Preventing and fighting surprise medical billing: steps consumers should take

Thirty-two percent of insured individuals who had problems paying medical bills reported receiving care from an out-of-network provider that their insurance did not cover, while 69 percent of those individuals said they were not aware that the provider was not in their plan’s network when they received the care, according to a Kaiser Family Foundation (KFF) survey published in January 2016. Betsy Imholz, special projects director and a surprise medical bill expert at Consumer Reports, noted in a January 17, 2017, article that “the problem is only growing worse as our healthcare system grows more complex and more insurance companies narrow the network of doctors they contract with or shift to insurance plans that eliminate coverage for out-of-network services.”

What is a surprise medical bill?

A medical bill that an insured individual receives from an out-of-network provider when the individual is unaware that the provider is out-of–network is referred to as a “surprise medical bill.” Out-of-network providers may charge patients whatever they choose and may bill the patient for the amounts that were not paid by the patient’s health plan, referred to as a “balance bill.”

According to a March 2017 KFF report on surprise medical bills, such bills may arise from an emergency when the individual does not have the ability to select providers. Often, emergency room (ER) physicians do not participate in the same health plan networks as the hospitals where they work. In addition, the patient may not have had the ability to choose the hospital or the ambulance provider. In situations when a patient receives planned care, such as a planned surgery from an in-network provider (for example, a hospital or ambulatory surgical center), other providers involved in the surgery may not be in the same network. In many nonemergency situations, the in-network provider rather than the patient arranges for the other providers participating in the procedure or treatment. Such providers may include anesthesiologists, radiologists, pathologists, and surgical assistants.

What consumers can do

Individuals can prevent surprise medical bills by avoiding receiving services from out-of-network providers, when possible, and fight surprise medical bills after receiving them. A Center on Health Insurance Reforms (CHIR) report identified the following steps for patients to take to prevent unexpected charges:

  • Use provider directories and other plan provided information to identify in-network providers;
  • Ask providers if they are in the patient’s health plan network;
  • After receiving a balance bill, the patient should review the plan’s explanation of benefits and notices about consumers rights;
  • Before paying a balance bill, the patient should contact the health plan and the provider to find out if the plan is willing to pay the bill and/or if the provider will accept a lesser amount; and
  • Contact the state insurance department to see if there is a remedy under  state law.

Additional tips for patients were addressed in an April 6, 2017, article in Consumer Reports written by Donna Rosato. In cases of emergency care or if ambulance service is needed, Rosato recommended the individual to ask the first responders or ER doctors to provide documentation confirming that the individual had no choice and transport by ambulance was medically necessary. She noted, however, as a preventive measure, that individuals find out, before needing to go to an ER, which nearby hospitals are in-network and which ER physicians are in-network. Then, in an emergency, if possible, the individual can request to be taken to an in-network ER. In nonemergency situations, such as a planned surgery, Rosato also suggested that individuals obtain a list from the doctor’s billing staff (and hospital) of other providers that may be part of the procedure or treatments such as an anesthesiologist, radiologist, and pathologist. Then contact the insurance plan and ask if the providers identified are in-network. If the providers are out-of-network, the individual should notify the attending physician and request providers who are in-network.

Trump administration disperses $485M in opioid fight

The Trump Administration announced $485 million in grants to assist states with combating opioid addiction. The funding is the first part in two rounds of opioid-focused state grants provided for by the 21st Century Cures Act (Cures Act) (P.L. 114-255). The funds will be administered by the Substance Abuse and Mental Health Services Administration (SAMHSA).

The funding will be received by all 50 states, the District of Columbia, American Samoa, Micronesia, Northern Marianas, Palau, Puerto Rico, and the Virgin Islands. The allocation of the $485 million was determined according to need. The largest grants were awarded to states with the highest rates of overdose deaths and unmet need for opioid addiction treatment. Some of the highest awarded states include: California ($44,749,771), Florida ($27,150,403), Ohio ($26,060,502), Pennsylvania ($26,507,559), and Texas ($27,362,357).

In a letter to governors, HHS Secretary Price called the opioid crisis alarming, noting that “opioids were responsible for over 33,000 deaths in 2015.” He also admonished governors that “we cannot continue to lose our nation’s citizens to addiction.” Price cautioned that “while I am releasing the funding for the first year immediately, my intention for the second year is to develop funding allocations and policies that are the most clinically sound, effective and efficient.”

Highlight on Wisconsin: Medicaid waiver could be first of its kind

Wisconsin Governor Scott Walker (R) supports a number of novel Medicaid requirements for the state’s beneficiaries, including premium payments, drug testing, and a work requirement. Although a formal plan is not expected to be released until mid-April and sent to HHS by the end of May, if the plan is approved, Wisconsin would become the first state in the country with mandatory drug testing for Medicaid beneficiaries. Testing would be based upon Medicaid applicants’ answers to a screening. The proposal would mandate treatment for those who test positive. The screening is designed to limit the number of individuals in the program.

Price and Verma

The Wisconsin approach is part of a bigger theme of Republican-led states looking to limit Medicaid spending. Governors expect reciprocation from new HHS and CMS leaders regarding the restrictive ideals and, accordingly, are looking to get more out of Medicaid waivers than the Obama Administration allowed. The strategy is not without its rationale. In their first joint action, HHS Secretary Price and CMS Administrator Verma sent a letter to state governors discussing potential improvements to the Medicaid program. In that letter, Price and Verma wrote that the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) expansion of Medicaid “to non-disabled, working-age adults without dependent children was a clear departure from the core, historical mission of the program.” Also, prior to her position as Administrator, Verma worked on a proposed work requirement for Indiana’s Medicaid program. The Obama Administration rejected that proposal.

Drug screening

While the Obama Administration allowed states to differ in the expectation they placed upon program enrollees, governors like Walker are hoping they will see more eye-to-eye with Price and Verma than they did with Obama Administration officials on restrictive policies like work requirements. In light of the recent failure of the American Health Care Act (AHCA) in Congress, and that legislation’s attempt to cut Medicaid funding through per-capita caps, the Trump Administration is incentivized to find savings in other places. Walker believes Wisconsin’s plan is a promising approach. However, there is concern that the Trump Administration will be opposed to the drug screening because the Administration is trying to appear sympathetic to the growing drug epidemic. Opponents criticize the drug screening measuring, noting that the best way to help drug abusers is to expand Medicaid and provide them with the care they need.

Unconstitutional?

Other critics have called the drug screening measure illegal. However, the state’s Medicaid director defended the plan to test Medicaid recipients for drug use, rejecting assertions that the requirement would be unconstitutional. In addition to asking the Trump Administration whether Wisconsin can drug test childless adults on Medicaid, Governor Walker plans to request the ability to drug test able-bodied adults seeking other public benefits including food stamps and jobless payments—a request the Obama administration denied.

Highlight on Mississippi: OIG finds a big ‘Miss’ in state’s Medicaid reimbursement

The Mississippi state Medicaid agency claimed over $21 million in unallowable school-based administrative costs over a three-year period, according to an OIG review of the state’s school-based and community-based administrative costs. The improper reimbursement request arose from inadequate documentation and sampling.

Administrative Costs

For Fiscal Years 2010 through 2012, Mississippi claimed school-based administrative costs, which are considered public assistance costs, totaling nearly $42.4 million. The OIG conducted a review of the state’s administrative costs because of the significant amount claimed and the fact that the state had not submitted a cost allocation plan (CAP). School-based Medicaid administrative costs are reimbursable when the costs are for activities that directly support identifying and enrolling potentially eligible children in Medicaid.

Not Reimbursable

The OIG determined that the state Medicaid agency claimed costs in violation of federal requirements. Specifically, the state agency used statistically invalid random moment sampling (RMS) to allocate its Medicaid costs and did not maintain adequate support to validate its sample results and related extrapolations. When evaluating the legitimacy of the RMS, the OIG found duplications on participant lists, improperly documented employee schedules, and sampling that included improper days like holidays. Additionally, sample data was not properly stored and could not be duplicated to ensure accuracy.

Additionally, under 45 C.F.R. Sec. 95.507(a), states must submit to the division of cost allocation (DCA) a CAP that follows federal requirements. The state submitted $42,399,301 ($21,199,651 in FFP) in school-based Medicaid administrative costs without promptly submitting all of the necessary information to DCA.

Recommendations

The OIG recommended the state agency:

  • refund $21,199,651 to the Federal Government;
  • revise its implementation plan and amend its CAP to both address the statistical validity issues identified and incorporate CMS’s sampling documentation requirements;
  • implement policies and procedures to ensure that its RMS complies with Federal requirements for statistical validity;
  • maintain adequate support, including all information necessary to reproduce and verify its sample results, for school-based administrative costs allocated to Medicaid;
  • promptly submit to DCA for review and approval its future CAP amendments describing its procedures for identifying, measuring, and allocating costs to Medicaid; and
  • review school-based Medicaid administrative costs claimed after the audit period and refund unallowable amounts.

Response

The State agency disagreed with the OIG’s comments but did not address the recommendations. The state agency disagreed that its RMS was statistically invalid and asserted that it was, instead, properly documented.