Balance Billing Update
One of the biggest problem areas in the healthcare industry is the practice of balance billing of patients by non-participating providers for services reimbursed by the patient’s insurer at less than the provider’s billed charges. The providers’ demand to be paid the balance then becomes a point of contention in a three way battle between the provider, the patient and the insurer. The provider just wants to be paid its standard charge, the patient wants the insurer to cover whatever the patient owes, and the insurer wants to limit its outlay to the payment of a reasonable charge.
Recently, this issue has dealt with in California, where the California Supreme Court has mandated that non-participating emergency department physicians accept an insurer’s payment on behalf of its insureds as payment in full, with physicians having no right to collect the balance from the patient. The physicians may pursue the insurers, but only by disproving the insurer’s determination that the physicians had received the reasonable and customary fee.
In New York, Attorney General Cuomo got United Health Group to overhaul the manner in which it makes its determinations of reasonable and customary fees, reducing the number of balance bills that end up as payment disputes between patients and providers.
New Jersey proposed regulations by its Department of Banking and Insurance to amend the rules governing the Small Employer Health Benefits Program. The proposed rules would change the definition of the payment required by insurers to non-network providers from a reasonable and customary charge to the allowed charge, with the allowed charge to be based on the charge profile for New Jersey developed by Ingenix. The rule change would extend to hospitals as well as physicians. The Ingenix model is the same one Attorney General Cuomo just compelled United to stop using in New York.
In the current economy it is unlikely that states will permit the insured patients to be subject to lawsuits by providers to collect a balance bill. The states will turn these three way disputes into two way disputes between the insurers and the providers. Individual lawsuits to collect a balance bill will disappear. The issue will be about whether providers can get insurers to understand why their charges should be paid. While the abuse of discretion standard generally applies in cases where plan administrators have discretionary authority to determine benefit eligibility, the standard in cases where the administrator is also burdened by a conflict of interest is only discernable by considering the conflict of interest, including evidence outside of the administrative record.
Adam,
I have filed for several patents on a software method for ‘compensatory invoicing’. This is a trademarked term, which describes health payers being able to secure a private lien between themselves and their patients.
The lien, stipulates specifically that if the patient HAS health insurance and the provider bills the health insurance, that the provider HAS to accept what the insurance pays EXCEPT, if the patient chooses to use the provider’s billings to a 1st and/or 3rd party payer.
Thereby, the provider secures the balance of their bills, not directly from the patient, but if and only if, there is a first or third party who has been billed again, through the collateral source rule.
This is different from balance billing because the monies sought are from a second billing with the same bills and not directly from the patient. Moreover, health insurers generally have no juristiction over state laws, allowing providers and patients to enter into a lien agreement.
However, compensatory invoicing does not work in all 50 states, because some states either preclude a provider’s lien against 3rd party if they have already been paid by health insurance OR some states have state statutes stating levels of pay that constitute “reasonable and fair” are determined by general insurers or Medicare levels.
Anyway, I do not agree with balance billing…but I do believe that doctors and providers should be able to be paid their full charges in cases of patients and attorneys using BOTH health insurance and another payer, when double dipping with the provider’s bills – at the full fee level.
I have greatly enjoyed reading your blog Adam…and will continue to be a regular subscriber.
Best,
Steve
My health insurance in Florida has told me that I do not have to pay the balance that my health provider has asked me to pay. They said they have a contractual agreement with them and it wasn’t met so they do not have to pay them. I payed my co-pay but United Healthcare never paid the provider due to the agreement that if they didn’t bill them for an office visit during their alloted time they lose the payment and it has nothing to do with me. Well that’s fine for them but in the meantime they are ruining my credit!
Can you please give me some advice?
The California Supreme Court’s ruling interpreted a provision that applies only to members of HMO’s. Providers bill members of non-contracted insurance companies, indemnity plans, ERISA plans, and PPO plan for amounts unpaid by the insurance company.
Brian
I have the exact situation as Daisy mentioined. Does anyone have any advice. Please help.
Health insurance doesnt work in the US. If you cant afford it (it is very expensive)
you dont have it. We do have programs to provide insurance to those that cant afford it, but it is primarily for children. You can choose any treatment you want as long as you are going to pay for it. If you do have insurance the insurance company pretty much tells you what they will pay for, otherwise you are on your own. Insurance companies rule in the US, and if you dont like it…..too bad.
I’m not sure what people are thinking in this country. If we keep making doctors the bad guys, we soon won’t have doctors! Health insurers are paid HUGE premiums. Most of those execs make far more than the doctors who are saving lives and helping with our quality of life and they didn’t invest a fraction of what doctors invest in education, training, offices, etc. If they don’t want to sign a contract with the insurance company and get paid the pitiful allowances the insurers want to pay, why should they have to? Since when is this a communist country? If we force them to accept those fees when we show up at the hospital with an emergency, guess what! They will just stop covering the ER. We need to wake up and realize that the insurance company is paid to take care of our medical bills and stop giving them excuses not to! Make them pay. Bottom line. And isn’t Ingenix already being fined in NY for price fixing in favor of the insurance companies? Yeah – let’s get them in on the act! Seriously?