Have you ever had this happen to you? You or a loved one gets sick, you check and double-check your insurance and find a provider in your insurance network, make an appointment and see that provider. You pay the co-pays and pick up the drugs the doctor prescribed. All seems fine until weeks later, you get an unexpected, and very expensive, bill for services you thought your insurance provider covered. This is called surprise medical billing, and if it has happened to you, you’re far from alone.
Here’s how it works: People go into facilities that are in their insurance network. In fact, if you’re like me you’ll call your insurance provider or at least check its website to make sure the facility is in-network so you won’t get slapped with charges above and beyond the premiums, co-pays, deductibles and out-of-pocket maximums, which already add up to a lot of money.
Even when patients are told that yes, this facility is in-network, they often get a surprise bill after the fact. The bill says that while the facility was covered, one of the medical providers was not, and patients are expected to make up the difference. How was the patient even supposed to know that? Medical insurance companies want to pretend they’re entirely innocent in the shady practice known as surprise medical billing. They’re not.
This happens far more often than you might imagine. According to a study by Stanford University, almost 40 percent of American patients have been hit by surprise medical billing.
This may technically be legal, but it is unfair and unjust and in extreme cases can turn even fairly routine illness into a financial crisis. It’s not an overstatement to say that the existence of widespread practices like this one call the entire American medical system’s legitimacy into question.
America’s health insurance companies say that this is not their fault. They point out that equity firms have bought up a lot of medical practices and have driven billing costs up. The message is: blame the other guy.
They’re not wrong and this is a problem, but it’s not the whole story. American insurance companies are Goliaths who want to pretend to be Davids. The five largest insurance companies will generate more revenue in 2019 than the five biggest tech companies according to Axios.
In forging their agreements with medical facilities, American insurance companies have created a problem for us, known as “skinny networks.” These are networks that are not broad enough to meet the needs of all of their clients.
To a certain extent, this is understandable. People come to doctors and other medical specialists with a wide variety of problems. Even a diligent insurance company can only foresee so many problems and thus only strike a deal with so many problem-solvers.
But really, when, let’s say, most anesthesiologists or many emergency room doctors are not covered by a network agreement, whose fault is that? It’s clear that while equity firms are not making the problem any better, health insurance companies share a portion of the blame for surprise billing as well. Patients really have no way of anticipating the after-doctor sticker shock.
The best solution would be to make sure, first of all, that this is not the patients’ problem and, second, that no party – not insurance companies, not private practitioners, not medical facilities, not equity firms – has the power to lord it over the others.
A bill in Congress called the STOP Surprise Medical Bills Act would stop surprise medical billing. Rather than arguing about blame for what has gone wrong, it would simply force all the parties to fix the problem and not trouble patients about it.
When bills come to the insurance company that are out of network, rather than pass that bill on to you, the insurance company would be required to enter into binding arbitration with that provider, and hammer out a deal.
This approach has been tried in New York and it has already saved thousands and thousands of people from the national plague of surprise medical billing. Congress should replicate this success story for all American patients.