Beware of Out-of-Network Bills

When there’s a difference between the charge and the insurance reimbursement, and a health care provider tries to collect the difference from the patient — that is balance billing.

Those bills can be enormous. A 2010 report by America’s Health Insurance Plans said out-of-network providers often charge exorbitant rates, as high as 70 times the Medicare reimbursement for a similar service. A report issued by New York State in March cited the case of a patient who went to an in-network hospital emergency room after severing his finger in a table saw accident. The finger was reattached by a nonparticipating plastic surgeon, and the bill was $83,000. The insurer estimated the going rate for the procedure was only about $21,000.

More on the effects of balance billing in The New York Times.

Comments (13)

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  1. Jordan says:

    Very interesting article.
    Good thing I don’t own a table saw.

  2. Cindy says:

    Was the patient advised of this discrepancy? Yikes.

  3. Johanne says:

    If you are going to an “in-network” hospital with the purpose of lowering your costs as much as possible…Why would they assign you a “noparticipating plastic surgeon” to assist you in the first place? They obviously don’t care about their patients’ pockets, otherwise they wouldn’t make such irrational decisions.

  4. Devon Herrick says:

    This is an important issue: How do we prevent this type of problem? I don’t have a problem with a surgeon charging $83,000 for his or her services. I don’t have a problem with a patient either agreeing to pay (or declining the services of) a physician who wants $83,000 to reattachment a finger. However, it bothers me that a member of a surgical team can perform a service on a patient not covered by a network contract, and then send the patient an exorbitant bill because the doctor has not contracted with the patient’s insurer. The doctor should get paid; and I don’t expect doctors to work for less than the fees they negotiate. But if the doctor doesn’t have a contract, he or she really should really be required to work out an arrangement ahead of time. I realize emergencies often make this difficult, but there are ways around this problem. For instance, it would also be nice if the hospital required signed agreements with all physicians that have hospital privileges to follow certain protocols (i.e. check to see if you’re in the patient’s network and work out a deal if not). I hesitate to argue that an unaffiliated physician, who failed to secure an agreement ahead of time, should be held to a specific rate – mostly because I don’t like price controls or bureaucracy. And granted, it’s easy to blame the surgeon for price gouging. But, of course, patients and hospital should share some of the responsibility.

    Yet there needs to be a protocol to prevent people who otherwise follow the rules (i.e. go to an in-network hospital) to know they will not be surprised by a huge bill they expected their insurer to pay.

  5. Timmy says:

    Sounds fishy. These are the kinds of stories that demonstrate the problems with our health care system.

  6. seyyed says:

    it seems like the patient had little time to worry about finding an in-network doctor

  7. Louise says:

    I can only hope that this is highly anomalous. I doubt that many people go to in-network hospitals and end up being treated by out-of-network doctors in emergency situations with no prior knowledge that their insurance wouldn’t pay.

    That said, I don’t think it’s unnecessarily bureaucratic to require a surgeon to have a frank discussion with a patient about possible costs, their willingness to secure temporary agreements, the potential to transfer them to a hospital with a participating surgeon (assuming this is feasible). I think it’s absolutely necessary to give the patient the power to decide if a finger is worth an $83,000.00 bill. Maybe; maybe not.

  8. Dorothy Calabrese, M.D., says:

    In an emergency, where you are conscious, you sign paperwork. Write directly on the admission form and any procedure consent forms: “I authorize that my medical care be provided with pre-authorized network-reimbursement approval.” Urgent emergency care must be provided by law no matter what.

    @Louise: “I can only hope that this is highly anomalous.”

    The gamut of physician abuses of vulnerable patients is far more common than lay people can even imagine and extends way beyond overcharging for competent care.

    George Harrison’s wife successfully sued triple-board certified, Harvard-trained Dr. Gilbert Lederman, the director of radiation oncology at Staten Island University Hospital. Dr. Lederman forced a weakened Harrison to autograph a guitar for the doc’s son & sign autographs for his daughters two weeks before George Harrison died of cancer in 2001.

    And in my backyard, we have the master patient manipulator . . . Board-certified cardiologist Conrad Murray MD. . . murderer of the King of Pop.

    I’m at the end of the referral tree, so I see a lot of very sick, refractory patients who’ve been innocently taken advantage of by previous physicians. It is very hard on these patients when you are forced to just spell it out in no uncertain terms that their previous highly-credentialed doc is a crook.

    Physician abuse of patients is increasing – not decreasing.

    Dorothy Calabrese MD
    Allergy & Immunology San Clemente, CA

  9. Bob Hertz says:

    We need health courts, with the authority to cancel any debts that result from price gouging.

    Assume that the surgeon would require six hours of work to attach the finger. Assume that assistants would be needed for anesthesia, etc.

    The total bill should not exceed $10,000.

    If the AMA does not want health courts, which is understandable, then they should be disciplining a doctor like this on their own.

    More details of my proposals are available at The Health Care Crusade.

  10. Bill Radiar says:

    Yikes..Everyone keep your fingers together…

  11. Wasif Huda says:

    Bob, I think health courts are further unnecessary red-tape.

  12. Bob Hertz says:

    Wasif, please expand on your comment if you will.

    I mean, bankruptcy is also a lot of red-tape, but if you are truly bankrupt it can let you build a new life.

    Let me phrase it this way:

    if not health courts, what will protect desperate patients if a health care provider tries to take advantage of them?

    Thanks, bob hertz

  13. Dorothy Calabrese MD says:

    Bob writes: “what will protect desperate patients if a health care provider tries to take advantage of them?”

    This is a very important point. There is no case such as the NY State case presented where a physician / surgeon can perform any role, particularly performing a major emergency procedure, at a hospital without hospital privileges and agreeing to the terms and conditions of the hospital.

    There are protections based on state law and contracts:
    a) the language of the contractual relation for privileges between the hospital and the doctor
    b) oversight and regulation of the hospital by the American Hospital Association
    c) the in-network insurer contract with the hospital
    d) the Medical Board and State Business & Professions code regulations regarding the offending physician’s excessive billing without proof of the presence of unique circumstances or the performance of an unusual procedure justifying excessive charges relative to appropriate fees consistent with area physician charges for comparable or similar procedures

    Dorothy Calabrese, MD
    Allergy & Immunology San Clemente, CA