A new story out in the Austin Statesman addresses one of the new tricks insurers are using to avoid paying for otherwise valid hospital claims. What makes this particularly outrageous is the fact the most ER visits are by their nature critical in nature, so patients are unable to “shop around” to make sure they are getting the best price and insurance coverage. What’s worse, most hospitals refuse to disclose their prices up front, even when asked, and later sue patients for poorly-defined expenses under the legal concept of “quantum meruit”. We are currently contesting one such claim where the hospital insists our client should pay $15,000 for one minute of ER time!

Many in-network ER services billed as out of network
Contractors often are not part of an insurer’s network.
AUSTIN — When Terry Combs suffered a stroke the day before Thanksgiving of 2011, he and his family felt reassured knowing that paramedics had rushed him to a hospital in the network of their insurance company.

So it was a shock when the Dallas-area facility sent the bill a few days later: Combs had been treated by emergency room staff on contract with the hospital, with no tie to its network agreements. He had been charged as an out-of-network patient — at a rate several thousand dollars higher.

“When I saw the bill, I just about had a second stroke,” said the 64-year-old retired high school science teacher, adding that he fought the charges for a year before realizing he had no hope of winning.

Such stories are common in Texas, according to a recent report released by the Center for Public Policy Priorities, a liberal-leaning think tank in Austin.

About half of charges billed by doctors at an emergency room of a hospital in a network of one of Texas’ three largest insurers are billed as out-of-network services because the doctor is contracted, the report found.

For the state’s second-largest insurance company, UnitedHealthcare, more than two-thirds of ER charges at in-network hospitals are billed as out-of-network, according to the report. And nearly half the hospitals technically in that network have no in-network ER doctors.

“Even if you are a very sophisticated customer and try to choose hospital ‘A’ over hospital ‘B’ based on network, you can’t control who sees you,” said Stacey Pogue, the report’s author. “It’s a total roll of the dice.”

The report provides an unusually numbers-based look at a long-standing problem that patient advocates say is getting worse.

Health insurance companies are increasingly focused on offering network coverage in which certain providers agree to accept discounted rates for services. Hospitals and the doctors with whom they contract strike separate agreements, often with different insurance companies, but patients still tend to think of all hospital staff as bound to the same billing practices.

That can leave unsuspecting patients with a large gap between what the contracted provider charges and what the insurance company agrees to pay. The patients are ultimately responsible for the gap, called a “balance bill.”

Balance billing has been scrutinized in recent years, with Texas lawmakers acting to add transparency and some mediation rights for patients.

New regulations for hospitals and insurance companies to disclose more information about network agreements allowed the think tank to do its analysis.

The analysis uses the most recent information on the websites of the three biggest insurance companies in the state: Blue Cross Blue Shield, UnitedHealthcare and Humana. Most of the data was from 2013, although Humana’s numbers were from 2012.

Among other findings, the analysis highlighted how emergency room patients are the most common victims of balance billing.

Unexpectedly high charges can come after planned procedures, especially if a patient goes to see an in-network primary care doctor without realizing a specialist needed during the visit is out of network.

But it is in ERs, where patients have the least ability to call ahead to find out if doctors are in network, that have the highest rates of out-of-network staff, according to the report.

Trey Berndt, a lobbyist for the Texas chapter of AARP, called the report “alarming.”