Calls For Greater Consumer Help
Gov. Andrew M. Cuomo announced that the Department of Financial Services (DFS) is investigating unexpected out-ofnetwork medical costs affecting New Yorkers across the state, many of whom cannot afford to pay out-of-pocket expenses.
In addition, the DFS released a report which found an overwhelming need for increased transparency from insurers and medical service providers, and improved consumer protection measures to ensure that New Yorkers stop receiving unexpected bills.
The investigation was sparked by an overwhelming amount of consumer complaints. The DFS found that unexpected out-of-network medical bills are one of the most common complaints received by the agency.
New Yorkers can read the report at https://www.governor.ny.gov/assets/ documents/DFS%Report.pdf.
“The high cost of health insurance and health care are an enormous burden for most New Yorkers,” Cuomo said. “Our investigation shows that too many people are being hit with medical bills that are too high when they thought their care was covered by their insurance. We can’t allow that to continue. We must work with the insurance companies and medical service providers to ensure that all New Yorkers fully understand and are aware of the terms of their healthcare contracts.”
Financial Services Superintendent Benjamin M. Lawsky added, “Our report shows that all too often people who try their hardest to stay in network still get stuck with the most unwelcome surprise-a big out of network bill. We need to reform our system now to protect middle class New Yorkers who can least afford these additional burdensome costs.”
The department’s report produced the following findings:
– Too many unexpected bills: DFS found many cases where a consumer does everything possible to use an innetwork health care provider for nonemergency services, but nonetheless receives a bill from a specialist (often a radiologist, anesthesiologist, or lab) whom the consumer did not know or realize was out-of-network.
One case involves a child who had open heart surgery. The child’s parents were not told an assistant surgeon would be involved in the procedure and that assistant surgeon was out-of-network. The family was forced to pay $5,000 of that doctor’s $6,400 bill.
Another case involves a patient who was sent an unexpected $1,300 bill for what turned out to be an outof network anesthesiologist.
– Emergency bills are too high: Too often out-of-network providers who provide emergency services-a circumstance where consumers cannot be choosy about whether the provider is in network-take advantage of the situation and charge fees well in excess of what Medicare or insurance would pay in network.
In cases looked at by DFS investigators, the average emergency outof network bill was $7,006. That is 14 times what Medicare would pay. The average out-of-network radiology charge was 33 times what Medicare pays. One neurosurgeon charged $159,000 for an emergency procedure for which Medicare pays $8,500.
– Insurers are paying less of the cost of out-of-network care: The investigation found that insurers are moving to a system that greatly increases how much it costs consumers when they are treated out-ofnetwork.
To determine what they would pay for out-of-network care, most insurers used to use what is known as the usual and customary rate (UCR), which is supposed to be an average of actual bills for a procedure in that region.
Currently, most are using the Medicare rate, which decreases how much insurers pay by as much as half or more in some cases. Insurers make this change hard for consumers to understand, because some are told they are going from 80 percent of the usual and customary rate to 140 percent of Medicare. Though it sounds like an improvement, the governor noted that is not the case.
In one instance, a patient was approved for a surgery using the usual and customary rate. The insurer said it would pay $31,978 of the $47,685 cost. Before the surgery could be done, the insurer changed to a Medicare Fee Schedule and the insurer would only pay $4,864.62.
– Consumers can’t comparison shop. Because health plans are now switching between different coverage rates for out of network doctors, consumers are left in an incredibly difficult position when they select plans. They can’t compare “apples to apples” when, for example, one plan offers to cover 80 percent of UCR and another offers to cover 140 percent of the Medicare rate.
Another issue found during the investigation: even when consumers have no choice but to seek care out of network, most consumers must pay extra charges. Only consumers in HMOs are protected when they must go out of network.
Based on the findings of DFS’s investigation, DFS proposed the following solutions:
– Increase disclosure from providers: In non-emergency situations, providers should disclose whether or not all services are in-network before such services are provided and how much they will charge, and insurers should disclose how much they will cover.
– Increase disclosure from insurers: Insurers should enable consumers to conduct a meaningful “apples to apples” comparison regarding how much of the cost of outof network services will be covered when they are choosing a plan, whether the insurer uses UCR or the Medicare rate.
– Prohibit excessive fees: Out-ofnetwork providers should be prohibited from charging excessive fees for emergency services.
– Improve network protections: Network adequacy protections must be improved. Consumers not in HMOs should be given the same network adequacy protections provided to consumers with HMO coverage.
New Yorkers who have questions or complaints concerning their medical bill should go to www.dfs.ny.gov/consumer/fileacomplaint. htm or visit www.dfs.ny.gov.
