Millions of Americans Could Face Surprise Emergency Room Bills in January

CALAAEM News Service at
Wed Dec 12 01:23:03 PST 2018


Dec. 7, 2018


Millions of Americans Could Face Surprise Emergency Room Bills in January 


eversal-looks-like-a-lemon> Bloomberg


By John Tozzi


A flood of surprise hospital bills could start arriving in U.S. mailboxes as
early as January unless two giant for-profit health care companies resolve a
dispute over whether thousands of doctors remain in patients' insurance


America's biggest health insurer, UnitedHealthcare, is pitted against one of
the country's largest employers of doctors, Envision Healthcare, in a
massive contract fight over prices that Envision's 25,000 emergency doctors,
anesthesiologists and other hospital-based clinicians charge.


A contract impasse would mean that UnitedHealthcare's 27 million privately
insured patients could face expensive, unexpected doctor bills as of Jan. 1
when Envision doctors would become out-of-network.


Envision has already been criticized for its billing practices in situations
where its doctors don't participate in patients' health plans. A Florida man
got a bill for $2,255 from an Envision subsidiary after being treated by an
out-of-network emergency doctor in 2014 for a facial injury, according to a
lawsuit he filed earlier this year.


In another case, a California woman went to an in-network hospital for
abdominal pain and found she needed emergency gallbladder surgery. The
operation was covered, but she faced $4,447 in bills from Envision for two
trips to the emergency department.


A judge dismissed the Florida case, and the case in California is in
settlement talks.


"With emergency-room docs, patients don't have any control, don't have any
ability to stay in a network," said Paul Ginsburg, a health economist and
director of the USC-Brookings Schaeffer Initiative for Health Policy.


The standoff comes as patients and policy makers are increasingly fed up
with unexpected medical bills and soaring insurance expenses that can sink a
family's finances. More than half of Americans have gotten an unexpected
medical bill, according to an August survey by the research group NORC at
the University of Chicago. About 1 in 5 emergency-room admissions resulted
in a surprise out-of-network bill, economists from the Federal Trade
Commission reported in 2017.


Insurers contract with networks of doctors and hospitals to negotiate how
much they will pay for their members' medical care. In many health plans,
patients can still see doctors outside of that network, and the insurer will
often pay some portion of the bill. But out-of-network providers are free to
try to collect the rest of their charges from patients directly. That
practice, known as balance billing, has enraged consumers and drawn scrutiny
from regulators.


Several states including California, Florida, and New York tried to restrict
the practice. Both Republicans and Democrats have sponsored federal
legislation this year to limit charges for patients when hospital doctors
are out of network.


Big money is at stake. Envision gets about $1 billion in annual revenue from
UnitedHealthcare, the company says. Its total revenue last year was $7.8
billion. UnitedHealthcare said about 650,000 of its members received care
from Envision clinicians last year.


Both companies have been trading blame for the hit patients will take if
they don't reach a deal over the terms of reimbursement, though both sides
remain hopeful about reaching agreement. While stand-offs between insurers
and medical providers are common, the stakes are especially high in this one
because of the size of both companies and the fact that patients have little
ability to avoid Envision's doctors in emergency situations.


The conflict has been heating up since October when UnitedHealthcare
published a letter it sent to hospitals warning that an impasse could leave
their patients dissatisfied "from higher out of pocket costs and patient
confusion." It also set up a website accusing Envision of "price gouging"
with charges double the average for emergency services.


"We remain committed to working with Envision in finding a solution that
will renew their participation in our network at rates that are affordable
and predictable for the customers and members we serve," UnitedHealthcare
spokesman Stephen Shivinksy said in an email.


Envision blames insurers for gaps in coverage that leave patients exposed.
"We're just not understanding why United is interested in pushing a large
emergency group out of network," Bob Kneeley, a spokesperson for Envision,


Envision is one of a handful of big medical staffing companies that supply
emergency doctors, anesthesiologists and other clinicians to hospitals
nationwide. Physician-staffing companies can help lower costs for hospitals
and bring doctors to areas where hospitals may struggle to find qualified


The company was built through a series of acquisitions, culminating in a
2016 merger with AmSurg, a large surgery center and physician staffing
group.  In October, private equity giant KKR purchased the combined company
for $9.5 billion, including debt.


Envision bills independently from the hospitals where its doctors work. That
arrangement means that even patients who choose a hospital in their health
plan's network may face charges from Envision's physicians who don't take
their insurance. 


Since its merger with AmSurg, Envision has been trying to shake off a
reputation for aggressive billing practices that it contends is undeserved.
AmSurg Chief Executive Officer Christopher Holden took over at Envision
after the companies merged two years ago. He soon pledged to change course.
"We are focused on moving the majority of our relationships to in-network
status," he told investors in February 2017, on his first earnings call
leading the combined company.


The roots of the dispute with UnitedHealthcare go back to 2009, when a
Florida physician group called Sheridan Healthcorp signed a multi-year
contract with the insurer. Through a series of acquisitions, Sheridan became
part of what is now Envision Healthcare, bringing more and more doctors
under the umbrella of that contract.


That contract surfaced in a lawsuit that Envision filed against
UnitedHealthcare in March, a case that offers a rare look at the
behind-closed-doors maneuvering that determines medical prices.


According to Envision's lawsuit, UnitedHealthcare failed to pay newly
acquired medical groups under the contract as Envision expanded its
footprint. Envision said that decision "hurts patients financially, while
saving UnitedHealthcare money at the patients' expense."


UnitedHealthcare countered in legal filings that "the addition of Envision
and its numerous subsidiaries served to drastically expand the scope of
specialties far past those originally contemplated" by the contract. The
insurer also accused Envision of "an improper game of hide-the-ball" to
boost profits without proper notice of price hikes. The lawsuit was sent to
private arbitration, which is ongoing.


Price hikes were part of the playbook for Envision and its predecessor
companies. Agreements with large insurers typically lasted several years and
"often provide for annual increases in reimbursement rates," according to
AmSurg's 2015 annual report.


A redacted copy of the disputed 2009 contract shows that UnitedHealthcare
originally agreed to pay 80 percent of eligible charges. That's a structure
insurers typically try to avoid, because medical companies can set their
charges as high as they like. "It's very strange," said Ginsburg, the health
economist. "Insurers, if they're negotiating, they want to negotiate a link
to a hard number."


In November, after Bloomberg News inquired about the document, the companies
asked the court to refile a copy of the contract with additional information
withheld, because the original filing "inadvertently omitted" to black out
the contract rate the companies agreed on.


Both companies declined to comment on the earlier agreement.


If the companies remain at an impasse in January, UnitedHealthcare will be
under pressure to shield its members from Envision's bills, Ginsburg said,
because it has little ability to steer patients to other providers.


UnitedHealthcare has said it will set up a hotline for patients to report
unexpected charges from Envision and advocate dropping those charges.
Envision's Kneeley said the company preferred to remain in-network, but
either way it expects to get paid.


"We'll continue to see the patients, and then we'll continue to seek
reimbursement," he said.



Brian Potts MD, MBA
Managing Editor, CAL/AAEM News Service


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