The calls did not come often, but they were painful.
They came from patients who were surprised and frightened by bills for procedures at a hospital in the MemorialCare Health System, even though the hospital was within the patients’ insurance networks. The bills were for services by providers who worked at the hospital but were out of network — and John Cascell, senior vice president of managed care for the California system, understood why the patients were upset.
“They would call the hospital and say, ‘I came to your hospital and now I’m getting a bill from an anesthesiologist,’” he said. The patients didn’t know they could get a bill beyond what they expected from the hospital for services by a doctor they didn’t choose. “That’s what upset them the most.”
So MemorialCare instituted a policy for physicians’ groups that provide doctors to treat patients in its hospitals: make sure those doctors are in the same insurance networks as the hospitals. Complaints about surprise bills virtually disappeared, Cascell said.
That’s one of the strategies that teaching hospitals have implemented to help protect patients from unexpected medical bills, in response to rising concern among patients about unexpected charges and shrinking network coverage.
As House and Senate leaders craft legislation to spare patients the burden of “surprise billing,” teaching hospitals are taking other steps, such as developing online estimator tools that calculate out-of-pocket costs for most medical procedures and billing patients as if they are in-network even if they’re not.
There are several reasons that patients get unexpected bills. Among policymakers, the term “surprise billing” refers to cases when a patient, through no fault of their own, receives an unexpected bill for care from an out-of-network provider. Those scenarios typically occur when a patient uses emergency services outside of their insurance network (such as when they are away from home) or unknowingly receives care from an out-of-network physician (such as an anesthesiologist) at an in-network hospital.
While not specifically addressed in legislation being considered by Congress, another reason for unexpected bills is when someone receives in-network care but did not realize their out-of-pocket costs as determined by high deductibles or coinsurance obligations in their insurance coverage. In addition, the growing practice by insurance companies to narrow their networks of doctors, health care facilities, and other providers increases the chances of a patient getting care at a facility or from a provider who is out of the insurance network.
Surprise bills can range from under $100 to tens of thousands of dollars. Medical debt is a leading cause of bankruptcy in the United States, and in some surveys, “unexpected medical bills” rank at or near the top of events that people fear they could not afford.
It’s no wonder that more patients are seeking to nail down their potential out-of-pocket expenses before moving ahead with procedures if they can.
“More patients are requesting cost estimates in advance,” said Dan Weaver, vice president of communications at UCHealth, a Colorado-based health system affiliated with the University of Colorado School of Medicine.
One reason, he said, is that many people are keeping down their insurance premiums by choosing plans with high deductibles, making the patient responsible for the full cost of care until they meet that threshold. (In some cases, employers offer only high-deductible plans.) In addition, Cascell at MemorialCare said that the prominence of discussions in the news media and among policymakers about the problem of surprise billing has compelled patients to ask more about their potential financial obligations.
“They are shopping around a little bit more,” he said.
In response, some health systems have created online cost estimators to give people projections of their out-of-pocket expenses for specific procedures. The systems access up-to-date information about each patient’s insurance coverage, including the status of deductible and coinsurance obligations, and discounts based on the health system’s contract with the insurer.
The Mayo Clinic launched its cost estimator in 2018, said Mark Norby, chair of the revenue cycle at Mayo.
“Before this tool, the only option for patients would be to call or email us” for estimates, Norby said. “We found that more people don’t want to interact with us via those mechanisms. And frankly, it’s more effective and efficient for the patient and us if they do the self-service option.”
Norby said Mayo set out to expand price transparency through a tool that would “be accessible on the patients’ time” and present information “on a level that would make sense to the average health care consumer” — in other words, make it easy to understand for patients rather than just using terminology designed for medical professionals.
University of Utah Health (U Health) posted its estimator tool in 2016 as part of a larger effort to get a handle on the actual costs of procedures and to “become more transparent to our patients,” said Chief Financial Officer Charlton Park. The bottom-line question: “How do we help them understand costs?”
“Patients have reacted positively,” said Jenni Alvey, senior vice president and chief financial officer of IU Health. “They appreciate that the estimates include patient copays and other out-of-pocket costs, and they like that physician charges and radiology costs are included.”
But while the hospitals have seen lots of visits to the online tools — Mayo reports page views growing from 80,000 in 2018 to 115,000 last year — many if not most patients still prefer personal consultation. For that reason, the health systems also provide estimates by some combination of phone, email, and in person.
For example, UCHealth opened a call center for cost estimates simultaneously with its online estimator. Since then, Weaver said, the call center has received 35,000 calls, while the online tool has received 3,000 estimate requests. However, Weaver pointed out that all the estimates come from the online tool, because that’s how the call center staff develops its estimates.
Those estimates, whether online or in person, often factor in discounts for those who are paying on their own rather than through insurance. The stated discount on U Health’s estimator, for example, is 30%.
Meanwhile, hospitals without online estimate calculators — which is the majority of them — have beefed up their processes for staff to routinely project out-of-pocket costs for patients before they commit to non-emergency procedures.
“We’ve tried to do a lot more up front, rather than having them find out on the back end” — that is, after the procedures — “how big their out-of-pocket portion might be,” Cascell said.
Securing in-network prices
Whether or not a patient has insurance, one of the most common sources of surprise bills is the emergency room. Surprise bills can occur when patients arrive for emergency treatment with insurance out of the hospital’s network, or they get treated by an individual provider who is out of the patient’s network.
U Health bills all emergency department patients as if they are in network, said Park. “Whoever the payer is, we do the right thing” by the patient, he said.
Other hospitals try to get everyone who cares for a patient into the same insurance network. MemorialCare and IU Health push for all in-hospital physicians in radiology, pathology, anesthesiology, and emergency care to be in the same network as the health system.
“We are pretty steadfast in making sure this language is in the agreement” that the system has with the physician groups that provide doctors to treat patients in its hospitals, Cascell said.
At IU Health, Alvey said, “We require all hospital-based providers who perform services at our hospitals to make best efforts to remain in network with the same payers that our IU Health facilities and physicians are in-network with.”
In cases where an out-of-network doctor does bill a patient for services at a hospital that’s in the patient’s network, the hospitals increasingly work with the physician to reduce the bill.
“If a patient does receive a balance bill for an out-of-network provider who is not employed by IU Health, we will often intervene and encourage the provider to discount their bill to be in line with an in-network rate,” Alvey said. Most of the time, she said, “We have found the providers agreeable.”