Surprise! When your hospital is in-network but your doctor isn’t

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How one couple and one state dealt with a surprise medical bill of $32,325.

Patients who have insurance and go to in-network hospitals may still wind up with unexpected bills. It happens when doctors are out of network and don’t take a patient’s insurance. In those instances, patients may owe the balance between what the provider charges and what the insurance plan is willing to pay.

It’s often referred to as surprise billing, a form of balance billing, and it’s a situation that Michael Trost of Dingmans Ferry, Pa. encountered this past spring. An unanticipated trip to an in-network hospital and the subsequent surgery from an out-of-network doctor resulted in a surprise bill of $32,325.

“I was shocked,” recalls Trost.

“I think I was a little trembly about it,” adds Susan Rosalsky, Trost’s wife of 17 years. “I guess in my naive view of health insurance, I had felt that because we were in network, that everything would be taken care of.”

From shortness of breath to unexpected surgery

He thought it was pneumonia. Michael Trost, 52 and seemingly healthy, just wasn’t feeling right.

It was March. It was still cold outside. Pnemonia, he thought. During a chance break at work as a wood finisher, Trost’s wife brought him to an emergency room near where he and his wife live at the edge of the Poconos.

“They’ll give me a chest x-ray and antibiotics and I’ll be on my way,” he thought.

Over the next few days Trost went from having an unsuspecting cough and shortness of breath to being nearly immobile on a hospital bed, getting tests, pokes, injections and perhaps most uncomfortable of all, a balloon pump through an artery.

Doctors told Trost he needed open heart surgery to repair the mitral valve.  They said “your blood is backing up, your heart is pumping really hard, and it’s not working.”

It was a complete surprise. They transferred him from Bon Secours in Port Jervis to Good Samaritan in Suffern, which had an ICU and cardiology unit. A surgeon repaired his mitral valve and he was home the next week.

“I feel an enormous sense of gratefulness,” says his wife, Susan Rosalsky. “We dodged so many bullets in terms of how this scenario panned out.”

They made it to the hospital in time, Rosalsky explains, thanks to a late order, which allowed Trost to leave work. And just months before the surgery, Rosalsky had finally landed a full-time teaching gig with good health insurance for the two of them. That was after years of having bare-boned health plans or none at all.

But a couple weeks after the surgery, bills and the explanation of benefits started coming in.

Rosalsky, who was handling the paperwork, thought they were strange, but didn’t make much of them at first. She’d made a point to check and go to hospitals that were in their insurance network, but bills are complicated. She thought she “must have missed the fine print,” and owed a few hundred dollars here and there.

Then they received a bill for about $32,325. It was from the cardiologist, Dr. Arthur Ng with Cardiac Surgery Group in Hackensack, New Jersey. He was not in their insurance network, even though the hospital was. Trost and Rosalsky said they didn’t know that at the time, nor did they think there was an option. Dr. Ng did not respond to interview requests.

The insurance company, UnitedHealth, sent Michael a check, for what it deemed a reasonable rate for the procedure: about $4,000. It meant the two were on the hook for the rest, about $28,000.

And so began a new kind of stress.

“I just got back on my feet in terms of employment last year,” says Rosalsky. “We couldn’t have afforded this chunk of money.”

A growing trend?

The two received what many refer to as a surprise medical bill or a balance bill, meaning you owe the balance. Data is lacking on just how prevalent the practice is or what the average costs are to patients.

“However I don’t think the situation in general is rare,” says Dr. Kelly Kyanko, a researcher at New York University who’s analyzing the out-of-network phenomenon and how some consumers are handling it.

Unexpected bills have been the number one complaint to New York’s financial services office, according to a spokesperson. Consumers Union recently launched a complaint tool after its own survey estimated that as many as one third of people with private insurance have received a surprise bill.

Kyanko and others also think the scenario could become more common as many insurance networks are become narrower. That’s especially the case with plans sold through the health insurance marketplaces.

While patients may be on the hook for these bills, about a dozen states have enacted protections, according to Jack Hoadley, a researcher at Georgetown University’s Health Policy Institute.

“Some are limited and some extend to a broader range of circumstances,” he says.

Why it happens

Balance billing occurs when providers are not covered as part of an insurance plan, when they’re out of network.

Hospital policies vary on the use and disclosure of out of network providers.

In one scenario, a patient knows a doctor is out of network but chooses to seek that care anyway and pay the balance. In other instances, a person experiences an emergency, and without choice, receives care from an out-of-network provider. Some hospitals have emergency room doctors from outside companies with their own insurance contracts.

In another type of surprise billing scenario, Kyanko gives a personal example, which happened when she gave birth to her son two years ago at a hospital that was covered under her insurance network. Knowing about balance billing, she asked more questions than a typical patient.

“My husband was laughing because when the anesthesiologist came in to put in an epidural, I asked specifically if he took my insurance,” she recalls.

The anesthesiologist did, but she later received a $636 bill from an out-of-network pediatrician who was called in for an assessment.

“Looking back, I have no idea how I could have prevented that bill. And I’m very educated on that topic,” she says.

It might seem counterintuitive, that a doctor and a hospital don’t always take the same insurance. Hoadley, the researcher at Georgetown, says that’s the reality of health care in the U.S.

“We have a fragmented health system where different kinds of physicians, different kinds of providers, make their own decisions of which insurance networks to belong to,” he explains.

It’s an economic negotiation, he says. Insurers may offer doctors lower payments in exchange for directing more patients to their practice. That might be appealing.

“But the question is how much lower than the regular rates are they willing to accept to create that relationship?” he says.

Sometimes the two sides can’t agree or don’t want to, and so thats when patients find themselves in the crossfire.

“It’s a really tricky triangle between the physician, the patient, and the insurer,” says Kyanko. “You’re kind of left with the physician saying, ‘I think I deserve this much money, and the insurer saying ‘we don’t agree.’ So you don’t have a contract with them, and in the end in most states, patients are stuck in the middle.”

Kyanko, Hoadley and others think these situations could become more common, because many insurance networks are becoming narrower.

About a quarter of states have established some protections, mostly for emergency room situations. New Jersey has been debating legislation that would involve more cost and out of network disclosures, and protections when a patient involuntarily receives a bill in a non-emergency situation.

New York’s new rules

New York recently enacted the strongest, “most comprehensive” set of rules to date, according to Hoadley.

“The broad principle is people who do everything right to stay in network, but get slammed with bills, they are going to be held harmless,” says Matt Anderson, a spokesperson with New York’s financial services department. “It’s a really great relief to those who otherwise would have been fighting for years with their insurance company over these bills that run into the tens of thousands of dollars.”

Anderson says now, if patients getting care in New York get a surprise bill, they’re no longer responsible for it. Instead, it’s up to the insurer and provider to reach a payment deal through an independent mediation process. Providers and insurers must also have more advanced disclosures about the cost and network status of care.

Dr. Andrew Kleinman, an immediate past president of New York’s medical society, says everyone agrees that the patient shouldn’t be liable, but getting all groups to agree on actual rules was extremely hard and took years.

Doctors, for example, worried it could result in much lower payments.

“We’ve experienced this with government payments with Medicare and Medicaid, and when times get tough, payments go down artificially,” says Kleinman. “So this became very difficult to sell to physicians, until we really worked out the details.”

Kleinman says the crux of this going through was having an outside agency determine fair rates and mediate agreements. It also means providers are guaranteed a payment from the insurer, as opposed to inconsistent payments from patients.

What patients can do

Even when patients aren’t protected by state law, they may still have some recourse.

Dr. Kelly Kyonko, the researcher at NYU, challenged that surprise bill she got when her son was born.

“In my case I was balance billed, and it took me three hours on the phone between my insurance company and the doctor, but I was not going to pay the bill,” she recalls of the many back and forth conversations and appeals that took place.

Ultimately, she was able to get it cleared.

Hoadley with Georgetown, says as uncomfortable as it may be, patients may need to be their own negotiators, reaching out to insurers, providers and state regulators directly.

“I think the first rule of thumb is don’t just pay bill when it comes if it doesn’t seem right,” he says. “Start asking questions…did you really mean to send me that bill? I did all these things right, I have insurance, what can we work out?”

While Pennsylvania’s insurance office has not received many complaints, a spokesperson wrote that when it does occur, it’s “harmful to consumers,” and encourages consumers who believe they’ve been impacted by balance billing to file a complaint with the Services for Consumers section.

A happy ending

Trost returned to work six weeks after surgery. His recovery now involves some regular pills and rehab three times a week. “It was amazing to me how undisruptive it was for open heart surgery. You think,’ how can they even do this?'”

But they’d spent a lot of time dealing with another heartache, making phone calls, writing letters, filing appeals after receiving that bill of about $32,325. At first it seemed like they’d be responsible for it.

It was a whirlwind; “It was sickening,” says Rosalsky, Trost’s wife.

She contacted her area representative in Pennsylvania as well as regulators in New York. That’s because their insurance is under New York’s Empire health plan with United Health Care. Rosalsky works in New York, and that’s where Michael got his care.

It was through that process that she learned about New York’s new law. It was enacted on a very significant day for them.

“April 1, the very day I had my surgery,” says Trost.

Much of the law doesn’t take effect until 2016, when insurance contracts are renewed, but after more calls, appeals and back-and-forths, the two say the state and their insurer told them they would not be responsible for the bill.

“Since Mr. Troust provided us with his “assignment of benefit” form, he meets the requirement for protection under the new law. This means that he is responsible only for his in-network co-payment, co-insurance and deductible and the New York doctor who performed the service cannot bill him for any additional amounts. We will address the surprise bill with the physician as outlined under the law,” United spokesperson Maria Gordon-Shydlo wrote in an email.

Anderson, with New York’s insurance department, says they can’t definitively say what will happen until the process is completed, “but it appears based on their case that they would be covered and held harmless.”

Trost says now, he can breath easier.

“It was a huge relief,” he says.

“I was just like, yes! Yes! I just felt so happy,” says Rosalsky.

Both say the whole experience will have them asking more questions about their care and their coverage in the future. Meanwhile, policymakers and health groups have their eye on New York’s new law, to see how well it works moving forward.