Balance Billing: Out of Network Coverage and What It Means To You

On July 1 Sacramento kicked a surprise ball past the goalie and I can’t believe more people aren’t talking about it, because this affects all of us.  As an insider in the insurance industry we’ve been dealing with this problem for years (and if you know me I’ve been ranting about this on our blog since 2014).  What am I talking about?  AB 72 – Balance Billing: Out of Network Coverage.

Balance Billing, you say?  I don’t have that problem, I only see “In Network” doctors.  Sure.  When you’re conscious.  Here’s the most common example:  You need to have a surgery.  You know it’s going to be expensive to stay at the hospital so you take great care to plan everything accordingly with your insurance plan coverage.  You discuss the cost with your doctor.  You meet with the hospital billing department and review what the anticipated charges will be.  You make sure the proper approvals are coordinated with your Medical Group giving you the “okay” to get everything done.  The day arrives, you have your surgery, go home a few days later, start getting better, then BAM!  You get a bill from the anesthesiologist.  Wait.  Who was that guy?  I don’t remember meeting him?  Or maybe I did but it was fast and fuzzy.  Should that be covered as part of the hospital bill?  He must work for the hospital, I’ll just call and sort this out.  Nope.  Not gonna happen.  They don’t work for the hospital!  In fact, according to an SF Gate article dated 10/15/17 “Some doctors- particularly hospital specialists such as anesthesiologists, radiologists, and pathologists- don’t have contracts because they don’t believe they will be adequately reimbursed.”  Adequately reimbursed.  Those are the key words in contention here aren’t they?  What is adequate?

According to AB 72 ‘adequate’ will be 125 percent of the rate Medicare pays, or at the insurer’s average contracted rate, whichever is greater.  So essentially what they are saying here is- hey doc, you have to play by the rules everyone else is playing by- and boy are they angry.  So angry, in fact, they have filed a lawsuit against Governor Brown.  The Association of American Physicians and Surgeons (AAPS) vs. Brown alleges that AB 72 imposes wage and price controls against physicians, and allows insurance companies to set the rates for all physicians, even those not under contract with the insurance companies.  They argue that this law “hands control over to insurance bureaucrats to essentially decide what out-of-network physicians will be paid for life-saving medical care”, and “empowers private insurance companies to deprive out-of-network physicians of the market value for their services, and arbitrarily denies them just compensation for their labor. [https://aapsonline.org/aaps-vs-brown-protecting-physicians-patients-ab-72/].  This is the crux of their argument of course- we should be able to charge whatever we want to charge- THAT’S WHY we didn’t contract with an insurance company in the first place.

I believe the solutions lies somewhere in the middle.  There are lots of doctors who choose not to be contracted with any insurance provider at all.  A percent (possible the 1% *cough cough*) of our population currently often choose to see doctors of all sorts that are not contracted with an insurance company.  I have told clients and friends in the past here is the pattern:  A doctor or specialist in a high-end area like Beverly Hills will build up a practice by being contracted with many insurance providers.  Once they have built up a loyal following they sever ties with all insurance providers and notify their clients “we are no longer contracted with anyone and here are our new rates”.  They can be successful this way because they have built up a market and demand for their services.  However even THEN there is a cap on what they can charge.  After all, they still must remain competitive with their peers.  People paying cash for their services will obviously shop around regardless of how much they trust and respect their provider.  I believe this is a fair practice.  It has transparency (regardless of how they got there).

However, anesthesiologists do not fall into this category.  I argue they are sneaking in the backdoor at the hospital because the hospital hires them- NOT YOU.  Why is NO ONE whether it is the hospital or the anesthesiologist themselves, meeting with you prior to your procedure and saying ‘this is how much I charge for my services’???  Are they necessary and important?  Of course!  Do we 100% know they will be required during any major procedure?  Absolutely!  So why aren’t we given the opportunity to price them out too?  Can you imagine if a contractor came and built you a new roof while you slept then handed you a $15,000 bill?  (Yes, I have seen that much billed before.)  When you say, ‘hey I didn’t ask you to build me this roof I can’t pay you, they replied well I was driving by and I saw you really needed it…’  If you want to be ‘not contracted’ then we should have been given a CHANCE to know how much you are going to charge- and see if we can get ourselves a better deal.  What if we were being provided an anesthesiologist with a less than stellar job history?  Wouldn’t we want to know if they had some mistakes in their past?  That could affect our LIFE!  No.  We were never given the chance to make these choices.  That’s why this law was written.

So that’s my story and I’m sticking to it.  Either tell us about the cost before we need you, or get with the program.  Because hiding in the hospital staff room, then getting mad when we ask you to play by the rules isn’t working for the general population.  It’s theft.