Imagine, for a minute, that you are injured on the job. Or that you fall while doing yard work. Or perhaps you are suddenly stricken with a serious infection. You require immediate care in the emergency room. Fortunately, you have medical insurance, and after a few hours, a few days or even weeks, you’re on the mend.
Then, just when you think all is well, you receive a bill from a billing agency saying you owe hundreds, thousands, or even tens of thousands of dollars for that visit to the ER.
Wait, you have insurance. What is going on here? Often, doctors who may not contract with the patient’s health plan, usually in the ER, send the patient bills for all charges not covered by the health plan’s usual and customary rates. This abusive practice, known as “balance billing,” results in a medical provider unfairly placing a financial burden on the patient instead of working out a payment dispute with a health plan.
It isn’t fair to the consumer and it ought to be banned. While we are in the midst of a national dialog about how to bring down the cost of health care, Balance Billing is adding hundreds of millions of dollars in excess costs. We need to work on lowering costs, not adding to them.
According to a recent study commissioned by the California Association of Health Plans (CAHP), more than 1.76 million insured Californians who visited emergency rooms in the last two years received balance bills on top of their co-pays and deductibles. The average bill was $300. That’s a $528 million burden on insured patients.
This practice creates unnecessary stress and anxiety among patients and their families, while also leaving them with the unfair financial burden. We are already facing health care costs that are growing 2-to-3 times faster than the economy.
Last year, Governor Arnold Schwarzenegger issued an executive order requiring the Department of Managed Health Care (DMHC) to protect patients from balance billing. The Governor’s executive order directed DMHC to implement an independent dispute resolution process for providers to resolve reimbursement disagreements and ensure that providers are reimbursed for their services.
The DMHC is in the process of holding hearings around the state and we’ve testified urging a ban on Balance Billing.
CAHP supports a fair process for resolving disputes between medical providers and health plans, one that does not put insured patients in the middle.
We believe an Independent Dispute Resolution process without a ban on balance billing would still be unfair to insured patients and their families and place them at financial risk. If providers are not prohibited from balance billing the insured patient, the dispute process would be worthless. Patients and their families could still be unfairly billed for unpaid amount of their bill during the dispute.
The California Association of Health Plans is committed to a health care system that keeps costs down and is affordable and available to all Californians. To get there, we need to make sure we examine all of the cost drivers involved, including balance billing. The sooner we ban this abusive practice, the healthier our system will become.