PHOENIX — Arizonans are finally going to get some protection from “surprise” hospital bills.
On Tuesday, Jan. 1, a new state law takes effect designed to help people who think their hospital visit is covered but later find themselves facing a bill from a health-care provider that doesn’t accept their insurance.
The new law won’t erase the bill entirely. And some kinds of health-care bills remain outside the scope of the statute.
But Stephen Briggs, spokesman for the Arizona Department of Insurance, said if patients are careful and follow the process, they could end up sharply cutting their liability with no obligation to pay the balance.
At the heart of the issue is how hospitals operate.
It used to be that a patient would simply ask his or her insurer which hospitals were considered “in-network” where their procedure would be covered. That pretty much guaranteed the costs would be picked up, leaving the patient only the normal copay or deductible.
Now, however, hospitals often contract with outside doctors who are not hospital employees. That, said Briggs, can lead to surprises. For example, a woman who gives birth at a hospital that is in-network and pre-approved eventually gets a bill from an anesthesiologist or another specialist who participated in the delivery but who was not in-network. That’s a “surprise bill,” Briggs said.
It’s a bill the insurer won’t cover that could run into the tens of thousands of dollars.
Until now there has been no legal remedy for patients.
Under the new law, a patient can submit a request through the Department of Insurance for dispute resolution. While the state agency does not get involved in resolving who is correct, it can at least screen the complaint to determine if the invoice qualifies under the law as a surprise out-of-network bill that can be disputed.
If the invoice qualifies, the department will help set up an informal telephonic settlement conference involving the insurer, the medical provider and the patient. “The intent behind this was to see if we can’t get the insurance company and the doctor, the provider, to agree on a cost,” Briggs said.
If that produces no resolution, the issue goes to arbitration.
But here’s the key point of the measure: No matter what is decided there, the patient’s maximum liability is what he or she would have otherwise paid had the procedure been covered. That means simply any copay, deductible and any other cost-sharing requirements under the patient’s insurance policy.
Still, there are some significant exceptions.
First, the disputed bill must be at least $1,000.
Second, the law does not apply to anyone enrolled in a health-maintenance organization. Briggs said this is based on the premise that once an HMO has approved some pre-scheduled procedure, it has declared that it will pay for the expenses.
But the most significant is that patients can dispute a charge only if they have not been informed, ahead of time and in writing, that certain specific services will be provided by an out-of-network doctor and an estimate of the total costs to be billed. If they have been told and they go ahead with the procedure, they’re on the hook for the bills.
That, however, does not apply if the hospitalization was the result of an emergency, even if the patient was given the notice but did not have a reasonable amount of time to review it.
Still, Briggs said that, even with the new law, patients considering elective procedures should probably do some research on their own, ahead of the hospital stay, to ensure that all the medical care they expect to get is from in-network providers and will be covered by their insurance.