Too often patients who thought they had all the right approvals from their insurers get hit with surprise bills for out-of-network medical costs, New York Gov. Andrew Cuomo says in a report that calls on insurers, doctors and hospitals to help craft reforms.
Complaints about out-of-network costs were among the most common found in a state investigation of consumer complaints. The probe found cases in which consumers took pains to seek treatment from doctors and hospitals in their plan’s network, only to learn after they got a bill that an out-of-network surgeon or anesthesiologist had assisted in their care. Additionally, a growing number of insurers have changed how they reimburse for out-of-network care, shifting a larger portion of the cost to policyholders. That can lead to surprises like the one faced by Sharon Smith – a Syosset, N.Y., woman whose insurer paid only $2,500 toward an $18,000 surgery on her son performed by an out-of-network provider, as KHN reported in a story last month.
Some of the bills documented in the report resulted from emergency room care, while others came from scheduled treatments, often at in-network facilities. Among the examples it cited: One consumer, who got approval for an in-network surgery, was stunned to find out that an out-of-network surgeon assisted, leaving the patient facing a $7,516 bill. Another received an $83,000 bill from an out-of-network plastic surgeon who reattached his finger at an in-network emergency room.
“Our investigation shows that too many people are being hit with medical bills that are too high when they thought their care was covered by their insurance. We can’t allow that to continue,” Cuomo said in a press release Wednesday.
Health insurance plans vary in how they reimburse for out-of-network care. Some plans – typically HMOs – limit care to in-network providers only: the patient is responsible for all costs if they get care out of that network. Others, including preferred provider organizations, will pay part of the cost of out-of-network care, but patients are generally responsible for the difference between that payment and what their doctor or hospital charges. After a national databank tracking usual and customary charges shut down in 2009 – following an investigation into questionable data by then-New York Attorney General Cuomo — some insurers began basing those payments on a percentage of Medicare rates. Those rates are generally far lower than usual and customary averages, so policyholders can find themselves paying more.
Cuomo’s report calls for changes, including better disclosure by doctors or hospitals that out-of-network providers are participating in a surgery or treatment, more information from insurers about how to estimate out-of-network costs and a bar on “excessive” charges for emergency services.
A few insurers do have online “cost estimators” that allow policyholders to estimate costs from various in-network and out-of-network providers. In addition, a nonprofit data firm in New York called Fair Health has a free online tool that allows consumers to estimate how much a dental service or medical procedure will cost in their Zip code – and how much is covered by typical insurance plans. As early as this month, Fair Health will add an additional cost estimator to help consumers whose insurers have switched to the new Medicare-based reimbursement method to calculate their costs.