Many people in the United States face unexpected medical expenses despite having private insurance coverage, due to a phenomenon known as “surprise billing.”
Surprise bills occur when people with private insurance get services that fall outside of their plans’ networks. Some of this out-of-network care is very difficult to avoid because it often results from emergency medical services.
People who require emergency transport by an air ambulance, for example, are likely to find their insurers will balk at paying these costs, according to a 2019 report from Congress’ investigative arm, the Government Accountability Office. GAO staff examined data for air ambulance transports of privately-insured patients in 2017. They found 69% of about 20,700 transports in their data set were out-of-network. An air ambulance company, for example, charged $41,400 for transport of a North Dakota consumer, whose insurance plan paid $6,700 of the cost, GAO said. This left the consumer with a potential bill of $34,700, although it’s possible that the air ambulance company later agreed to reduce these costs, GAO said in its report.
Consumers may struggle with the consequences of surprise medical bills, and many of them have stories worth sharing. In many cases, hospitals and other providers of medical care have suddenly lowered costs for consumers after getting calls from journalists.
Kaiser Health News in March 2020 reported, for example, on how Michelle Kuppersmith of New York had made sure the hospital where she had a biopsy of her bone marrow was in her insurance network. But as journalist Liz Szabo reported, Kuppersmith was unaware that a lab company involved in testing this sample was not in the network. She initially faced a $2,400 bill from the lab company. After being contacted by Kaiser Health News, the insurer agreed to pay the lab company the in-network rate, covering $1,200 of the $2,400 charge, and the lab company said it wouldn’t bill Kuppersmith for the other half of the charge, Szabo reported.
Sarah Kliff, now at the New York Times and earlier at Vox, has been a leader in efforts to document consumers’ experiences with surprise medical bills. In her December 2018 story in Vox, titled “I read 1,182 emergency room bills this year. Here’s what I learned,” Kliff recapped her work in looking into high medical costs, including an out-of-network bill of $7,924 presented to Scott Kohan. In May 2018, Kliff reported on how Kohan’s visit to an emergency room in his insurer’s network triggered a surprise medical bill. It turned out that a surgeon who treated him was not in network. In her December story, Kliff reported Kohan’s bill was reversed after Vox reported on it.
But asking journalists to challenge surprise medical bills one by one is not a “scalable solution,” Kliff said in a 2019 briefing on this subject held by the Alliance for Health Policy. Consumers are looking to lawmakers to protect them from surprise bills. As of April 2020, 29 states had taken some action to try to protect consumers from these bills, according to a tally kept by the nonprofit Commonwealth Fund, which studies health policy issues.
Even in these states, though, many consumers remain vulnerable to surprise medical bills. A federal law, the Employee Retirement Income Security Act of 1974 (ERISA), keeps states from regulating one of the largest sources of health insurance, the plans in which companies pay directly for the medical expenses of their employees. More than 100 million people in the United States have what’s called self-funded employer-provided medical coverage, according to a 2019 report from America’s Health Insurance Plans, a trade group.
There is broad support from both the Democratic and Republican parties about a need to remove consumers from battles over medical bills. And this support comes from both Congress and the White House.
Many Republicans and Democrats in Congress have co-sponsored several bills that would address surprise billing. President Donald J. Trump also has called for a federal law on surprise medical bills, including holding a press conference on this theme in May 2019. Trump there said surprise medical bills have “left some patients with thousands of dollars of unexpected and unjustified charges for services they did not know anything about and, sometimes, services they did not have any information on.”
At that May press conference, Sen. Lamar Alexander, a Tennessee Republican, told Trump he expected to have a bipartisan bill soon ready for the president’s signature. Alexander is chairman of the Senate’s Health, Education, Labor and Pensions Committee (HELP). So it at first appeared auspicious for critics of surprise billing when the HELP Committee in June 2019 included provisions addressing this issue in a wide-ranging package of legislation, known as the Lower Health Care Costs Act.
But a rift soon became apparent. Alexander’s bill suggested an approach favored by insurers, looking to use regional prices for medical services to settle disputes about out-of-network care. That angered many physicians’ groups, which argue this approach gives insurers an unfair advantage at their expense. They prefer an approach that calls for arbitration in cases of disputed bills.
Over the past year, there has been a lot of talk on Capitol Hill about legislation addressing surprise billing — but very little action. (Congress included a provision in the Families First Coronavirus Response Act that is meant to shield consumers from surprise bills for coronavirus testing. )
At the heart of the issue is a tough choice facing lawmakers. They have to decide which powerful group they will disappoint in addressing surprise billing. Adopting a system using regional prices for medical care, known as a benchmark approach, would please insurers and anger many physician organizations. A federal law calling for arbitration of surprise medical bills would have the opposite effect.
Here are seven tips to help journalists understand and report on surprise medical billing.
Tip #1: Find out what your state has done or tried to do to address surprise medical bills.
There are several online resources to help journalists find data to localize stories about surprise billing.
The Commonwealth Fund has published a roundup on state actions on surprise billing, which this nonprofit group calls “balance billing.” The Commonwealth Fund lays out which states have no protections, some protections or comprehensive protections.
There’s variation among states at risk for surprise bills, according to 2020 research from the Kaiser Family Foundation. Looking at emergency room visits and hospital stays, for example, researchers found out-of-network charges were more likely to happen in Texas, New York, Florida, New Jersey, and Kansas, and less likely in Minnesota, South Dakota, Nebraska, Maine, and Mississippi.
It’s important to note the limits of state laws on surprise medical billing. More than half of the people in the United States gained their health insurance through an employer-sponsored plan in 2018, according to a 2019 report from the Census Bureau. It estimated 178 million of the about 324 million people in the United States had this form of insurance.
But the Employee Retirement Income Security Act of 1974 (ERISA) keeps states from regulating policies for these self-funded employer-provided health plans. (Note: a self-funded plan is one on which the employer bears the primary financial risk, while often using an insurer company to manage the health benefits. Companies also can take part in fully insured plans, where their funds are pooled with those of other customers and used to pay medical bills. “With as many as 60% of individuals with employer-sponsored coverage enrolled in self-insured plans, states are unable to require that surprise billing protections extend to all residents,” the National Governors Association said in a report.
Tip #2: Don’t overstate the findings of academic research.
Reporters need to be cautious about not overstating or misinterpreting what published research has shown about out-of-network billing. There is a growing body of work about how often people with private insurance face out-of-network charges even if treated at a hospital in their insurers’ networks. These out-of-network charges often can result in surprise bills, research shows, but it is still unclear how often hospitals and physicians fully pursue the money initially claimed for out-of-network charges.
It’s also important to be clear about how many people are affected by a surprise bill. There have been a number of headlines suggesting 1 in 5 emergency room patients get a surprise bill, but the research reported in these articles involved a sample of people who were covered by private insurance. That leaves out much of the U.S. population, with government insurance plans such as Medicare and Medicaid covering about a third of the population.
Journalist’s Resource recently published a roundup of research summarizing recent notable studies on surprise billing.
Tip #3: Pay attention to how lobbying influences the political debate about surprise billing.
The Senate Health, Education, Labor and Pensions (HELP) Committee last year set out an initial marker in the congressional debate about surprise billing.
The HELP committee included provisions on surprise medical billing as part of a wide-ranging package of health legislation, called the Lower Health Care Costs Act. HELP’s bill mimicked an approach used in California to address surprise billing. The HELP bill called for settling disputes about out-of-network care by considering in-network rates in the region. The aim was to set payment around the halfway mark, or median, of agreements already in place between insurers and providers of medical care for a service. The bill would direct the Department of Health and Human Services to establish the boundaries of regions used in considering payment.
In response came the so-called “Doctor Patient Unity” campaign. Backed by two large private-equity-funded physician staffing companies, this campaign spent tens of millions on television advertisements and direct mail opposing the benchmark approach to surprise billing, the New York Times reported last year.
The Senate HELP Committee’s approach also angered many medical associations, including those representing physicians most likely to be involved with out-of-network billing. These groups say a benchmark approach benefits insurers, not patients. The American College of Emergency Physicians (ACEP), for example, notes that its members are required to treat patients regardless of what kind of insurance coverage they have. In the view of ACEP, insurers seek to offer only a “low-ball amount” in disputes about out-of-network care. ACEP and other medical associations argue for using arbitration to resolve disputes.
If you cover a regional beat, you can ask members of the House and Senate who represent your audience what they have done on the topic of surprise billing. You can also use the Center for Responsive Politics’ OpenSecrets.org site to see which trade groups have donated to these lawmakers and ask if these contributions have influenced their views.
For this debate, you would want to look at contributions from groups on both sides of the issue of the benchmark approach.
Private equity firms Blackstone Group and KKR & Co., for example, own firms that get paid to arrange staffing for emergency rooms. So these firms stand to lose from surprise billing legislation that uses a benchmark approach. Blackstone’s TeamHealth physician-staffing business argues that insurers and employer groups have been working in recent years to cut reimbursement for emergency medicine.
Insurers like UnitedHealth prefer a benchmark approach. They say this approach removes the financial incentive for physicians to try to remain out of network in order to charge high rates.
Tip #4: Interview doctors and executives for hospitals and insurance plans.
It would be worth asking leaders of hospitals and insurance plans in your region what, if anything, they have done to prevent cases of surprise billing. And you should consider including the views of doctors in your stories.
Physician organizations, such as the American Medical Association (AMA), have suggested lawmakers look at ways to expand the coverage people get from their health plans. In a letter sent last year to the leaders of the House Ways and Means Committee, AMA and more than 100 other physician organizations said insurers should include in their networks “an adequate ratio of emergency physicians, hospital-based physicians, and on-call specialists and subspecialists” to serve their customers.
Many medical associations have said they support a federal law to address surprise billing, preferably one that does not use benchmarks. They prefer arbitration as a means of resolving disputes.
But not all doctors favor the arbitration approach, which critics say allows some doctors to essentially set their own prices. Using arbitration to settle disputes about surprise medical bills removes the incentive for some physicians to negotiate with insurers, Ashish K. Jha, a physician and professor of health policy at the Harvard T.H. Chan School of Public Health, argued in an opinion article for the Boston Globe in December.
“With artificially high charges as the baseline for arbitration, more physicians are tempted to go out-of-network, inflating their billed charges, and getting large payouts from the arbitrator,” Jha wrote.
Tip #5: Be realistic about the political battles in Congress surrounding surprise billing.
Journalists wrote many stories in 2019 about lawmakers’ plans to clear federal legislation on surprise billing for Trump to sign into law. There was bipartisan support in both the Senate and House for addressing this issue. A duo of physician-lawmakers, California Democrat Rep. Raul Ruiz and Tennessee Republican Rep. Phil Roe, built support for using the arbitration approach.
And the Trump administration also publicly supported these efforts throughout last year. At a November 2019 meeting with reporters, then-White House Domestic Policy Council Director Joe Grogan said he hoped Congress would clear legislation on surprise billing by the end of the year. He said there was an “obvious” need for a federal law to address situations where people faced surprise medical bills despite having insurance. Often, these cases arise when people need emergency care.
“They are not in a position to bargain. They are not in a position to fully comprehend in many of these instances what is going on and they need help,” Grogan said.
Yet, leaders in Congress still opted in December to drop their attempt to pass a law on surprise billing. That decision exempted them from having to pick sides in a debate in which powerful groups have opposing opinions — at least temporarily. Advocacy groups such as Families USA continue to press for a federal law addressing surprise billing, as do some members of Congress.
In reporting on surprise billing, you may hear people talk about the savings that the Congressional Budget Office (CBO) estimates a federal surprise billing law would generate. These savings are seen by lawmakers as an enticement for Congress to eventually pass a law on surprise billing. Members of Congress could apply to the estimated savings from ending or curbing surprise billing to offset spending for another federal program.
CBO already has published estimates on potential savings from several measures that would address surprise billing. The Senate HELP’s wide-ranging Lower Health Care Costs Act bill, introduced in 2019, would save the federal government $25 billion over a decade, CBO said. A House bill calling for negotiation would save about $18 billion over a decade, CBO said. A Washington, D.C. firm that employs people who previously worked as staffers in Congress and the Centers for Medicare and Medicaid Services, McDermott + Consulting, has done a summary of pending legislation.
In a May 2020 interview with the Wall Street Journal, Rep. Greg Walden of Oregon cited Congress’ recent decision to require free coronavirus testing as a positive sign for the eventual passage of a law on surprise billing. Walden, the ranking Republican on the House Energy and Commerce Committee, also noted how the Department of Health and Human Services used an administrative step to try to shield people from surprise bills in connection with treatment for suspected or confirmed cases of COVID-19.
Walden noted a “certain irony” with the current federal policies that seek to shield consumers from surprise billing in connection with COVID-19, while leaving them otherwise exposed.
If “you have a heart condition that pops up and you’re out of network, it’s OK? I don’t think so,” Walden told the Journal. “We’ve won the intellectual argument.”
Tip #6. Crowdsource your audience to find people who have experienced surprise billing.
Kaiser Health News and National Public Radio have a running crowdsourced investigation, titled the “Bill of the Month” series. They ask members of their audience to submit medical bills. “Do you have a medical bill that is exorbitant, baffling, infuriating or all of the above? Send it to us and tell us about your experience,” Kaiser Health News says on its website.
The resulting stories from this “Bill of the Month” series detail cases where people received unexpectedly high medical expenses and may serve as a good model.
In reporting on consumers’ surprise medical bills, it’s worth asking your sources to share their paperwork with you. Ask them for their insurers’ explanation of benefits statements and invoices.
Tip #7. Keep your Kaisers straight.
If you’re new to the health care beat, you may be confused by the prevalence of the name “Kaiser” in health care policy and journalism; this reflects the interest of Henry Kaiser (1882-1967), a shipbuilder, in improving U.S. medical care. The Kaiser Family Foundation is a non-profit organization that funds Kaiser Health News, but does not set its editorial policies. Neither organization is connected to Kaiser Permanente, a large health insurance plan.
Journalist’s Resource has a roundup of recent research on surprise billing.
The nonprofit nonpartisan Alliance for Health Policy has posted online a recording of its July 2019 panel discussion on surprise medical billing. This roughly 90-minute recording provides a thorough introduction to the topic. The Alliance also posted a contact list of experts.
The following organizations also offer helpful resources:
In addition, medical specialty groups like the American College of Emergency Physicians and American Medical Association have web pages where they offer their take on surprise medical billing.