Guest blog on balanced billing from a veteran health advocate...

Friday, May 16, 2008

Beth Capell, Health Access' contract lobbyist extraordinaire, has been advocating for consumers for more than two decades. She offers these thoughts on balance billing, an insidious practice of some doctors and hospitals who decide to threaten insured consumers with aggressive collection agency if the consumer does not pay the “balance” between the insurer or HMO paid for their care and what the doctor or hospital wanted to be paid. (Relatedly, we blogged on a recent and egregious example of the Prime/Kaiser situation. 5/17 UPDATE: There's a new development, where a legal injunction has been ordered, as reported in the Orange County Register on balance billing. The LA Times also has a story.)

“Balance” billing has been illegal for Medicare and Medicaid enrollees for decades. It is illegal for HMO enrollees if they go to a contract facility. And until a few years ago, we probably would have said balance billing was illegal when an insured consumer got emergency care, even at a non-contract hospital.

As consumers, we are sympathetic to doctors and hospitals who feel badly treated by HMOs and insurers. We know what that’s like.

But as consumer representatives, we are pretty impatient with doctors and hospitals that treat consumers badly. We don’t like that either. And when it is all about a billing dispute between providers and plans, we say a pox on both their houses: get consumers out of the middle.

Well, this week DMHC had a hearing on a regulation to do just that: to say that if a consumer with coverage regulated by DMHC gets emergency care, then the consumer is only responsible for applicable copays or deductible, not for the difference between what the emergency doctor or the hospital wanted to be paid and what the HMO paid. Health Access is fortunate that our representative at this hearing is Elizabeth Abbott, who formerly headed the federal Centers for Medicare and Medicaid Services (CMS) in the western region of the United States: she has heard plenty of plan-provider disputes in her day and has no surfeit of patience with whining. She reports that doctors are furious at the proposed regulation.

As we said, we are sympathetic to doctors and hospitals fighting with HMOs. And indeed we as well as the Department have spent endless hours listening to the complaining of doctors and hospitals.

After all that, we know several things: first, consumers deserve to be protected from bad behavior by doctors and hospitals as well as HMOs and insurers. Second, under California law, doctors and hospitals that do not have a contract with the consumer’s HMO do in fact get paid and usually get paid in a reasonable period of time (less than 60 days). So what are the doctors and hospitals fighting with the HMOs about? It turns out it is not just about the amount of the payment but also what counts how.

You would think that it would be easy to decide that when an ER doc takes care of you because you have a broken bone, he should be paid for reading the x-ray or MRI, but it turns out whether that is part of the bundle of services or not is part of what providers and plans fight over. And they fight over it partly because there is no standardization of bundling. The docs, not surprisingly, want the bundling system the docs have developed (called the AMA/CPT code, if you care). But Medicare decided a long time ago that letting the docs set the rules by which they are paid does not make much sense and ditto with Medi-Cal.

And we made it lots more complicated in California when we allowed the development of the “delegated medical model”. (If your eyes are crossing, welcome to my world.) That means that Blue Shield does not just contract with individual docs, but instead contracts with Sutter Medical Group or Hill Physicians or Beaver or Scripps or some other outfit with thousands of docs and hundreds of thousands of patients. So if you are a Sutter Medical Group patient but you end up at UC Davis emergency room because that is where the ambulance took you, what are the rules for bundling the claim? Is that thing-y they put on your finger to check your blood oxygen in or out of the bundle? Is it the Medicare rules? The Sutter group rules? The Blue Shield rules? Or are you actually HealthNet? And why do you care? Well, probably you will when the ER doc or the hospital loses their
patience with the HMO and just decides to send you to collections and let you
fight it out with the HMO.

And yes, this is yet another way in which our current system piles on administrative overhead for no good reason. So in addition to fighting to prohibit balance billing of consumers, we are trying to help figure out how to minimize the provider-plan disputes by supporting a single set of rules for bundling as well as other changes.

The need to end balance billing got a lot more obvious this week when we found out that one hospital system in Southern California, Prime Healthcare, had sent over 6,000 Kaiser members to collections because Kaiser would not pay whatever Prime Healthcare wanted to charge for their emergency care. Prime Healthcare is a system that refuses to contract with most insurers---so it is not just Kaiser members who are at risk: it is anyone with insurance who walks into their emergency room. It looks as if Prime Healthcare took on Kaiser first but nothing prevents the hospitals from doing the same thing to consumers covered by other insurers that Prime fails to contract with. And Prime also seems to be engaged in the same old game that for-profit Tenet used to play of turbo-charging the charges for care so that the sticker price goes up and up.

As well as the proposed regulations, we are working on AB1203 (Salas) and SB981 (Perata) to prevent balance billing of patients who get emergency care. While both these bills are still in progress, we hope this year we can get consumers out of the middle of these provider-plan disputes.

Labels: BalanceBilling, Hospitals, Insurers, Schwarzenegger

posted by Hanh Kim Quach | Permalink | 4:53 PM


 

The timing could not have been better...

Friday, May 09, 2008

Dr. Prem Reddy, owner of Prime Healthcare Services, is running around terrorizing 6,000 Southern California Kaiser Permanente members -- sending them enormous hospital bills (via an aggressive collection agencies) and telling them to pay up, or ruin their credit. See the story here. One patient featured is being asked to pay $50,739.70 in full by June.

The company, with 9 hospitals Southern California, is demanding payment for emergency services that are currently under dispute with Kaiser. The patients are being told they must come up with the money to pay for their treatment (the portion that Kaiser is disputing and has not agreed to pay).

The tactic being used by the hospital chain is called "balance billing,'' where patients are asked to pay the difference between what the hospital billed, and what the insurance company paid. The Schwarzenegger Administration has been working on regulations to ban this practice, and in a strongly worded notice releasing their proposed rules, accused providers -- such as hospitals and physicians -- who engage in this behavior of using "innocent enrollees'' as "bargaining chips in an unfair provider billing pattern'' that leads to "long-term harm o the enrollee's health, safety and financial stability.''

Coincidentally -- the Administration's Department of Managed Health Care will hold a hearing on this very issue in Irvine on Wednesday, the heart of Orange County where three of Prime's hospitals are located (and presumeably many of the recipients of these giant bills.)

Testimony anyone?

(Relatedly, AB1203 by Mary Salas would ban this practice.)

Labels: Affordability, BalanceBilling, Hospitals

posted by Hanh Kim Quach | Permalink | 12:56 PM


 

Balancing priorities on balanced billing...

Tuesday, April 01, 2008

The practice of balanced billing gets the spotlight in an excellent article by Jordan Rau in the Los Angeles Times today. It deserves attention not just in California but across the country.

The piece focuses on the new regulations by the Department of Managed Health Care to ban the practice of "balanced billing," where *insured* consumers are unfairly billed and even sent to collections for going to the doctor or hospital.

The bill should go to the insurer, but because there's a dispute between the health provider and the insurer, the provider also bills the patien--the whole bill or the "balance" of what the insurer won't pay--as a way to leverage the insurer to pay more.

The patient, as a result, either unwittingly pays an bill (often inflated beyond what anybody pays) that is the insurer's responsibility, and even if they don't, they are dragged into this contractual dispute and could be sent to collections--with their credit history and financial future at risk.

Either way, it's not what the consumer was expecting when they signed up for health insurance in the first place. As our Health Access California colleague Beth Capell is quoted, "Consumers who do the right thing and go to a hospital that's in their network should not be leveraged in a fight between doctors and insurers... It's just wrong."

But in deference to our policy advocate, the quote of note comes from the Administration, which illustrates how contentious this issue, describing how regulatory efforts to broker a deal failed after the Schwarzenegger Administration had issued an executive order on this issue in 2005.

The Department of Managed Health Care spent the last two years trying to negotiate a compromise between insurers and providers to work out their payment differences, but couldn't find common ground. So the department decided to simply outlaw the practice through new draft regulations issued Friday.

"We tried to say, when we were young and naive, that we could find a mutually acceptable resolution to make sure physicians were being paid fairly and on time," said Cindy Ehnes, the department's director. "We finally said, we can't solve this marketplace dispute, but what we can do is our core mission of protecting consumers."

The draft regulations would prohibit hospitals and hospital-based physicians from billing a patient for the cost of emergency services that are the responsibility of the patient's health plan.

There will continue to be pending legislation, including by Senate President Pro Tem Don Perata, to see if there is a legislative agreement to settling the contract wars between providers and insurers.

There are issues to work out: these are often cases where a patient goes to an in-network hospital, but has no idea that the ER doctor on call, or the anasthesiologist or other specialists, are not contracted with their insurer. Unlike contracted doctors, there's no negotiated agreement on the rate. The doctor, who was not in a position to refuse the patient, feels the insurer is underpaying. The insurer isn't going to pay the full billed amount by the doctor--a "sticker price" that is more than any insurer pays. So when there isn't an agreement up front, what should be the payment? There's lots of alternatives--and that's what the various legislative proposals seek to address--but the answer shouldn't be to simply stick the consumer with the bill.

But while we are working through those issues, it is appropriate for the Department to focus on what should be the consensus item; to focus on the core issue of protecting consumers from this unfair billing behavior.

Labels: BalanceBilling, DMHC, Legislation

posted by Anthony Wright | Permalink | 6:51 PM


 

Corrective Action and Balance Billing

Friday, March 28, 2008

Now that's responsive.

After a nearly seven-hour hearing yesterday in which the Department of Managed Health Care's consumer-protection creds were questioned, the Department has come out swinging (not that kind) on behalf of consumers.

The DMHC today released draft regulations on balance billing -- that practice where consumers get a bill directly from the doctor or hospital for the difference of what is/was/will be paid by the insurance company, and what they charge. This is particularly pervasive in emergency situations where patients are unable to "shop around'' and ensure that the provider they are being driven to is "in-network.''

The language to describe this practice is kind of edgy -- as edgy as one can be in a "Notice of Rulemaking Action.'' From the document:

"Innocent enrollees are routinely leveraged as bargaining chips in an unfair
provider billing pattern, which can lead to detrimental health care decisions by
the enrollee and aggressive collection activities by the provider, with
long-term harm to the enrollee's health, safety, and financial stability.''

Right on. There's more.

"..Providers use unfair and oppressive tactics, holding enrollees as virtual
financial hostages, to pressure health plans to pay their full-billed charges,
irrespective of whether their full-billed charges do, in fact, reflect the
reasonable and customary value of the treatment provided.''

This is a fantastic opening position for advocates to be in on this issue. The comment period for these regulations ends May 12 at 5 p.m, so get letters in!

Labels: BalanceBilling, Schwarzenegger

posted by Hanh Kim Quach | Permalink | 3:30 PM


 

A fighter throughout...

 

Medi-Cal providers forced to float the state...

 

A novel concept

 

With these health cuts, everybody hurts..

 

Keep on harping

 

Blue Shield and Blue Cross settle on rescissions.....

 

More Blues for Blues

 

Override!

 

Single-payer in committee...

 

This time it counts...