MEGAN THOMPSON: After suffering a heart attack 20 years ago, Leigh Lehman of Hillsdale, NJ, does what he can to eat right and stay in shape. But the 64-year-old computer consultant still has occasional health scares. Last summer, doctors told him he needed a quintuple heart bypass. Before the procedure, he confirmed both the Valley Hospital, in Ridgewood, NJ, and his surgeon, accepted his Aetna Insurance, which he gets through his employer, a small consulting company.
LEIGH LEHMAN: But a few weeks later, after the surgery, I got a bill in the mail.
MEGAN THOMPSON: The surprise bill was for nearly $2,200. It was from a critical care doctor in the intensive care unit who did not accept Lehman’s insurance.
LEIGH LEHMAN: Out of nowhere, somebody who you never heard of, I don’t remember meeting, sends a bill. Why is he not accepting the insurance? Why is he out of network?
MEGAN THOMPSON: Lehman says he contacted the hospital and insurance company, but they told him there was they nothing they could do to reduce the bill. So he dug into savings to pay it.
LEIGH LEHMAN: It’s a little stressful. You’re trying to recover. It’s major surgery. I mean, I felt like I was hit by a truck.
MEGAN THOMPSON: Something similar happened to Andrew Heymann, an accountant from Hackensack, New Jersey, who had health insurance through his employer from Anthem Blue Cross-Blue Shield.
ANDREW HEYMANN: There was blood and glass all over this part of the parking lot.
MEGAN THOMPSON: Two years ago, when he was helping a neighbor move, a large glass table shattered, and a shard of glass sliced into Heymann’s left ankle. An ambulance took Heymann to the closest emergency room — at Hackensack University Medical Center – which he knew was in-network. His ankle wound was so deep, the ER called the plastic surgeon on duty.
ANDREW HEYMANN: And he came in, and sewed up my leg in probably about 10 minutes.
MEGAN THOMPSON: But that surgeon did not accept his insurance. Heymann received what’s called a “balance bill.” The doctor charged close to $6,000. Blue Cross covered about $860. And Heymann was stuck owing $5,000.
ANDREW HEYMANN: I’m thinking there’s no way I’m going to pay this. This is insane. And it’s kind of almost like, whatever if you want to call it, false advertising, when you get some kind of a crazy bill from someone who’s not in the network, and you really had no control over the fact that they would be there.
MEGAN THOMPSON: The hospital wouldn’t discuss the specifics of Heymann’s case, but said it recognizes “the current system is not optimal.” After 6 months of fighting his bill and appealing with his insurer, Heymann discovered his employer – a large education company – was supposed to cover the charge, and the company paid it off.
MEGAN THOMPSON: Chuck Bell, Programs Director at Consumers Union, the advocacy arm of Consumer Reports, says the frustration of surprise medical bills is growing.
CHUCK BELL: We’ve received, literally, thousands of stories from consumers all over the country that are having this problem.
MEGAN THOMPSON: Last year, Consumer Reports found that 30 percent of Americans with private health insurance have received a bill where their plan paid less than they expected. Of those, 23 percent said they got a bill from a doctor they did not expect to get a bill from. And 14 percent said they were charged higher “out-of-network” rates by doctors they thought were in-network.
MEGAN THOMPSON: Bell says one reason for surprise medical bills may be that insurers are increasingly offering “narrow networks” — cheaper insurance plans that give patients fewer doctors to choose from.
CHUCK BELL: But the problem has been that it’s very hard to actually use your narrow network in practice. When you actually go to a hospital or an emergency room, you inevitably run into physicians and providers that are out-of-network, and then those costs quickly mount up.
MEGAN THOMPSON: Bell says surprise bills have been a problem for a long time, but it’s possible more people are getting them, because more people are insured. Since the Affordable Care Act passed in 2010, 20 million more Americans have health insurance.
CHUCK BELL: And probably most of those patients do not have very rich or generous out-of-network coverage. So, when they get a bill, they may have to pay the whole thing by themselves.
MEGAN THOMPSON: Leigh Lehman’s $2200 bill for his heart bypass wasn’t his first surprise bill – the year prior, he was hit with a $4500 bill for a visit to an emergency room that turned out to be out-of-network. Lehman sold some property and used money set aside for his daughter’s college tuition to pay his bills.
You make a good salary.
LEIGH LEHMAN: Yeah.
MEGAN THOMPSON: You have what you called good health insurance.
LEIGH LEHMAN: Yes.
MEGAN THOMPSON: Did you ever think you’d be struggling to pay medical bills?
LEIGH LEHMAN: No. It’s probably going to take a couple of years before we get back on track.
MEGAN THOMPSON: We wondered how patients like Lehman end up seeing out-of-network doctors at an in-network hospital.
Neurologist John Nasr has a private practice in New Jersey and sees patients at the Valley Hospital – where Lehman got his bypass. But Nasr is not on staff there. Instead, to get paid what he thinks is a fair rate, he has to negotiate his own insurance contracts. As a result, he’s not in-network with every plan the hospital accepts.
JOHN NASR: Over the years, insurance companies have typically reduced payment, year after year, to the point that many insurance plans pay below what Medicare pays. And this becomes unsustainable. Doctors can’t practice like that.
MEGAN THOMPSON: Nasr says even when he is in-network, some patients with high deductibles are surprised by what they owe. When he is out of network, Nasr is permitted to bill at a higher rate to the insurance company and patient.
So, a patient’s done his or her research. They found a hospital that’s in-network. They’ve found a provider that’s in-network. But then they end up seeing a doctor like you, who’s not in-network. The patient would probably say, “This isn’t fair.”
JOHN NASR: Yes, it is not fair for the patient, I agree with you. As a practice, our policy is to work with the patient on out-of-network payment. So, we understand it is a hardship for the patient when they are seen urgently by a provider who’s out-of-network, and they did not anticipate that.
MEGAN THOMPSON: Doesn’t the doctor then have a responsibility to inform the patient, ‘Hey, I’m not in your network?’
JOHN NASR: If I’m taking care of you in an emergency, I don’t even look at your insurance. Because we don’t want anything we do to be swayed by insurance.
MEGAN THOMPSON: And neither do hospitals, says Joe Devine, the President and CEO of Kennedy Health, a chain of hospitals and clinics in southern New Jersey. He says Kennedy can only require its contracted doctors to participate with the same networks it does.
JOE DEVINE: We cannot legally force the independent doctors to participate in contracts. Unfortunately, what’s happened is they’re sending bills to patients, and what we’d like to do is come up with a solution where we do not put the patient in the middle of this.
MEGAN THOMPSON: When a patient walks through your doors, doesn’t the hospital have an obligation to say to them, “Hey, you may be in-network at this facility, but not all the doctors you see may be in network.”
JOE DEVINE: In the emergency situation, most people are not thinking about it. We’re not going to have all of a sudden someone come over and say, “Well, you know, you may get an out-of-network bill.” That’s not what we’re here for. When they’ve decided to do an elective procedure, the hospital does have notification forms that actually allows them to understand it and what they may be responsible for.
MEGAN THOMPSON: What does that look like? Is it a letter, a phone call?
JOE DEVINE: We have a voluntary sheet that kind of shows them that they’re out-of-network and what their responsibilities would be. We also have it on our website.
MEGAN THOMPSON: However patients are notified, doctors still complain that they’re out-of-network because insurers don’t pay them enough. But Kevin Conlin rejects that argument. He’s the Chief Operating Officer of Horizon Blue Cross Blue Shield, New Jersey’s largest health insurer.
KEVIN CONLIN: More than four out of every five physicians in the state are in-network with us. So, four out of five find what we make available to be reasonable.
MEGAN THOMPSON: Conlin says carriers also take a hit when doctors and hospitals charge them at out-of-network rates, because there’s no limit to what they can charge. He estimates New Jersey’s insurers pay around $2 billion a year to cover out-of-network care.
KEVIN CONLIN: It contributes significantly to our premium expense that’s absorbed by all New Jerseyans.
MEGAN THOMPSON: And that’s why insurers are pushing the state legislature to limit the amount doctors and hospitals can charge in the first place. But doctors and hospitals strongly oppose that.
JOE DEVINE: So as an industry, we need to make sure we protect the ability for the individual hospitals to be able to negotiate fair rates with the insurance companies.
MEGAN THOMPSON: This stand-off is largely what’s holding up a broader bill in the New Jersey legislature. It’s one of 28 states considering protections for patients against surprise medical bills. 4 Others – Illinois, Florida, New York and Connecticut – have already passed laws.
JOSEPH VITALE: For so many New Jersey families, they just can’t afford it.
MEGAN THOMPSON: State Senator Joe Vitale is a sponsor of New Jersey’s bill. It would mandate most doctors to participate in same networks as the hospital, require doctors and hospitals to notify patients if they are not in network, ban doctors from balance billing and set up an arbitration system to press providers to defend their bills, and insurers to defend their rates.
JOE VITALE: In the end, there’s going to be an understanding, you know, what bill is going to be fair, and what reimbursement will be fair. And if you are extreme in either one of those circumstances – whether you’re the provider or the doctor- or the insurance company – you’re not going to win.
MEGAN THOMPSON: But after years of pressure from consumer groups, and negotiations – including a State Assembly hearing this past week – the bill has gone nowhere.
Why hasn’t this passed?
JOSEPH VITALE: Well the interest groups, whether it’s the hospital system, or the medical society, or the insurance company, we kind of try to, we get to where we’re close to an agreement, suddenly the goalpost shifts a little bit.
MEGAN THOMPSON: So until New Jersey passes a law, patients like Leigh Lehman are largely on their own.
The hospital where Lehman had his bypass wouldn’t discuss the specifics of his case, but said, more than 90 percent of its physicians accept the same insurance that it does, and, it informs patients about the other doctors who may not.
After NewsHour contacted Aetna, Lehman’s insurer, the company reviewed his case. It told us Lehman was not, in fact, responsible for the $2200 balance bill he received. And that it will be reimbursing him for what he paid.
But, Lehman is still paying off that earlier $4500 emergency room bill.
LEIGH LEHMAN: It gets a little crazy. It gets to the point where you’re reluctant to go see the doctor.