As I am recently coming off a clinical rotation in the emergency department, I wanted to talk about one of the most hated part of American medicine: surprise medical bills.
In the emergency setting, we see some of the worst examples of this. Some media outlets have even started collecting emergency bills showing the wide differences in billing practices across the nation. These stories are shocking.
$3,200 for a nosebleed.
$3,600 for a tetanus shot and a bandaid.
~$108,000 out-of-pocket after treatment for a heart attack, on top of ~$56,000 paid by the insurer.
What gets to me is how often these bills are waived once the media spotlight shines. For example, in the last case the hospital reduced the bill to ~$800 after negative PR. To me, this only reinforces the capricious nature of these bills.
These articles demonstrate several problematic aspects of billing practices. First, emergency visits are very expensive (just like other aspects of American medicine). Second, with ever-skimpier insurance plans, patients are getting stuck with huge costs when taken to out-of-network hospitals. Third, even if a hospital is in-network sometimes the providers are outside the insurer’s network. Fourth, hospitals have engaged in balance billing practices, in which they charge patients the difference of their charge and what the insurance pays.
In many ways, these issues are just symptoms of a larger problem. Health care is extremely expensive in the U.S. and health insurance is often inadequate in protecting against financial harm. While the ACA placed caps on out-of-pocket costs and deductibles, the rise of high deductible and narrow network plans have exposed patients to substantial financial risk. The unrelenting rise in healthcare costs leads to skimpier coverage, and now increasingly affects people with “good insurance” provided by their employer.
Emergency room billing is newsworthy because it shatters many of the myths around how health is yet another commodity. This consumer-based model assumes actors that can judge a good on quality and cost to make a welfare-maximizing decision.
However, patients arriving by ambulance do not have a say in which hospital they are taken to. They are often quite sick and lack medical knowledge to make an informed decision. They also have limited time to evaluate medical choices (if choices are even offered). And both patients and physicians are wholly unaware of the price, which is never discussed in my experience.
The emergent nature means that physicians and hospitals are morally (e.g., duty to rescue) and legally obligated to treat patients. Meanwhile, patients and payers have little bargaining power after services have been provided.
Fortunately, while there is the usual finger-pointing between providers/hospitals and insurers, there seems to be broad-based support to address the issue of emergency department billing. The American College of Emergency Physicians have proposed a 6-point plan. States have started to act. Texas recently expanded the arbitration process for medical bills and is currently debating more comprehensive legislation. Six states have implemented comprehensive consumer protection against balance billing, and 15 other states have some kind of protection against balance billing in emergent and/or inpatient settings.
As as is the case with most health care legislation, state-level protections can only go so far due to ERISA, which preempts state regulation on self-insured plans. In the prior session of Congress, there were bipartisan bills in the House and Senate to end surprise billing. It remains to be seen if the bills will be brought back this session. Certainly, there seems to be broad recognition of the problem.
Senator Cassidy (R-LA) put it bluntly,“Patients should have the power, even in emergency situations when they are unable to negotiate… Our proposal protects patients in those emergency situations where current law does not, so that they don’t receive a surprise bill that is basically uncapped by anything but a sense of shame.”
What can you do to avoid surprise bills while we wait for Congressional action? The Healthcare Financial Management Association, a joint organization supported by health insurers and hospitals, put together a guide to avoid surprise medical bills. However, the guide mostly focuses on elective outpatient appointments and procedures. Furthermore, it asks for a lot of research on the part of patients. Somehow, I don’t think this is going to solve the problem.
Let’s hope that Congress will act this session to protect patients and fix this broken market.
Rahul Nayak is a 2018-2019 Petrie-Flom Center Student Fellow.