My family gets its health insurance through my wife's employer, a multi-hospital system. Until this year, we have had in-network coverage only. Last fall, somewhat to my surprise, the hospital-insurer agreed to cover in full an operation out-of-network on grounds that no one in-network was qualified to do it. This was a wake-up call for me, and I insisted that this year we pay more for a plan that provides limited out-of-network coverage.While out-of-network coverage has substantial deductibles and limited co-pays, out-of-pocket expenses are capped at about $11,000 per individual. That strikes me as worthwhile catastrophic insurance if one of us gets seriously ill and needs to tap a top specialist outside the network. But our experience with the covered out-of-network operation we already had raises a question in mind about that out-of-pocket maximum -- for myself and for insured patients in general, particularly those buying on the new healthcare exchanges.
Here's the rub: while our insurer informed us that the operation would be covered in full, they were slow to pay some bills and paid some only in part. We then became targets of "balance billing" -- practices affiliated with the hospital where the operation occurred as well as the hospital itself dunning us for unpaid balances, often under threat of siccing a collections agency on us.
While my read of Steven Brill's exposé and other articles about the Byzantine insurer-provider tug-of-wars prepared me in part for the endless stream of apparently contradictory bills flooding our mailbox, the "negotiation" doesn't seem to work as I would have expected. Eventually, the insurer paid the vast bulk of the billed costs of the operation itself, with a couple of notable exceptions and with further delay for post-op services. Along the way, however, it apparently informed various providers that coverage was denied or that large co-pays were due. When we queried the insurer, they reiterated that these services were covered in full. They did not seem to negotiate significant discounts, but rather just drag their feet. Meanwhile, we kept getting calls and letters urging us to call and arrange a payment plan for this and that. The most worrisome sticking point was from one among the guild of those notorious gravy-train riders, the anesthesiologist, who billed over $3,000 for services at an operation not requiring general anesthesia. The insurer initially paid them about $1,300, and they came after us repeatedly for another $1,800.
We have been very lucky in that the insurer has by now paid the vast bulk of the dozens of broken-out charges associated with the operation. (We were also lucky to get confirmation in writing, once the billing games began, that the operation and related services were covered in full, having foolishly neglected to get such confirmation when the operation was first approved.) But the stressful, wasteful and dangerous billing/payment process raised a question in my mind about the out-of-network coverage we've since bought. It's this: What if you hit your payment cap for the year, and the insurer keeps playing tug-of-war with the healthcare providers (understandably, since the providers overcharge shamelessly), and the providers come after you-the-patient via "balance billing" -- seeking the difference between what the insurer has paid and what they've billed?
When we sit down in doctors' and hospitals' waiting rooms and fill out all those ridiculous forms, we inevitably agree to pay for any costs the insurer refuses. If you've hit your out-of-pocket maximum for a year and your insurer won't pay what the provider demands, what then? Endless dunning letters, your credit wrecked, a lawsuit?
Some states have laws against balance billing; others don't. Some state insurance commissioners are advocates for consumers and responsive to complaints; most aren't. A question, then, for any healthcare experts or healthcare lawyers who may happen on this post: What if you've hit your out-of-pocket maximum, and the bills keep coming? Who enforces that maximum and calls the hounds off?