test was covered, and gone to an in-network provider. However, a few weeks later an unexpected bill for over $1,500 showed up in the mail. As it turns out, even though she had gone to her in-network physician for a blood test that was fully covered, that test had gone to an out-of-network lab for analysis. Ultimately, my friend successfully appealed to her insurance plan that she should be charged the in-network rate for the test, but this situation exemplifies that patients can often get caught off guard by more (bills) than they bargained for, even when they think they’re playing by the rules.

There are a number of proposed solutions to surprise billing. Recently, the President of the United States put forward ideas to address surprise billing in his “Fiscal Year 2017 U.S. Department of Health and Human Services” budget. The policy proposal would address surprise out-of-network bills for privately insured patients seeking care at in-network hospitals by requiring hospitals to match patients with in-network providers practicing in the facility and by requiring providers who regularly practice at the facility to accept in-network rates.

Colorado has some protections already in place that are designed to hold some consumers harmless from surprise billing in certain situations. For example, as discussed in previous blog posts, patients who receive services at an in-network facility by an out-of-network provider “shall be covered at no greater cost to the covered person than if the services or treatment were obtained from an in-network provider.”  While Colorado is ahead of the game in having established these hold harmless provisions in statute, there are some improvements that should be made to strengthen the protections. Most notably, consumers generally do not know that these protections exist. Disclosure and notification requirements and consumer education could help consumers understand whether they are obligated to pay certain medical bills. Additionally, Coloradans that have plans not regulated by the Division of Insurance (mostly those with coverage through a large employer), are not afforded these same protections and may receive no notice or warning when they may be seen by an out-of-network provider.

Another problem is that while the existing protections cover consumers, they do not outline a process for resolving  provider reimbursement when a service or treatment is provided by an out-of-network provider at an in-network facility. This particular aspect of the problem gets really contentious really fast.

For their part, health care providers argue that the root of the problem is that the insurance companies are unwilling to pay them fair market rates and that they are getting cut out of networks as insurance carriers narrow their networks to save costs. On the other side of the argument, the health insurance companies argue that providers are charging exorbitant rates for services.  There are entire groups of providers that may choose not to contract with insurance companies, and “when providers choose not to participate in a health plan’s network or do not meet requirements for participation, consumers have little protection against physicians who “balance bill” or charge the cost difference for a particular service.”

During the 2015 legislative session, Sen. Irene Aguilar introduced legislation (SB15-259) aimed at going further in addressing surprise out-of-network billing. Among other things, SB15-259 required both providers and health insurance companies to disclose information to consumers about in-network and out-of-network services and the associated costs and consumer protections. The bill (as introduced) did not have a comprehensive solution to address the provider-carrier reimbursement issue, but did establish that an insurance carrier could try to negotiate. SB15-259 died among opposition from both the health insurance community and the provider community.

There are ongoing discussions about this issue, and there is still a potential for legislative action on this issue this session. However, at this point in time, no compromise has been reached in Colorado that addresses the root issues like networks, participation and reimbursement rates. Even as those issues continue to play themselves out, we can do more to help consumers and make sure they are informed about their protections. CCHI supports efforts to require disclosure to consumers who are seeking services at an in-network facility that there is a possibility of treatment from an out-of-network provider and that they may be protected from paying out-of-network rates. Disclosure to consumers who may be treated by an out-of-network provider and incur higher charges is key for those Coloradans not protected from surprise out-of-network bills. The question is, will all the players in the system make changes necessary to make sure consumers aren’t caught off guard by surprise bills even when they’re playing by the rules?

If you’ve been surprised by a bill from an out-of-network provider even though you went to a facility in your network, share your story with us to help us ensure consumers are notified and protected from surprise bills.

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