Balance billing

Balance billing, sometimes called surprised billing, is a medical bill from a healthcare provider billing a patient for the difference between the total cost of services being charged and the amount the insurance pays.[1] It is an especially common problem in the United States with providers who are out of network, and therefore not subject to the rates or terms of providers who are in-network. Balance billing has a variable prevalence by market and specialty.

Advocates of balance billing argue that it increases the incomes of high-quality healthcare providers, and serves as a measure of their dissatisfaction with insurance company fees.[2] Critics say that balance billing lets providers raise charges through stealth rather than transparent pricing, creates unnecessary administrative costs and patient confusion, and allows providers to simply pass along costs to patients, rather than helping them to secure good value.[3] It is thought to erode political consensus in favor of a one-tier system of healthcare, and to inhibit some people from getting the care they need, by making that care more expensive.[4]

Canada

Throughout the 1970s in Canada, the country saw an increase in balance billing, which in Canada is normally called extra-billing. It was not permitted in Quebec or British Columbia, but had been encouraged in Ontario and Alberta, and tolerated in other provinces. The federal government estimated that by 1983, extra-billing across Canada totaled $100 million. The government believed that extra-billing was enabling the creation of a two-tiered Canadian healthcare system, in which people who couldn't afford extra charges would receive lesser care. In 1984, the government passed the Canada Health Act promising universal and comprehensive health coverage for all Canadians, which contained provisions to discourage user fees and extra-billing by imposing financial penalties on and reducing transfer payments to, provinces that permitted them.[5][6][3] Today, five provinces prohibit all extra-billing, while Alberta, British Columbia, and Newfoundland allow it in a small number of circumstances, and Prince Edward Island and New Brunswick do not restrict it at all.[7]

United States

Balance billing has received growing attention in the 21st century, particularly “surprise” balance billing. In 1986, Congress enacted the Emergency Medical Treatment and Labor Act (EMTALA) to ensure that individuals seeking emergency services had access to care. Because of this Act, health services are required to provide care regardless of an individual's ability to pay for the service. Insurance companies may only cover specific costs which would then require individuals to pay the remaining balance out-of-pocket after the service is performed. In 2019, JAMA published an assessment of out of network billing for privately insured patients, with an out-of-network emergency department (ED) medical bill increased from 32.3% to 42.8%. It was discovered that out of the network, medical billing has largely become common for privately insured even when seeking care in an in-network hospital, creating a substantial financial burden.[8][9] Surprise balance billing is when an out-of-network provider bills an individual for services that were not covered by the insurance plan. This is often a surprise because an individual may be unaware that the services were out-of-network or did not actively choose to see in an inpatient setting.[10]

In America, out-of-network care is very common and unavoidable in emergencies. Studies have concluded that in 2014, one in five inpatient emergency department causes will lead to surprise bills. The services that will likely lead to a surprise medical bill are:[11]

20% of emergency department admission
14% of outpatient visits to the emergency department
9% of elective inpatient admissions

Additionally, according to a study published by KFF in 2017, they found that 1 in 6 emergency room and hospital stay resulted in the out-of-pocket bill.[12]

In 2017 and 2018, six states passed a variety of laws to limit surprise balance billing bringing the total to 25 states with at least some protections.[10] The six states with a comprehensive approach were California (A.B. 72: Out of Network Coverage and A.B. 1611 Emergency Hospital Services: Cost), Connecticut, Florida, Illinois, Maryland, and New York.[13] A comprehensive approach had laws that applied to both HMOs and PPOs, provided protection to emergency department and in-network hospital settings, and prohibited providers from balance billing by creating payment standards or outlining a process for disputing medical bills between providers and insurers.[13] Congress gave the issue serious attention in 2018-2019[14] with both the House and Senate passing substantive bills out of committee in the summer of 2019.[15]

Health insurance in the United States is typically provided by a managed care plan with preferred or exclusive "network" of providers; balance billing does not occur with providers in-network, as the insurer negotiates an agreed rate ahead of the service.[16]

Standard medical billing companies offer only the billing element of a physician's needs including supporting innovative approaches to improving quality, accessibility, and affordability, while finding the best ways to use innovative technology to support patient-centered care according to the Centers for Medicare & Medicaid Services.[17]

For Americans who receive a surprise balance bill, as of 2019, a total of 28 states [18] increased protection activities for Americans against balance billing such as different emergency settings, types of a managed care plan, type of protection, and method for payments. With the Protection Act, all American citizens can be assisted through the state Department of Insurance for financial aid. For Americans who are not protected by the state law, they can contact primary insurance companies to appeal the payment or make a payment plan with the providers.[19]

France

In France, physicians who want to charge more than the government-negotiated set fees are considered to be in a separate "payment sector," which essentially means they are treated as self-employed. They can charge higher fees, and receive reduced benefits. In 1987, about 27% of French physicians chose to balance the bill. The percentage is higher for specialists rather than generalists, and for doctors in urban rather than rural areas.[20]

Germany

Balance billing is prohibited in Germany. Fee schedules are negotiated between sickness funds and physicians, and physicians are not permitted to charge more than the set amount.[21]

Japan

Balance billing is prohibited in Japan, and extra fees are only allowed in a small number of circumstances, such as having a hospital bed with extra amenities.[22]

Taiwan

Balance billing is prohibited in Taiwan, and extra fees have only been allowed recently, and in rare defined circumstances. Today, patients in Taiwan are allowed to choose more expensive versions of some devices such as stents, implants or prosthetics, and to pay the difference in cost themselves.[23]

References

"Balance Billing - HealthCare.gov Glossary". HealthCare.gov. Retrieved 2019-10-23.
Holahan, John, Lynn Etheredge (1986). Medicare physician payment reform: issues and options. Washington DC: The Urban Institute. p. 109. ISBN 978-0-87766-395-9.
Porter, Michael E., Elizabeth Olmsted Teisberg (2006). Redefining health care: creating value-based competition on results. Boston, Massachusetts: Harvard Business School Press. p. 338. ISBN 978-1-59139-778-6.
Bennett, Arnold, Orvill Adams, Families United for Senior Action Foundation (1993). Looking north for health: what we can learn from Canada's health care system. Jossey-Bass/Aha Press Series. p. 173. ISBN 978-1-55542-516-6.
McEwen, Nicola (2006). Nationalism and the state: welfare and identity in Scotland and Quebec: Regionalism and Federalism. Brussels, Belgium: P.I.E. Peter Lang SA. pp. 128–9. ISBN 978-90-5201-240-7.
Dunn, Sheilagh M. (1982). The year in review, 1982: intergovernmental relations in Canada. Kingston, Ontario: Institute of Intergovernmental Relations. pp. 180–182. ISBN 978-0-88911-038-0.
Sullivan, Terrence James, Patricia M. Baranek (2002). First do no harm: making sense of Canadian health reform. Toronto, Ontario: Malcolm Lester and Associates. p. 44. ISBN 978-0-7748-1016-6.
Sun, Eric C.; Mello, Michelle M.; Moshfegh, Jasmin; Baker, Laurence C. (2019). "Assessment of Out-of-Network Billing for Privately Insured Patients Receiving Care in In-Network Hospitals". JAMA Internal Medicine. 179 (11): 1543. doi:10.1001/jamainternmed.2019.3451. PMC 6692693. PMID 31403651.
"Balance Billing". Annals of Emergency Medicine. 68 (3): 401–2. September 2016. doi:10.1016/j.annemergmed.2016.06.034. PMID 27568434.
Albright, Matthew (October 3, 2018). "Senate Bill and State Balance Billing Laws". Zelis. Retrieved 2019-10-02.
Garmon, Christopher; Chartock, Benjamin (2017-01-01). "One In Five Inpatient Emergency Department Cases May Lead To Surprise Bills". Health Affairs. 36 (1): 177–181. doi:10.1377/hlthaff.2016.0970. ISSN 0278-2715. PMID 27974361.
"About 1 in 6 Emergency Visits and Hospital Stays Had at Least One Out-of-Network Charge in 2017". 20 June 2019.
Lucia, K; Hoadley, J; Williams, A (June 2017). "Balance Billing by Health Care Providers: Assessing Consumer Protections Across States". Issue Brief (Commonwealth Fund). 16: 1–10. PMID 28613066.
"Analyzing New Bipartisan Federal Legislation Limiting Surprise Medical Bills | Health Affairs". www.healthaffairs.org. doi:10.1377/hblog20180924.442050/full/ (inactive 2020-05-29). Retrieved 2019-04-16.
Albright, Matthew (September 24, 2019). "Unbalanced: Differences between the House & Senate SBB". Zelis. Retrieved 2019-10-02.
"balance billing definition". healthinsurance.org. 2017-09-05. Retrieved 2019-04-16. Providers that are in-network have agreed to accept the insurance payment as payment in full (less any applicable copays), and are not allowed to balance bill the patient.
"What To Expect From Medical Billing Services". AccuMed. 25 October 2019. Retrieved 2019-10-25.
Hoadley, Jack; Lucia, Kevin; Kona, Maanasa. "States Are Taking New Steps to Protect Consumers from Balance Billing, But Federal Action Is Necessary to Fill Gaps | Commonwealth Fund". www.commonwealthfund.org. Commonwealth Fund. doi:10.26099/jfne-dp10. Retrieved 2019-11-20.
Lee, Christen Linke Young, Matthew Fiedler, Loren Adler, and Sobin (2019-08-01). "What is surprise billing?". Brookings. Retrieved 2019-11-20.
Thompson, Lawrence H. (1992). Health Care Spending Control: The Experiences of France, Germany & Japan. United States General Accounting Office. p. 40. ISBN 978-0-7881-0574-6.
Thompson, Lawrence H. (1992). Health Care Spending Control: The Experiences of France, Germany & Japan. United States General Accounting Office. p. 41. ISBN 978-0-7881-0574-6.
Ikegami, Naoki, John Creighton Campbell (1996). Containing health care costs in Japan. University of Michigan Press. p. 10. ISBN 978-0472105380.
Okma, Kieke G. H., Luca Crivelli (2009). Six Countries, Six Reform Models: The Healthcare Reform Experience of Israel, The Netherlands, New Zealand, Singapore, Switzerland and Taiwan: Healthcare Reforms "Under the Radar Screen". World Scientific Publishing Company. pp. 179–180. ISBN 978-981-4261-58-6.