Millions of Floridians -- including 175,000 state workers and their families -- are in health plans that place them at risk for whopping surprise bills after hospital treatment.
These are plans that have networks of contracted doctors and hospitals but are not HMOs. Most of the plans with this risk are preferred provider organizations, or PPOs.
Traditionally, PPOs have been willing to cover a substantial amount toward an out-of-network bill – say 60 percent – but recently some are covering only a small fraction, leaving the bulk of it in the lap of the patient.
This consumer problem, called "balance billing," has been around for decades but was rare when plans had broad networks of providers and could pass along price increases. Now, insurers have narrowed their networks of doctors and hospitals, spurring specialists to band together to exert market power, refusing to sign contracts if the insurer pays less than they want.
Those at risk include an estimated 1.7 million Floridians enrolled in PPOs through the individual and group markets, plus an unknown number in PPO-style plans sponsored by large employers, said Rich Robleto, director of the health insurance division at the Florida Office of Insurance Regulation.
Robleto said large employers that self-insure and contract out claims processing to a company – the way state government contracts with Florida Blue -- are not regulated by the state.
On Jan. 1, a four-year contract between the State Group Health Insurance Plan and Florida Blue took effect. It gives Florida Blue administrators the power to decide what a suitable payment should be for out-of-network treatment for the PPO enrollees.
Sometimes it’s only a tiny fraction of the bill. David Rogers, who is a member of the University of South Florida chemistry faculty and has a Florida Blue PPO plan, discovered the realities of balance billing in April when his wife Melanie suddenly suffered severe abdominal pain. It was 4 a.m. so they went to a Tampa hospital emergency room where the case was considered an emergency. Four months later they got a bill from the surgeon who performed a minor procedure: $27,000.
Since the hospital was in the Florida Blue network, the couple's plan paid most of the hospital charges. But the surgeon was not in the network, and Florida Blue allowed only $600 toward his bill.
That left the Rogers to pay $26,400.
They appealed but Blue turned them down, pointing to the language on page 14 of the PPO plan description. In a box, in bold type, the description warns that Florida Blue covers bills from non-network providers according to an “allowance” and that any remaining amount must be paid by the plan member.
“We were encouraged to negotiate with the provider,” Rogers said. “They didn’t negotiate with us, so we were pretty much stuck.”
How many Floridians have network-style plans that could be subject to balance billing is unclear. However, a recent Mercer benefits study based on a national survey of large employers found that about 66 percent of workers and their families were enrolled in PPOs, with HMOs running far behind in popularity.
Under Florida law, only HMO enrollees are protected from balance billing. An effort to extend the same protection to consumers in PPOs and other plans with networks -- at least in emergencies -- failed during the 2015 legislative session in Tallahassee. It drew heated opposition from certain specialty groups, from ambulance services and others.
The staff of the state’s Insurance Consumer Advocate tried to help, but had no authority to do anything about balance billing. Sha’Ron James, the new advocate, asked Rogers testify at a public hearing on the issue Oct. 15.
After hearing what happened to Rogers, his friends are bailing out of PPOs, he said.
“They’re switching to HMOs because it doesn’t make any sense to be paying for insurance that doesn’t cover you,” he said.
Florida Blue Vice President Jason Altmire said he can’t speak about specific cases but confirmed that balance billing is growing and hurting a lot of patients. The company wants to see more “transparency” on costs and charges, he said, but balance billing is an issue that only the legislature can solve.
“The Legislature didn’t have the votes or support (this year) to make it happen. I’m sure they’re going to bring it up in January,” he said to a reporter. “Folks like you talking about it would help.”
Special correspondent Carol Gentry is part of WUSF in Tampa. Health News Florida receives support from the Corporation for Public Broadcasting.