Wednesday, July 26, 2017

Before Your Hospital Hired This Staffing Firm, 6% of Patient Visits in the Emergency Room Were Billed at the Most Expensive Level of Care - Afterwards it's 28%

From the New York Times:
Early last year, executives at a small hospital an hour north of Spokane, Wash., started using a company called EmCare to staff and run their emergency room. The hospital had been struggling to find doctors to work in its E.R., and turning to EmCare was something hundreds of other hospitals across the country had done. 
That’s when the trouble began. 
Before EmCare, about 6 percent of patient visits in the hospital’s emergency room were billed for the most complex, expensive level of care. After EmCare arrived, nearly 28 percent got the highest-level billing code. ... 
Sometimes, insurers simply pay higher out-of-network bills, but the cost is often passed on directly to patients. ... 
Nationwide, more than one in five visits to an in-network emergency room results in an out-of-network doctor’s bill, previous studies found. But the new Yale research, released by the National Bureau of Economic Research, found those bills aren’t randomly sprinkled throughout the nation’s hospitals. They come mostly from a select group of E.R. doctors at particular hospitals. At about 15 percent of the hospitals, out-of-network rates were over 80 percent, the study found. Many of the emergency rooms in that fraction of hospitals were run by EmCare.
The researchers focused on 16 hospitals that EmCare entered between 2011 and 2015. In eight of those hospitals, out-of-network billing rose quickly and precipitously. (In the others, the out-of-network rate was already above 97 percent, and it did not go down.) They also looked at a larger sample of 194 hospitals where EmCare worked and found an average out-of-network billing rate of 62 percent, far higher than the national average. ...
Hospital emergency departments, which must take all comers regardless of their health insurance, were once viewed as financial drains. Then hospital leaders started to see the E.R. as the front door, critical to attracting paying patients. In the early 1990s, emergency departments accounted for a third of admissions to hospitals; today, they account for half, according to a RAND study. ...
In addition to its work in emergency rooms, EmCare has been buying up groups of anesthesiologists and radiologists. In these hospital specialties, it is hard for patients to shop, and out-of-network billing is common.
The good news in California and in a few other states is that this issue has been addressed, as the NYT article states, "California recently passed a law setting a maximum amount that out-of-network doctors can charge patients. Other states, including Florida and New York, have also passed laws to limit surprise bills."

Under that new California's new law which became effective on July 1, 2017, if you visit an in-network facility - such as a hospital, lab or imaging center - you will be responsible solely for your in-network share of the cost, even if you're seen by an out-of-network provider. You can read more about that law here.

Also note that the new California law only addressed non-emergency situations. That is because, by case law, California outlawed balance billing in emergency departments back in 2009, see the 2009, unanimous decision of Prospect Medical Group, Inc. v. Northridge Emergency Medical Group.

There the California Supreme Court declared "balance billing unlawful in the context of emergency medical care. Where a health plan ... does not pay, in whole or in part, the amount charged by emergency room doctors, the doctors now must resolve billing disputes solely with the health plans. The providers may seek dispute resolution, or even sue the health plans if they wish, but they may no longer bill patients with a health plan for the disputed amount."