Kentuckians hit with “surprise bills” for out-of-network health care could find relief in a Senate bill sponsored by state Sen. Ralph Alvarado, R-Winchester.
Senate Bill 79 is meant to protect patients who are inadvertently treated by doctors or institutions not in their health insurance company’s approved network. For example, people sometimes are rushed to an out-of-network hospital for emergency treatment, or they schedule surgery at an in-network hospital only to discover, after the fact, that the anesthesiologist on duty that day was not in their approved network.
In each case, the outcome is the same: Unexpected medical bills for thousands of dollars that insurance companies won’t pay. A 2015 survey by the Kaiser Family Foundation found that one-third of non-elderly Americans struggling with medical debt cited surprise out-of-network bills as a factor.
“It happens all too often that a consumer ends up with enormous medical bills through no fault of their own,” said Emily Beauregard, executive director of Kentucky Voices for Health, in an interview this week. “The simple solution is to hold consumers harmless when it’s a situation that they cannot control. Sen. Alvarado’s bill does that.”
The measure would protect patients who did not choose to see an out-of-network provider by limiting their financial liability to whatever their usual cost is for in-network care, such as a deductible or copay.
The out-of-network provider would directly bill the patient’s insurance company, not the patient. The provider would be paid a fee equivalent to 80 percent of whatever the average reported payment is for that particular service in that region. The Kentucky Department of Insurance would designate a nonprofit to collect payment information to be used for this purpose.
“You would pay what you normally expect to pay, and then the rest of it would be negotiated between the insurance company and the provider, and you, the patient, would be out of it, which is as it should be,” said Alvarado, who is a doctor. “We need to take care of individuals in their moments of vulnerability.”
Alvarado said he has a legislative intern this winter who was suffering from severe abdominal pain that turned out to be acute appendicitis. The intern went to the emergency room at a Richmond hospital near his home.
“They told him, ‘Hey, we’re out-of-network from your insurance company,’” Alvarado said.
“So the kid, to avoid having to pay however much more, got back into his car and drove to Georgetown where he found an in-network hospital to get his appendix taken care of. That’s frightening. You shouldn’t have to do that. If that thing had burst, it would have been a much bigger deal. And yet you have people having to take those kinds of risks to avoid these ridiculous charges,” he said.
Alvarado’s bill is expected to get a vote next Tuesday before the Senate Banking and Insurance Committee.
The committee’s chairman, Tom Buford, R-Nicholasville, agreed to co-sponsor the bill. Buford said Tuesday that insurance companies and hospitals have raised concerns with him about the out-of-network payment rate in the bill, so he expects changes in the form of a committee substitute.
At a committee hearing last week, health insurance lobbyist Rosmond Dolen said she objected to the bill because it would discourage doctors from joining insurance networks, since they would get paid a fee regardless of whether they were providing in-network or out-of-network care.