Faced With Surprise Medical Bills, Some Texans Have Recourse. But The System's Not Perfect.
A growing number of Texans are turning to a little-known state mediation program to deal with surprise hospital bills. However, the program is likely only addressing a fraction of the surprise medical bills Texans receive in the mail every year.
The Texas Department of Insurance program is meant to intervene when Texans are stuck with a bill after their insurance provider and hospital can’t agree on a fair price for services – usually after an emergency. The practice is known as balance billing. The state only intervenes, though, after patients file a complaint with the agency.
The program, historically, had many loopholes and few consumers qualified for help. It was expanded during the last legislative session, though, and more patients have been filing complaints. In 2014, the department was asked to mediate 686 medical bills. During the 2018 fiscal year, it received 4,445 bills.
Brad Buckingham said he had to deal with a surprise medical bill after a bicycle accident in 2016. The Austin dentist was on a ride with friends when he crossed some train tracks at an angle to avoid a pile up. His wheel slipped out from under him and he landed hard on his left hip.
“All I could do was scream,” he said. “I couldn’t even make words.”
His friends called an ambulance, and Buckingham was taken to the nearest hospital: St. David’s in South Austin.
“I specifically remember I gave them my health insurance information in the ambulance,” he said. “And they put me in the ER and from the ER they took my insurance information, again.”
Buckingham had insurance through Baylor Scott & White Health, which he bought through the Affordable Care Act marketplace. St. David’s was out of network for his plan, but no one told him at first.
Buckingham had broken his hip, and doctors took him into surgery the same day.
“They held me in the hospital for three days just for recovery and never told me I was out of network until the time of my discharge,” he said.
A few weeks later, Buckingham got a bill for $71,543.
The total bill was $75,346. Baylor Scott & White, which left the ACA marketplace the following year, paid only about $3,812.
Buckingham said when he first saw the bill, he thought it was a mistake. He called the hospital and the insurer to sort it out. But after weeks of inquiring about it, there was no resolution.
Both sides insisted it was his responsibility.
“I’m sitting there thinking to myself that there is no way – there is no way this is right,” he said.
Baylor Scott & White said it could not discuss Buckingham’s bill “due to confidentiality requirements."
After Buckingham signed releases, St. David’s released a statement saying he was not balanced billed. It also blamed the large bill on his “high deductible plan.”
“[Those plans] may be attractive to some people because they cost less,” St. David’s said, "though they place more financial responsibility on the patient."
Buckingham said his policy had a deductible of $5,000 for in-network care and $10,000 for out of network. He said he still doesn’t know what happened.
“You know, whenever I tell my story to anybody they kind of agree – like, 'Oh my gosh, this is ridiculous,’” he said. “But then when you talk to the people that have any control over it, it’s the exact opposite. It's: ‘You owe it, we don’t.’”
Buckingham didn't know where to turn, so he got a lawyer to help lower his bill. He said he owes only a couple thousand dollars now, but he is still frustrated that all this happened.
It's a situation anyone can find themselves in.
Stacey Pogue, a senior policy analyst with the Center for Public Policy Priorities, has been looking into balance billing for years. She said whether you get a surprise bill after a trip to the ER is a total crapshoot.
“It’s a total roll of the dice,” she said. “The medical emergency that’s going to send you to the hospital where you could get a surprise bill – is that emergency room going to be in or out of network?”
Pogue said the Texas Department of Insurance's mediation program has been around for a while to help people in these situations. It forces an insurance company and the hospital or medical provider to negotiate a fair price for services. She said 90 percent of the time those negotiations happen over the phone.
From 2017 to 2018, the number of bills sent to the program more than doubled – from 2,063 to 4,445. Pogue said there are two big reasons for that.
“One is just increased awareness,” she said. “There is constant media attention now to surprise medical bills, because the stories are so shocking, right. We see them covered more, so people are more aware that when they get one they could do something about it.”
The second reason is because in 2017, the Texas Legislature opened the mediation program up to more people, including teachers.
Stacey Shapiro, a first-grade teacher in Austin, also received a surprise bill from St. David’s after she landed in the emergency room last March.
The marathon runner said she woke up one Saturday for an early run and wasn't feeling well.
“I just felt so sick, I wasn’t sure if I was going to throw up,” she said.
In the bathroom, things got worse: “All of a sudden the whole room started spinning. ... I started sweating, sweating like buckets,” she said. “It was terrible, and then all I remember is that my ears started popping, my vision got blurred and then the next thing I knew, I had passed out.”
Shapiro’s boyfriend heard her hit the floor. He found her passed out, with her eyes open and hardly breathing. He took her to St. David’s, which was the closest hospital.
Shapiro said she was taken care of in a few hours. Hospital staff gave her fluids and anti-nausea medication. Doctors found she had a huge change in her blood pressure that was likely due to her hypoglycemia, or low blood sugar.
Two months later, a $6,720 bill came in the mail.
Like many teachers in Austin, Shapiro gets her health insurance from Aetna.
In a statement, the insurer said Austin ISD employees use the Seton Accountable Care network, a plan that St. David’s parent company, HCA, doesn't participate in.
“Unfortunately HCA is not currently accepting payments through Aetna’s NAP program, which provides set payment fees for non-participating providers. This has resulted in Ms. Shapiro being balance billed for her emergency room visit,” Aetna said in a statement.
Shapiro said Aetna told her to pay only her deductible ($1,275), which she did right away. But St. David’s kept sending bills for the rest of the balance.
“I guess I just thought that it was going to go away,” she said.
But it didn’t. As a public school teacher, she said, $5,000 would have been a huge blow.
Shapiro applied for financial aid, but St. David's said she didn’t qualify. She said she felt like she was out of options – until a friend told her about the state's mediation program.
Aetna and St. David's had a scheduled mediation call, but before it took place, KUT asked St. David’s for a comment on the situation. Shortly after, Shapiro said St. David’s told her she no longer owed anything.
St. David’s said Shapiro had “already satisfied her financial obligation.” It also denied that she was balance billed to begin with.
Shapiro said the whole thing has been exhausting.
“It’s just very frustrating because this has been very time consuming,” she said.
That's why Pogue has been arguing that the state needs to find ways to get involved.
She said the current mediation process is pretty good, but not enough people know it’s an option.
“Because first, the instructions for how to do it are on your medical bill and your explanation of benefits – the most indecipherable documents you are going to get,” she said.
Pogue said even when people understand they have a right to mediation, they might get scared off by the concept and think they need a lawyer.
But when people use the program, it tends to work.
According to the state insurance agency, in the 2018 fiscal year the complaints amounted to $9.7 million worth of medical bills. By the time all those teleconferences were finished, the charges were negotiated down to $1.3 million.
Pogue said she can just imagine someone going through the process say, “Why didn’t this happen at the first place? How come I had to, while recovering from an emergency, decipher medical bills, fill out paperwork with the state department of insurance, jump through all these hoops, when all that needed to happen was a phone call?”
Ideally, she said, a solution to surprise medical bills would remove consumers from this confusing web altogether.
Pogue said states like New York, California and Florida have systems that make things easier for consumers and she thinks Texas should do that, too.
In the meantime, she said, more people here should take advantage of what's already in place.
The number of people who seek mediation is "tiny compared to the number of people who get surprise bills,” she said, "so, there is a ton of work to be done."
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