The $83,000 Finger: Insurance May Not Protect You From Large Medical Bills

Think you're covered when it comes to your medical bills because you have good health insurance? Don't be so sure.
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By Gerri Detweiler

Think you're covered when it comes to your medical bills because you have good health insurance? Don't be so sure. The "out-of-network" trap can leave you with costly medical debt that could, in turn, ruin your credit if you don't pay it off quickly.

Just ask Julie Garrison from North Carolina, who shared the following story in response to my recent article about costly medical bill traps:

I went to the emergency room at a hospital that was listed as a PPO on my insurance and saw a Physician's Assistant for a fairly uncomplicated procedure. I found out after I received my bill that I was treated by an off-network medical group. If I had been on network, my bill would have been $66, but this off network provider is insisting that I should pay $367. I would not have gone to this emergency room if I had known I would be charged off network fees!

Apparently I signed a statement where the possibility of off-network care was in the fine print. I feel that I should have been informed that the Physician's Assistant was not providing care under the umbrella of the hospital. I have tried speaking with the hospital, the off network group, and my insurance company, to have these fees reduced, but have not been successful. At this point, I am expecting to hear from a collection agency in the future. Do you have any advice for me?

I consulted with Mark Rukavina, a health care expert with The Access Project, to find out how common this problem is. "This is an all-too-familiar story," he said. "Patient goes to an in-network hospital and is seen by an out-of-network provider; shocking bills follow."

The extra charges Julie encountered are small potatoes compared to some that other patients have been charged. A recent report by the New York State Department of Financial Services, "An Unwelcome Surprise: How New Yorkers Are Getting Stuck With Unexpected Medical Bills from Out of Network Providers", described a complaint it received in which a heart surgery patient "confirmed that the hospital and surgeon participated in his insurer's network, meaning the consumer would only be responsible for a co-payment. Yet without (his) knowledge, an out-of-network surgeon assisted in the surgery. The consumer thus was responsible for paying a $7,516 bill from the out-of-network surgeon."

In another, a consumer went to the emergency room at a hospital participating with his insurance to have his finger reattached after it was cut off in a table saw accident. According to the report, he "received an $83,000 bill from the non-participating plastic surgeon for reattaching his finger," even though he went to an in-network ER.

The report details what it calls "unacceptable opaqueness in the health insurance market." Among the problems noted:
  • It is very difficult, if not impossible, for patients to shop around and compare the out-of-pocket costs of many procedures.
  • There is often a lack of disclosure, including provider directories that may be out of date.
  • Fees for emergency care of often excessive, and some providers "appear to take advantage of the fact that emergency care must be delivered."
  • In-network providers aren't always available to provide the care patients need.
  • Some insurance companies have reduced coverage for out-of-network providers.
The report also points out that even consumers who shop around and are careful about trying to stay within network can be
. "In fact, surprise bills often occur when a consumer schedules health care services in advance. Consumers with health insurance coverage for out-of-network services are not immune from this problem."

As things currently stand, patients typically have fewer rights when it comes to challenging a $10,000 medical bill than a $100 credit card charge. Julie argues, "In any other business, this would be considered fraud!"

Julie asked me what I would do if I were in her shoes. I told her that I would probably pay the bill to avoid possible damage to my credit scores, and then complain to everyone I could think of: the Better Business Bureau, the hospital administration, my local newspaper and my legislators in Washington. She has decided to stand firm, though. "I am willing to pay $66 which is what I would have paid if the provider was on my network. I am willing to take the hit on my credit if I do not pay the $367. "

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