Balance Billing – If we are not at the table, then we are on the menu

Surprise medical bills are all over the news recently. From state legislators to our current president, everyone is looking to curb the practice of balance billing (1,2). Unfortunately, as insurance companies, hospitals, and providers compete for dollars, patients get caught in the middle.

What is Balance Billing?

Balance billing occurs when providers, hospitals, and insurance companies fail to contract with each other. In EDs, it occurs when a patient seeks care at an in-network facility and is treated by an out-of-network provider. It may also result from being taken to a nearby out-of-network hospital in an emergency. In these scenarios, the provider and/or facility do not have a set contract with the patient’s insurance company. Therefore, when they submit the bill for the care provided, insurance companies often refuse to pay the full amount. The balance of the bill becomes the responsibility of the patient, which can be quite large if the patient’s insurance plan has a high out-of-network deductible (3,4).

Surprise medical bills and balance billing are often used interchangeably, but they may not always be the same thing. A bill sent to a patient for an unexpected amount after receiving medical care is considered a surprise medical bill. However, these may originate from many different situations. For example, aside from receiving care from an out-of-network provider, a patient may be uninsured and be charged non-contracted rates or have a high deductible plan that requires the patient to pay a large amount prior to their insurance covering in-network care (3).

Balance billing has been in existence for years but has recently increased in frequency causing it to gain national attention (5). The Affordable Care Act (ACA) implemented measures that protect patients access to care while also trying to decrease costs. This led to insurers moving from profiting off patients who now had guaranteed benefits and cost-sharing amounts, to narrowing networks and reducing the cost of provider contracts. As insurers narrowed their networks, patients were more likely to receive out-of-network care, which was not protected by the ACA’s out-of-pocket spending caps (6,7). Additionally, out-of-network charges by providers and hospitals are often deliberately set at many times the reimbursed amount in order to negotiate with insurance companies (5). This led to patients getting caught in the middle with large balance bills.

Unique Challenges for the ED

Patients seeking emergency care do not have the time, and occasionally the capacity, to judiciously choose an in-network emergency provider – they often end up at the closest ED. In addition, many EDs are staffed by companies independent from the hospital that have separately negotiated contracts with insurers. Therefore, while the facility may be a part of the patient’s insurance network, the provider they see that day may not. This results in a patient receiving out-of-network care while in a vulnerable situation (8).

On a higher level, emergency care in the United States has been guaranteed by federal law. The Emergency Medical Treatment and Active Labor Act (EMTALA) requires that any patient presenting to an ED receive a medical screening exam, and if a medical emergency is identified, have that condition stabilized. This means that emergency medicine physicians must provide care to anyone who comes through the door. This provides a healthcare safety net for the nation (9). For this safety net to function, hospitals and providers must be adequately compensated so they can provide high-quality care without going out of business (10). Therefore, the cost of taking care of patients whose insurance will not pay or will pay below the market rate – i.e. the balance of the bill – must be offset by another source. Unfortunately, that source to date has been the patient.

The core of the balance billing problem in emergency care is that the negotiation occurs after the service is rendered. This disadvantages doctors and hospitals since they must accept whatever compensation that insurers and patients offer. Insurance companies have already collected a premium and possibly a deductible from the patient; therefore, their profit is determined by how much of that money they keep. By not contracting with providers and keeping doctors out-of-network, they shift the cost onto patients with a balance bill (10).

Limitations of Current Data

Recent studies based upon insurance and medical claims data concluded that 1 in 5 patients who were admitted to a hospital from an ED receive a balance bill (8,11). The use of this data has been criticized due to its source and small sample size. In addition, the findings contradict state-level data that show lower rates. However, the major issue with both studies is that they seek to place the blame on the physician without addressing the role of inadequate insurance networks (10).

The challenge of defining the problem and evaluating solutions stems from inadequate data. Thus far, insurance company data have been used to study the problem (8). As physicians, we must collaborate to obtain a more complete picture of the market. We should start by accurately describing the frequency of balance billing and where the practice occurs. We can use data from states that have already passed legislation to analyze which solutions will work to fund our safety net without causing financial harm to our patients. Lastly, we should study network adequacy and rising deductibles to determine if insurance companies are failing to contract or passing on costs to their customers, thus exacerbating the problem.

Importance of Physician Advocacy

Within the last month, the Senate and House have released legislation that attempts to end balance billing. Ideally, we should see consensus forming around a single bill in each house of Congress in the next month. Every bill aims to protect patients by limiting their payment to in-network cost-sharing rates. However, the key differences include scope of the legislation and how providers are paid by insurers. Currently, there are multiple proposals and no clear agreement on a final plan between Senators, Representatives, and the President. This will likely be what lobbyists and advocacy groups focus on as members try to find the most palatable solution (12).

As emergency physicians, we need to educate ourselves on balance billing in order to engage our politicians, advocacy groups, patients, and practices in a meaningful discussion. While the media tries to simplify this into a catchy headline that pits patients against providers, the problem is complex with multiple players and billions of dollars at risk (13). An optimal solution will be difficult to obtain, but all parties must agree that patients should not serve as pawns in this chess match. We are the only physicians available to patients 24 hours a day, 7 days a week, 365 days a year. The universal coverage we proudly provide is at risk if we are not active in the process of fixing this problem. Physician advocacy has never been more important with many states already passing legislation and national legislation likely to pass this year (1). If we are not at the table, then we are on the menu.

For More Information on Balance Billing:

ACEP Proposal:

http://newsroom.acep.org/2019-01-28-ACEP-Presents-Framework-To-Protect-Emergency-Patients-From-Out-Of-Network-Billing-Issues

EMRA Chapter:

https://www.emra.org/books/advocacy-handbook/balance-billing/

Proposed Federal Legislation:

The House https://www.vox.com/policy-and-politics/2019/5/14/18622825/surprise-medical-bills-trump-house-health-care-legislation

The Senate https://www.healthaffairs.org/do/10.1377/hblog20190521.144063/full/

References:

1. Luthra S, Huetteman E. Bipartisan Support Builds For Limits On Surprise Medical Bills [Internet]. NPR. 2019 [cited 2019 May 11]
2. Weixel N. Trump urges Congress to take action on surprise medical bills [Internet]. The Hill. 2019 [cited 2019 May 11]
3. Sontag RJ. Making Sense of Balance Billing [Internet]. EM Resident. 2019 [cited 2019 May 11]
4. Sontag RJ, Dhaliwal J, Granovsky MA. Balance Billing and Fair Coverage. In: Emergency Medicine Advocacy Handbook.
5. Adler L, Ginsburg PB, Hall M, Trish E. Analyzing New Bipartisan Federal Legislation Limiting Surprise Medical Bills [Internet]. Health Affairs. 2018 [cited 2019 May 11]
6. Hall MA, Adler L, Ginsburg PB, Trish E. Reducing Unfair Out-of-Network Billing — Integrated Approaches to Protecting Patients. New England Journal of Medicine 2019;380(7):610–2.
7. Howard DH. Adverse Effects of Prohibiting Narrow Provider Networks. New England Journal of Medicine 2014;371(7):591–3.
8. Cooper Z, Morton FS. Out-of-Network Emergency-Physician Bills — An Unwelcome Surprise. New England Journal of Medicine 2016;375(20):1915–8.
9. EMTALA Fact Sheet [Internet]. [cited 2019 May 11]
10. Berger E. Finding a Balance on Balance Billing. Annals of Emergency Medicine 2017;70(2):A15–A18.
11. Garmon C, Chartock B. One In Five Inpatient Emergency Department Cases May Lead To Surprise Bills. Health Affairs 2017;36(1):177–81.
12. Scott D. Congress wants to stop surprise medical bills. But they have one big problem left to solve. [Internet]. Vox. 2019 [cited 2019 Jun 8]
13. Sanger-katz M, Abelson R. Surprise! Insurance Paid the E.R. but Not the Doctor [Internet]. The New York Times. 2016 [cited 2019 May 13]

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