A big topic in healthcare these days – beyond high costs and expanding insurance coverage through ‘Medicare for All’ – is patients unknowingly incurring ‘surprise’ medical bills at hospitals. This happens more frequently than we may typically believe. It happens anytime and everywhere.
Why does this matter? Because after receiving medical care by a supposedly-covered doctor or facility, we or a family member, may receive an unexpected and very expensive charge not covered by our insurance plan. The surprise comes when another non-network provider has contracted with your in-network provider to perform services on you, the patient. Unfortunately, your insurance plan does not accept this ‘third party’ as in-network, meaning that your liability for their services go beyond what your insurer accepts and pays.
One example of this is having an emergency appendectomy at your local hospital, which is listed as an in-network provider under your health insurance plan. Sometime after this event, you learn of the cost for this procedure, typically by receiving an explanation of benefits (EOB) from your insurer, and any invoice sent to you by the health provider showing your liability (e.g. deductible, coinsurance, non-covered charges, etc.).
However, there is a much larger invoice that sneaks through the mail, from an anesthesiologist, who is not employed by the hospital. The anesthesiologist is an ‘out-of-network’ provider with your insurance company, which means that your insurer will only pay up to the predetermined allowable amount, while the non-covered provider can balance bill you the remainder of their list price (full charges). In some cases, the difference in price can be grossly substantial. The point is, during your surgery, you (and any family member) had no input on which provider(s) would be included in your procedure.
Research by Stanford University discovered that 39 percent of 13.6 million trips to a hospital’s emergency department by privately-insured patients resulted in an out-of-network bill. In fact, during the period studied, from 2010 to 2016, the likelihood increased nationwide from about a third of ED visits in 2010 to about 43 percent in 2016. Additionally, for patients admitted to in-network hospitals, this same study found that 37 percent of 5.5 million admissions resulted in at least one out-of-network bill during this same time period.
A Kaiser Family Foundation Health Tracking Poll conducted in early September indicates that nearly eight in 10 Americans support legislation to protect people from surprise medical bills. In fact, BOTH Republicans and Democrats actually agree legislation should be passed to protect patients. But true to form, lobbyists are fighting this movement because they feel their livelihood is at stake. These detractors are not only medical professionals, but also private equity and venture capital firms that employ doctors and contract them out to healthcare facilities.
A true case in point is ambulance services. Studies suggest that between half and two-thirds of ambulance rides are out-of-network (see graphic by USC-Brookings Schaeffer Initiative for Health Policy).
Years ago, large hospitals owned helicopters that would be included in the hospital billing – and covered as ‘in-network’ by insurance companies. However, primarily due to high overhead costs, hospitals gradually sold their ambulance services to private companies. Air ambulance bills began to inflate substantially. For example, according to Dr. Marty Makary’s recently published book, “…between 2007 and 2016 alone, the average price of an air ambulance transport charged by one company went from $13,000 to $50,000.” The examples found in Makary’s book about the grotesque pricing is alarming. In Texas, one air ambulance company charged $43,514 to fly a patient to another hospital that was 50 miles away. The patient’s Blue Cross and Blue Shield plan paid $13,827 of this amount, but the patient was billed the balance of $29,687. This sounds like déjà vu all over again – as we learn what has been happening with prescription drug markups.
Air ambulance companies have increased by 1,000 percent from the 1980s to 2017. For-profit air ambulances aggressively seek to win referrals from EMTs, paramedics, first responders, nurses and emergency physicians, often providing financial incentives for such referrals through informal agreements. According to Makary, the kicker is this: “Eighty percent of the more than half a million air ambulance flights a year (1,300 per day) in the U.S. are NOT emergencies but are much more like routine transfers. In other words, most of the time, these helicopters are taking stabilized patients from one facility to another…” These trips could be performed at a much lower cost with a ground ambulance.
Government payers, such as Medicare and Medicaid, make up a large percentage of air ambulance flights. But by law, private air ambulance companies cannot bill Medicare or Medicaid patients for any amount above what the government pays. It is only the privately-insured patients who are affected by this predatory medical billing practice. This price-gouging is done to people when they are at their most vulnerable. Even if asked up front, most air ambulance services will not share their egregious price before hauling you off into the sky.
Restoring trust in healthcare begins with ending surprise medical billing. Billing practices must be honest, transparent and fair. Ending kickbacks and implementing patient protections is a good start for any provider or service to be allowed to assist patients and the public. State lawmakers can help protect consumers by requiring prices to be at least published – if not controlled. Laws should require air ambulances to inform patients and family members how much the flight is going to cost BEFORE being used. Finally, developing a database that identifies the person or organization who made the decision to summon the air ambulance company will expose hidden conflicts of interest.
Enough is enough with the various industry players hiding behind the cloak of secrecy demanding grossly unreasonable prices to vulnerable patients. This is one ‘entitlement’ program that must go away soon.
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