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Ban balance-billing, advocate says

By Carol Gentry and Mary Jo Melone
11/3/2009 © Health News Florida 

Sean Shaw, Florida's Insurance Consumer Advocate, says he’s shopping around for a lawmaker brave enough to take on the medical lobby and help him ban “balance-billing,” a common practice that sticks patients with big bills their plan won't cover.

Balance-billing presents patients with the choice of paying a great deal of money that Shaw says they shouldn’t really owe, or getting stuck in a ping-pong match between the insurer and the physician’s billing clerk.

“We want to just outlaw it, basically, take the consumer out of the fight between the insurance companies and the health care providers,” said Shaw, whose office is part of the Division of Financial Services.

It happened to Lisa Grehn of Miami two years ago, when she was in labor at Miami Baptist Hospital and her obstetrician asked a colleague for assistance. Grehn learned only later – when she got a bill for almost $3,000 -- that the second doctor wasn’t part of her health plan.

Grehn spent four months calling and writing the state Department of Insurance to keep from paying the balance of the doctor’s bill, until, in May 2008, the debt was written off.

At one point, she got a letter that said if she didn’t pay in 15 days, the dispute would be “forwarded to the credit bureau and processed for legal action and a judgment may follow.” One bill collector suggested that she sue her HMO to force it to pay the doctor.

“I was thinking, ‘Do I need to get a lawyer?’” Grehn said. Instead, she got help from the state Department of Insurance, which used some muscle on her behalf. Finally in May 2008, the debt was written off.

Shaw’s shopping for possible bill-sponsors this week as committees meet at the Capitol. But it will take time and persistence to get rid of balance-billing, because doctors will resist fiercely, says Florida Medical Association’s General Counsel Jeff Scott.

They don’t think it’s right to have to accept a discount on their fees that they never agreed to, Scott said. “If Sean Shaw tells me, as an out of network physician, that I have to accept (in-network payments), I’d say, ‘I’m not going to see those patients.’”

Shaw’s reaction: “I think that tells me who cares for the patient and who doesn’t.” 

Balance-billing typically occurs when specialists such as radiologists or pathologists who don’t participate in insurance networks work in hospitals that do. When the insurer pays the specialists only its usual amount, the specialists go after the patient for the rest.

Patients who never saw the doctor who’s now sending them a big bill have no negotiating power, especially if they’re still sick.

Federal law bars balance-billing of Medicare and Medicaid patients, so balance- billing is a problem for those in private health plans. In Florida, health maintenance organization (HMO) patients aren’t supposed to be subjected to balance-billing under a state law, but it doesn’t prohibit the practice for those in other kinds of managed-care plans, such as PPOs (preferred provider organizations).

Actually, Shaw says, the law barring balance-billing of HMO patients is widely ignored; in fact, Grehn is in an HMO. In part it’s because patients and doctors don’t know about the law, and the fine is seldom imposed. That’s another thing Shaw says he’d like to fix.

He’s stepping into a broadening national dispute. In January, the California State Supreme Court banned balance-billing entirely.

However, doctors have won some battles. Early this year, the American Medical Association and others reached a $350-million settlement with UnitedHealth Group over what the AMA contended were low out-of-network payments. New York Attorney General Andrew Cuomo agreed to work with UnitedHealth to find appropriate out-of-network payment rates.

Shaw has the backing of the insurance industry, which says it would strengthen networks and protect patients. “They shouldn’t have to be financially ruined because they have to pay thousands of dollars in balance-bills through no fault of their own,” said Bob Lotane, director of communications for the Florida Association of Insurance and Financial Advisors.

But Lotane predicted physicians will fight any such measure as fiercely as they battled insurers last year over Senate Bill 1122, which ordered insurers to pay doctors directly when they treat patients who have chosen to go out of network. Doctors won that fight.

An effort to ban balance-billing “would be 1122 on steroids,” Lotane said.

--Carol Gentry, Editor, can be reached at 727-410-3266 or at this e-mail. Mary Jo Melone, a free-lance writer in Tampa, can be reached by e-mail as well.