Unexpected out-of-network medical bills can throw patients into thousands of dollars of debt, especially in Oklahoma. Medical and insurance groups agree something needs to be done to protect patients, but they can’t agree on the details.
Eric McDermott’s mind began to race when he opened his mail and saw a $7,300 bill from the Children’s Hospital at OU Medicine in the spring of 2016.
The letter demanded immediate payment of what the Yukon resident thought were long-settled expenses tied to his daughter’s emergency appendicitis surgery from nearly two years earlier.
McDermott was sure he had the confirmation that the care would be covered as an in-network expense. He had even phoned his insurance company as his daughter was being prepped for surgery.
But the letter shattered that belief. It said Blue Cross and Blue Shield of Oklahoma had reevaluated the claim and determined he now owed nearly 15 times the $500 he had paid as a deductible.
“I was completely blindsided,” he said. “How can you possibly plan for that? Nobody just has $7,000 laying around.”
In McDermott’s case, the bill was eventually dropped – which he credits to the exposure he got from testifying at a legislative hearing on medical billing in 2016, and to his spending about 80 hours on the phone arguing against the charges.
Thousands of other Oklahomans ending up paying such bills, making the issue of surprise medical charges a pronounced one in the state.
The practice, also known as balanced billing, occurs when a patient inadvertently or unknowingly is treated by a provider that is out of their insurance network. This often occurs in emergency situations in which patients have little or no choice in choosing the surgeon, anesthesiologist or other provider.
A recent study by the Peterson Center on Healthcare and the Kaiser Family Foundation found that one in five emergency room visits in Oklahoma resulted in at least one out-of-network charge for patients with employer-sponsored health plans. That rate was among the 10 highest in the country.
And despite several failed legislative attempts in recent years, Oklahoma is now one of 25 states without laws protecting patients against out-of-network surprise bills.
Oklahoma’s medical providers, insurance companies and regulators are all in agreement that state law on surprise billingneeds to be changed to safeguard patients. But questions remain as to whether all the special interests can agree on the details and break the legislative logjam.
“I think we are at point where we have to get this worked out this coming session,” said Rep. Marcus McEntire, R-Duncan, who sponsored legislation to reduce surprise billing last session. “And if we can’t get something all the parties can agree on, we have to remember we represent the people and we have to do their bidding.”
Unexpected Billing on Rise
Surprise medical billing is not new in Oklahoma.
Oklahoma Deputy Insurance Commissioner Mike Rhoads said the department’s consumer assistance division frequently fields complaints from consumers who discover a surprise bill.
”It is a problem,” Rhoads said. “The complaints sometimes come in batches, but they are pretty persistent.”
Rhoads said the issue has only gotten worse in the past several years because many insurers are restricting their in-network providers in an attempt to keep their costs down.
The trend mirrors a national one, with data showing that out-of-network billing increased from 32% to 43% of emergency department visits, and from 26% to 42% for inpatient visits, from 2010 to 2016, according to a Stanford University study published this summer.
The study also reported that the average cost per patient has increased, from $220 to $628 for emergency room visits and from $804 to $2,040 for in-patient visits.
Patients Stuck in Middle
Mark Engle, an Oklahoma City lawyer who specializes in insurance litigation, said his law firm sees a steady stream of clients who’ve been affected by surprise medical bills.
His law firm, like many others, can take cases on a contingency basis if there is a strong legal argument that the hospital bill was unwarranted. But under current state law, he said, there are many cases that are simply unwinnable.
“If there is an improper denial, those are good cases – we can finance it and we’ll do really well on that and so will the patient,” he said. “But in different circumstances, you can’t really pursue them.”
Like McDermott, many Americans say they can’t easily absorb an unexpected medical bill that can run in the five or six figures.
A 2018 study by the Commonwealth Fund found that just under half of working-age adults surveyed said they would not have enough money to pay a $1,000 surprise bill within 30 days.
Medical debt can have long-term consequences for patients. An Oklahoma Watch investigation published in August found that dozens of Oklahoma hospitals sued frequently and often asked courts to garnish patients’ wages over unpaid medical bills.
But the stakes are also high for medical providers and states like Oklahoma that are chronically plagued with a shortage of doctors and other specialists in key parts of the state.
“You can’t have a system where you have whomever is providing the service doing that work for nothing,” said Pam Dunlap, executive director of the Oklahoma Society of Anesthesiologists. “But we also know we can’t have exorbitant bills for patients, so it’s all about finding a balance.”
Struggling to Pass a Law
As federal legislation on surprise billing remains stalled in Congress, states have increasingly looked to pass their own protections.
In each of the last three legislative sessions, Oklahoma lawmakers have introduced bills aimed at curbing the surprise billing. All failed to pass.
That includes a 2017 bill to require hospitals to notify patients if services are out of network and, if so, provide a good faith estimate on costs. The bill passed the state House on a 93-0 vote but failed to get a vote in the Senate.
In this year’s session, lawmakers considered a bill to create the Out-Network Surprise Billing Transparency Act.
The legislation would have blocked surprise billing unless a patient signed an agreement acknowledging they are about to receive uncovered out-of-network care. It also would have set up an independent arbitration process led by a third party chosen by the Oklahoma Insurance Department to settle billing disputes between medical providers and insurers.
The 36-page bill didn’t work its way through the legislative process. Instead its language was swapped into a separate bill during the final weeks of the session.
But time ran out, with the proposal never receiving a vote in the House or Senate.
Seeking a Compromise
The Oklahoma Insurance Department, the Oklahoma State Medical Association and the Oklahoma Hospital Association were among the groups that supported the transparency act.
But some insurers balked at details in the plan, particularly how the independent arbitrators would use benchmarking to determine how much insurance companies should pay the providers.
“Naturally, when the Legislature seeks to regulate a reimbursement process or amount, it will generate intense debate,” said Laura Brookins Fleet, executive director of the Oklahoma Association of Health Plans.
Fleet said insurers agree with providers that patients should be protected from surprise billing. But, she said, “unreasonably high payment standards for out-of-network care will raise consumer premiums and erode networks.”
Outlook for 2020
Representatives of the insurer and medical groups said there have been sporadic discussions since on finding a compromise.
Although details haven’t been disclosed, there appears to be a unified belief that legislation will again be up for debate in 2020.
“There are a lot of players in this deal and it’s not going to be easy,” McEntire said. “But I think something gets done.”
The risk is that the priorities of politically powerful interest groups could overshadow the need to protect patients, said Engle, the Oklahoma City lawyer.
“All your lobbyists are, of course, are going to be for the providers or insurance companies,” Engel said. “You don’t have patient advocates up there, and we just need someone to take their side.”