Taking the Surprise Out of Medical Billing

Steve Avery, president and chief client officer, abeo, breaks down the rates of surprise billing within organizations, and provides some best practices for providers who want to ensure patients are prepared to meet all of their financial obligations. 

Podcast Transcript:

Welcome back to "Pop Health Perspectives," a conversation with the Population Health Learning Network where we combine expert commentary and exclusive insight into key issues in population health management and more.

Today we are joined by Steve Avery, President and Chief Client Officer of abeo. He breaks down the rates of surprise billing within organizations and provides some best practices for providers who want to ensure patients are prepared to meet all of their financial obligations.

Steve?

Steve Avery:  I'm Steve Avery and I'm the president and chief client officer of abeo Management Corporation. I'm one of the co-founders of abeo. I've been with the business for 13 years, but I've been in this type of business for the last 35 years.

abeo is an interesting company. We provide billing, business services, advisory services, and technology for physicians that work inside of a hospital. Think anesthesiologist, intensivist, hospitalist, neonatologist, physicians like that. Those that work in a hospital but don't have an office setting. Those are typically our clients.

Can you first discuss what surprise billing is and what are the major impacts of it?

Steve:  Surprise billing is a term that's been coined to describe an unexpected bill from a physician that provides services to a patient in a hospital setting. For example, you could see that if you take a family member to the hospital. The hospital was recommended by your insurance company.

Let's say, for instance, you're there for an emergency room visit. You pay for your emergency room visit, pay your copay to the hospital. Then you find out some weeks later that the emergency room physician does not contract with your insurance company.

The bill is very large because you incurred out-of-network copayments: large, out-of-network deductibles that you were not expecting. The expectation was that the physician who treated you would accept your insurance, just like the hospital did.

That's the surprise. There's no warning from the insurance company, no warning from the hospital, and no warning from the physician that you were going to get this large bill.

What are some of the major reasons that patients are hit with surprise billing?

Steve:  The reasons could be many. Some are innocent, for instance you may have an insurance company that is not prevalent in the area where you live. Usually, these are small insurance companies that you may have picked up through an employer, but they're not predominant in the town where you live.

Remember, there are hundreds and hundreds of health insurance companies and products. You may not have an opportunity to contract with all the insurance companies that could possibly walk through the door of the hospital.

The second is, and it's also innocent, the physician, in my earlier example, may be in renegotiation with the insurance company. At that particular moment that you visited the emergency room they were not contracted with that particular insurance company.

Sometimes renegotiations take a while. Sometimes you may be not contracted with that insurance company, which causes part of the problem.

There could also be less innocent reasons, where the physician chooses not to be contracted with an insurance company and may have discovered that it's to their financial advantage to remain non-contracted. Therefore, the patient may be bearing the brunt of excess cost unnecessarily.

Those are some of the reasons that people may be hit with a surprise bill.

Can you highlight some common misconceptions related to surprise medical billing, specifically in the anesthesiology market?

Steve:  My view is formed by the clients that we serve. I believe that anesthesiologists are being labeled unfairly as participating in some of these less innocent sides of surprise billing as a matter of normal business operations.

This is just not true. We represent over 5,000 anesthesiology providers across the country. The percentage of those that contract with insurance companies that are representing their community is in the high 90s on a percentage basis.

The difference, where they aren't contracted, is two of the exceptions I mentioned earlier: When the physician and the insurance company are in renegotiation and currently do not have a contract, or when the insurance company used by the patient is not normally seen in the hospital where the physician serves.

Those are the reasons for our providers not being contracted. The anesthesiologists are unfairly marked with this. It's not a broad-based problem. It's specific.

You can understand when somebody receives a rather large bill, it's very important to them. I've had this happen to me before with a family member. It's not very pleasant. You're very unhappy about it. To say that it impacts the broad majority of anesthesiologists across the country is just not true.

Do you have some best practices for providers who would like to take that "surprise" out of medical billing?

Steve:  In order to take the surprise out of the billing experience, the physician needs to do several things. First, they need to work very closely with the hospital on an ongoing basis to identify all the insurance companies that may have potential patients in their area and work expeditiously to try to get contracts with those payers, even if they're on a very small percentage basis.

It's easy to contract with the large payers in an area where you already have a high percentage of patients that may be coming to the hospital, but it takes some work to identify the smaller insurance companies that we're not aware of and then work hard to contract with them.

The second thing is if you're in the two situations that I explained earlier, you need to work with the patient's insurance company to reach a fair and equitable arrangement. You need to work with the patient and have them help resolve the problem with their insurance company.

If we're in the midst of renegotiation or if I don't have a contract with that insurance company, the physician needs to reach out to the patient, get the patient involved, and have them help us work with their insurance company to try to reach a fair and equitable resolution to the problem.

For the most part, that works. With people that get involved, people that reach out to the physician, and physicians willing to resolve the problem, you can usually reach a fair and equitable situation.

The third thing is to remember to be fair with the patient. It doesn't help anybody. It doesn't help anybody's reputation, either the physician's, the hospital, or the insurance company, if we're trying to not reach a fair settlement and it appears to the patient that they've been treated unfairly. That's when a patient usually gets upset.

Those are things you can do to try to resolve the situation.

What are some steps organizations can take to ensure patients are prepared to meet their financial obligations?

Steve:  What would be the right thing to do is to have the insurance company provide more warnings to their subscribers that a physician or a physician group in their area is not under contract. That would take some of the surprise out.

The hospital also has an obligation to the patient to warn them that a physician group is not contracted with their payer at the time they're receiving services.

I think, with respect to surgeries and other planned encounters at the hospital, surgeons and other physicians that are referring patients to the hospital have the same obligation. Inform the patient. It's the right thing to do. This will eliminate a great deal of the surprise that occurs.

Everybody has to work together. I think there's been too much of a, "That's not my problem. That's the problem of the physician that's not contracted." We've got to stop that because otherwise the patient's the one that gets hurt. Then, it causes other problems with the hospital, with the surgeon, and with the provider that's not under contract with that insurance company.

Finally, just overall, is there anything else that you would like to add?

Steve:  I think the easy solution that people are looking for is to have the government step in and legislate a solution as a response to the surprise billing. The problem with that is when the government legislates, there's always a little bit of an uncertain outcome. They don't look at what all the impacts are.

Clearly, they're going to legislate that patients shouldn't receive a surprise bill and define that, but they also need to understand what that does to the physician, the hospital, and the insurance company. It may be certain that they eliminate it, but the consequences is they create disadvantage for the other participants in the process.

If you look at some of the legislation that's already in place, 25 states have surprise billing legislation right now. Many of the other states are also looking at surprise billing legislation.

Some of these really deal with the emergency situation, where a patient arrives at a hospital under an emergency situation. They don't have time to understand if their insurance company is contracted with them. This is a matter of life and death.

They should not have that kind of surprise encounter as part of their experience with the hospital. I think legislation that answers that question is very fair. It's fair for the patient. It's fair for all the participants.

When it goes beyond that, where they start working to create other solutions, that allows the insurance company to dictate pricing, to dictate when the provider can bill a patient; I think causes other problems. It puts too much weight behind what the insurance company can do, which disadvantages the physician and the hospital.

I think we have to be very careful about that. I think that as we look to the federal legislation, there seems to be a lot of lobbying activity from the insurance companies to support the legislation. You have to ask the question, "Why? Who's being disadvantaged by the legislation?"

Some of the discussion that's occurred so far is identifying that the physicians would be unfairly treated under these plans. We have to put in better mechanisms to allow for the physicians to represent themselves in a situation where it may be more one-sided or may be dictated by the insurance company or by the state or federal government.

I think we need to keep an open mind. The problem really resides in some very innocent actions that may cause a surprise bill. Let's not try to kill the mosquito with a sledgehammer. Let's look for solutions that helps everybody reach a fair and equitable solution to the problem.