N.H. proposal aims to cut down on surprise hospital bills

Monitor staff
Monday, March 05, 2018

Even at first glance, Josh Kattef knew the bill looked off.

The Hopkinton resident was home recovering from a relatable kitchen injury: a knife into a finger, intended for an avocado. Kattef’s cut was a deep one, requiring a drive to Concord Hospital, stitches, and a blur of medical professionals and clipboards. Now he was looking through the bill from the hospital, thrown by a key phrase: “out-of-network” care.

Kattef, an Anthem customer, knew that Concord Hospital as an institution was covered in his network. But the invoice cited the involvement of an additional physician, a member not covered by the network who the bill said attended to Kattef at the hospital. The addition of that doctor, the bill said, was adding to the final cost.

Facing a $3,500 fee, he called up his insurance carrier to sort the situation out. He didn’t remember consenting to out-of-network care.

“I was like, ‘You’ve got to be kidding; this can’t be how the health care system works,’ ” he said.

Kattef was able to talk the insurer down to $1,200 – the actual cost of the in-network care under his deductible. But it was a narrow miss, and a situation that’s proving increasingly common.

The practice is known as “balance billing,” and thousands across the country have suffered it: hidden fees added by in-network hospitals quietly employing out-of-network specialists. It could be a urine or blood test sent to a facility not covered by the insurance plan. It could be an anesthesiologist assisting an in-network surgeon and charging for the service later.

The insurance company picks up the tab for the in-network services it’s bound by contract to cover. Then the hospital, facing a unpaid balance from the out-of-network care, passes on the remainder to the customer. In most cases, the patient – now strapped with bills that are hard to evade – had no idea what to look for in the first place.

A new bill heading to the House floor this week seeks to address the trend, banning the billing practice for New Hampshire consumers and forcing carriers and hospitals to sort out the unpaid costs themselves.

Research indicates the problem is not insignificant. Nationally, about 9 percent of all inpatient admissions result in a surprise bill – or 20 percent among admissions through the emergency room, according to a a 2016 study in Health Affairs.

In New Hampshire, specific figures are harder to come by. But a five-member legislative study committee found that while testimony indicated the problem isn’t widespread in the Granite State, “the potential for surprise bills sent to the patient is substantial when the situation exists.”

That committee, headed by House Finance Chairman Neal Kurk, R-Weare, ultimately recommended a range of options.

Lawmakers could prohibit balance billing from out-of-network providers outright. They could keep the present system but require that each patient be notified of the risk of additional charges. Or they could find a middle ground, allowing the practice but setting limits on the amount that the outside provider could charge.

Whatever the approach, the committee wrote in its report, consumers should be “held harmless” – not be put on the hook financially for the extra charges. Instead, negotiations should be between the insurance carrier and the out-of-network hospital, which are well-positioned to find a “commercially reasonable” rate, the committee said.

Now, legislation drafted by that commission seeks to put force behind its findings. House Bill 1809 would prohibit balance billing for those who receive networked care – for practical purposes, almost all private insurance plans, according to Tyler Brannen, director of health economics at the New Hampshire Insurance Department.

The proposed law would cover four services – anesthesiology, radiology, emergency medicine and pathology – each associated with surprise billing. As long as a patient visits an in-network hospital, he or she may not be subject to any more hospital charges than their existing co-pays and deductibles, according to the bill.

As for the rest of the invoice? That would be up to the providers and insurance carriers to sort out. Under the proposed law, the parties can come to any arrangement that is “commercially reasonable,” meaning one that lines up to similar charges for the same service by other providers in the state. The state insurance commissioner would get the final say on whether the rate complied.

Already, the bill is dividing the industry. Insurers say they’re supportive, though they’re pressing for the state to provide for a “default” reimbursement rate in case negotiations fall apart.

Providers see something different: a process tilted against them.

“I think the way this is set up is heavily biased towards the insurance carriers,” said Jim Potter, executive vice president of the New Hampshire Medical Society.

The real problem, Potter said, is the Insurance Department’s decision to allow such narrow insurance plans to begin with.

Still, Kattef said the bill, recommended by the Commerce Committee, 18-2, is a step to address an unfair system.

“Until you experience it, you don’t care, and then once you experience it, you’re like, ‘This is so obvious,’ ” he said. “It’s not a partisan issue. It’s not a free-markets issue. It’s not a lobbying issue. It’s just an obvious issue where the consumer is getting the short end of the stick for something beyond his control.”

(Ethan DeWitt can be reached at edewitt@cmonitor.com, or on Twitter at @edewittNH.)