Surprise out-of-network bills are hurting workers’ wallets and employers’ bottom lines

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Out-of-network healthcare can be costly and is often something patients try to avoid. But when an emergency occurs, a visit to an in-network hospital can still result in an unpleasant surprise — a highly expensive medical bill because the patient was treated by an out-of-network physician.

Surprise billing and related costs are increasing among inpatient admissions and emergency department visits to in-network hospitals. From 2010 through 2016, 39% of more than 13 million trips to the emergency department at an in-network hospital by privately insured patients resulted in an out-of-network bill, a new study published by medical journal JAMA Internal Medicine finds.

“This is becoming a bigger and bigger issue,” says Kim Buckey, president of client services at DirectPath. “We'll probably see more employers working at state and federal level to put some pressure on their representatives to do something about this. They're paying their share of these higher out-of-network costs and it's hitting their bottom lines as well as their employees.”

See also: Are surprises ahead for legislation to curb surprise medical bills?

Nearly half of Americans have less than $400 on hand to cover an unplanned expense or emergency, according to the Federal Reserve Board. Unexpected, expensive medical bills may put a financial strain on employees and affect their wellbeing.

“It really has a huge effect on your stress level and your productivity because you're worrying about this issue outside work,” Buckey says. “So not only are employers having to pay more, they're also suffering a loss because of the reduced productivity of their employee dealing with this issue.”

Resolving a medical bill can be very time consuming. Most medical billing office and hospital office hours are from 9 a.m. to 5 p.m., and employees may have to take time off work to resolve the bill, or to make phone calls. In addition, they also have the financial pressure of figuring out how to pay for it.

“If you don't pay that bill or at least reach some sort of agreement, it can affect your credit rating,” Buckey says.

For U.S. patients with private health insurance, the incidence of out-of-network billing at in-network hospitals substantially increased between 2010 and 2016, the JAMA study finds. The potential financial consequences of out-of-network billing in both settings nearly doubled during this period, and the top 10% of patients paid more than $1,000 for emergency department visits and more than $3,000 for inpatient care, suggesting a growing risk to patients of incurring burdensome unexpected out-of-network bills.

See also: Transparency in healthcare: The case for an employer bill of rights

As of June, 25 states had enacted legislation providing patients some protection against out-of-network billing, ranging from dispute resolution processes to provisions holding the insurer responsible for the balance-billed amount. In other states and in Congress, pending legislation would curb surprise medical bills.

Industry experts have been vocal about the need for more price transparency in healthcare.

“Because our healthcare system doesn’t give us a price upfront, literally every bill is a surprise,” says David Contorno, founder and CEO of North Carolina-based benefit consulting firm E Powered Benefits. “Where else do we consume anything in this country where we don't know the cost and quality of the good or service they sell until after we consume it? There's nothing, every business would take advantage of their customer.”

As more conversations take place at the federal level about how to put an end to surprise bills and the steps that can be taken to increase healthcare price transparency, employees need to know what to do in the event that they receive a surprise medical bill, says Kim Buckey.

There are several precautionary steps employees can take before, during and after a medical procedure to prevent receiving a surprise medical bill, Buckey says. It includes being aware of your state’s laws about surprise medical bills, taking notes while receiving treatment, and inspecting your medical bill for mistakes.

“Most people aren't gonna know that there's really no way to easily tell whether that company is in network or not,” she says. “There is a certain amount that you can do to protect yourself going in, but sometimes you really have no control and the best you can do is advocate for yourself after [receving the bill].”

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