Intricacies of Health Insurance in California
…and how to not get fucked by unexpected medical bills.
When you’re on a PPO, you have the choice to go to a preferred provider or not. You definitely want to go to someone who’s preferred since your plan is likely to cover a larger percentage of the costs, and your deductible for the preferred provider would be lower as well.
I recently had some (seemingly) digestive issues. The diagnostic lab work for this ended up costing $2787.00 or so the claim said. But because it was sent to Labcorp, a preferred provider, the amount my insurance company ended up paying was just $172.26 (!). Preferred providers contract directly with the insurance so any billing disputes are directly resolved between themselves.
Even though it’s not actually illegal for in-network providers to bill the patient more than than allowable amount, as set by the health plan, pretty much every contract between you and PPO will not allow the preferred provider to balance bill the patient directly. For instance, my contract has this paragraph:
“Participating Providers agree to accept Blue Shield’s payment, plus the Member’s payment of any applicable Deductibles, Copayments, and Coinsurance or amounts in excess of specified Benefit maximums as payment-in-full for Covered Services, except as provided under the Exception for Other Coverage and the Reductions-Third Party Liability sections. This is not true of Non-Participating Providers.”
But there are many complications. Obviously, if you go to a non-preferred provider, you might get charged some amount at the front desk, and your insurance might pay for a portion. But it’s possible that the provider will send you an additional bill in the mail. This is always something to watch out for.
The less obvious and sneakier situation is going to an in-network facility where the main provider is in network, but someone else helping them like the anesthesiologist or an assistant or nurse during the procedure is actually out-of-network. For the same digestive issues, I had to get an endoscopy last week, a procedure for which I had to be anesthetized. Right before the endoscopy, I was asked to sign a consent form for the procedure where it explicitly said that some people working on me today might be external contractors employed by the hospital. I asked the doctor if this was actually the case, and thankfully, he assured me that the payment I made upfront should be the only thing I am billed for. More on such messy situations here.
All of this is exceedingly complicated, and regardless of verbal assurances provided by doctors, it’s still possible and completely legal to receive a bill in the mail even when you went to an in-network facility. Fortunately, in California, a bill was passed last year, AB 72 (2016). This makes it illegal for out-of-network providers in an in-network facility to balance bill patients. I believe this applies to all health insurance plans that are purchased after mid-2017.
In the case of a medical emergency, for out-of-network providers, it has already been illegal since 2009 to balance bill the patient due to a California Supreme Court decision in Prospect Medical Group Inc. v. Northridge Emergency Medical Group. The crux of the argument here is that every facility is required by law to provide emergency care regardless of patient’s ability to pay, and of course, a patient just dials 911 and often doesn’t have any choice as to where they will end up, and nor should they be concerned with this at that time. Because of these chain of events that are beyond the control of the patient, the risk ought to fall between the insurance company and the facility. The out-of-network provider and the patient’s insurance company have to work something out between themselves, and they can cannot involve the patient in any disputed charges. So, the decision held.
To me, all this feels incredibly unethical. A patient looks up the plan’s website to find a preferred provider, pays the co-pays or co-insurances at the front desk, and then, can still get a bill for a few thousand dollars in the mail. SAD! When you go to an in-network facility, you have a very reasonable expectation that everyone there is in-network. Or in the case of an emergency, obviously the patient should be liable for only as much as the maximum out-of-pocket costs of their health insurance plan. SAD! These are things that ought to be fixed at the federal level, uniformly across the states. Unfortunately, that will probably not happen for a long time. But if you’re in California or New York or the other states that have dealt with this sensibly, you should feel fortunate for not having to deal with this bullshit.
Disclaimer: This post does not constitute legal advice. I am not an attorney. Not even close. If you need legal advice, please contact an attorney directly.
