Surprise bills follow Marin emergency room visits

Visitors to the emergency rooms at Marin General Hospital, Novato Community Hospital, and Sutter Health's Urgent Care Center in Terra Linda might be getting stuck with a portion of the bill - even if they are covered by insurance companies that contract with both hospitals.

Just ask Novato resident Martin Kropelnicki.

Kropelnicki was stumped when a collection agency came after him earlier this year for payment of extra fees after he visited the emergency room at Marin General Hospital and his children were seen at Sutter Health's Urgent Care Center in Terra Linda in December. Both hospitals have a contract with Aetna Life Insurance Co., Kropelnicki's insurer.

Before Kropelnicki got his letters from Cypress Collection Services, he received a statement from Aetna telling him that it had paid the bills. The statement indicated he was not responsible for the extra amount that the California Emergency Physicians Medical Group, which operates the emergency room at Marin General, and the Marin Urgent Care Physicians group, which operates the emergency room at Novato Community and the Urgent Care Center, were trying to collect.

The only entity that responded to Kropelnicki's calls and letters was the collection agency. Its representatives had one message - pay up or else.

"That's the thing that frosts my cake," Kropelnicki said. "Answer my damn letter and tell me why that money is due. If I owe, I'll pay it."

What no one would tell Kropelnicki is that neither California Emergency Physicians nor Marin Urgent Care Physicians has a complete contract with Aetna. As a result, when Aetna refused to pay what the physician groups believed they had coming to them, the physicians billed Kropel- nicki. In the health care industry, this practice is known as "balance billing."

No one knows for sure how many Marin residents have been victims of balance billing. But Anthony Wright, executive director of Health Access California, says Kropelnicki is just one of thousands of people across the state getting caught each year in the cross-fire between insurance companies and physicians.

"We don't feel it is appropriate to bring the patient, who is after all experiencing medical problems, into a financial dispute," Wright said. Health Access is a health-care consumer advocacy group.

Balance billing has caught the attention of California legislators who have introduced several bills to remedy the problem. One group of emergency physicians told the Assembly's Health Committee that it billed 64,000 consumers in a single year for charges not paid by their insurance company.

California Emergency Physicians has an agreement to care for Aetna's preferred provider organization policy holders but not its health maintenance organization policy holders. Just the opposite is true of Marin Urgent Care Physicians, which has a contract that covers Aetna's HMO customers but not its PPO customers. Aetna has 48,770 HMO and 283,990 PPO policy holders in Northern California.

Under HMO coverage, policy holders must get approval from their general practitioner before seeing specialists and must pay the entire cost of seeing any doctors outside of Aetna's system. PPO coverage allows policy holders more flexibility. It pays for a portion of the bill for seeing doctors outside the Aetna system.

The California Emergency Physicians Medical Group, which operates 50 hospital emergency rooms statewide, severed a contract with Aetna affecting 865 Marin policy holders in August 2003.

"We had a contract for HMO patients but there were significant problems between the insurance company and us - trying to figure out who owed what," said Mark Spiro, the California Emergency Physicians chief operating officer.

The Marin Urgent Care Physicians medical group has only an HMO contract with Aetna. That leaves 6,905 PPO Aetna policy holders with incomplete coverage.

But Aetna is not the only insurer that lacks a contract with the Urgent Care Physicians, said Georgia Bennett, president of Big Valley Commercial, the Modesto-based firm that negotiates contracts and does the billing for Marin Urgent Care Physicians.

"We don't have very many contracts," Bennett said. "They're all under review at this time."

If a physicians' group has a contract with an insurer, it is against the law, in most cases, for them to bill patients for things the insurer refuses to pay for. But according to an analysis prepared for the state Legislature, a missing contract is just one of several reasons why a doctor or physicians' group might "balance bill" an insured patient.

In some cases, a physician has provided a service that requires prior authorization without first receiving authorization. In other cases, a physician has provided a service that is not covered under the enrollee's health plan. In still other cases, a physician has failed to bill within the contractual timeline.

Assemblyman Leland Yee, D-San Francisco, introduced a bill this year, AB1321, which would make it illegal for hospital-based physicians to seek payment from insurance policy holders. Instead, it would require the physician or physician group to seek reimbursement solely from the policy holder's insurer.

The legislation, which was sponsored by the California Association of Health Plans, stalled in the Assembly's Appropriations Committee. But Adam Keigwin, an aide to Yee, said the assemblyman will pursue the bill's passage again next year.

When physicians "balance bill" patients, the patients often pay the bill even though they may not be responsible for it, Wright said. Those who don't face collection agencies and court action that can ruin their credit rating, he said.

Kropelnicki said he paid a $31 bill to the Urgent Care Physicians last month after Cypress Collection Services threatened to place a lien on his house.

"When you deal with a group of emergency room doctors who are the only emergency room doctors who serve that hospital, they're in a pretty strong position," said Bobby Pena, a spokesman for the California Association of Health Plans. "What they've been doing lately is refusing to sign contracts unless they get a contract for exactly what they want to charge."

The California Medical Association, which opposes Yee's bill, said the problem is that insurers are denying doctors adequate payment.

"Many physicians are in the situation where they simply can't accept the contract. They can't afford to keep their offices open at the unfair contract rates," said CMS President Dr. Michael Sexton, an emergency room physician at Kaiser Permanente Medical Center in Terra Linda.

When Kropelnicki visited the emergency room at Marin General Hospital in December to receive treatment for a strep throat, Aetna refused to pay a $31 night fee and a $35 charge for use of a pulse oximeter, which monitors the percentage of the blood's hemoglobin that is saturated with oxygen.

"If providers bill for things that they know are above and beyond reasonable and customary and then bill our members, they are putting our members in the middle," said Aetna spokeswoman, Rachelle Cunningham.

But an emergency physician who used to manage Marin General Hospital's emergency department, Dr. Larry Bedard, said the pulse oximeter is considered a standard test for someone suffering from strep throat.

Cunningham said that had Kropelnicki appealed to Aetna, the insurer might have paid the additional fees. But the statement Aetna sent to Kropelnicki told him he wasn't responsible for paying it. Sexton said it is inappropriate for any insurer to make such a comment.

California Medical Association representatives have been talking with Assemblyman Paul Koretz, D-West Hollywood, about sponsoring alternative legislation, which would require insurers to pay 100 percent of bills submitted by physicians initially while allowing them to appeal specific charges to state regulators.

"When you look at the amount of resources, which makes more sense - to tell a physician, who is really a small business, that they must accept what a multi-billion-dollar corporation chooses to pay - or to put the onus on the big corporation to prove they're right?" Sexton said.

Bill Rothman, a critic of Sutter Health, which manages Marin General and Novato Community hospitals, believes Sutter is negligent in allowing the two medical groups to exclude a major insurance carrier such as Aetna. Sutter Health contracts with the two medical groups to provide the services at Novato Community and Marin General.

"In an emergency, people should be able to go to see a doctor without concern there is going to be financial hardship because they don't have the right insurance," Rothman said.

A spokesman for Marin General Hospital, Jim Loveland, said the hands of hospital management are tied.

"It's simply against the law for us to tell them how to run their businesses," Loveland said.

Bedard said insurers often grant hospitals more favorable contract terms than they give to physicians' groups, "then get the hospitals to lean on us to take unreasonable contracts. It's called course of contracting."