Balance Billing Patients in a PPO Plan
in Illinois
Illinois regulations can protect
consumers from shockingly high bills
Background
One of the most important features of a
Preferred-Provider Organization (PPO) Health
Plan is price protection. Not only
does your Plan pay most of your health bill,
usually 80%, but the PPO has negotiated
discounted rates for the hospital's or
doctor's services, so long as the patient
sees a "service provider" in the network
sought out by the health plan or
insurer. (For insurance purposes,
hospitals, doctors, and therapists are
called "providers" or "service
providers.") Often, the contract rate
with the provider is less than half of the
rate listed on the provider's bill.
Under the PPO contract, and Illinois
statute, the provider may send a bill to the
patient only for the copayment (usually 20%
of the contract rate), or a per visit
deductible or annual deductible. The
patient is not responsible for the amount
discounted from the provider's bill.
How the
problem occurs
Usually, the billing process runs smoothly,
so long as the patient visits a hospital or
doctor in the network of providers under
contract to the PPO Plan. Sometimes,
however, a patient sees a provider outside
the Plan without choosing that
provider. For example, the patient can
be brought to a local hospital in an
emergency. Often, a patient will see a
primary physician or hospital inside the
network, only to get bills from doctors
outside the network. This situation
arises because doctors who work in a
hospital are not employees of the hospital,
but independent contractors. A patient
visiting an emergency room after an accident
can expect to get five bills: from the
hospital , the emergency room physician, the
radiologist who reads the X-ray scan, the
pathologist who reads the lab test, and the
ambulance. Also, the
anesthesiologists, who are essential to any
surgery, are often not part of a
network. Even when the patient chooses
the hospital, he or she may be shocked to
get bills from the four other providers who
may not be in the network. The PPO
plan will usually pay only the amount it
would have paid had these doctors been in
the network. Then the provider sends
the patient a bill for the balance, not in a
discounted rate, but the full charges.
What can the patient do?
The problem is increasing
With the passage of the Affordable Care Act,
health insurers were required to offer
policies to all people who asked, and at the
same time, were forced to increase service
and costs to their standard health
policies. The insurers complied by
increasing the premiums of its old policies
but offering a lower cost policy with narrow
networks. In these policies, the
number of hospitals and doctors who agree to
take the patient's insurance is severely
limited. Many areas of Illinois have
no doctors in the networks.
The
solution: The patient must be held
harmless
New:
New Illinois statute protects patients who
act in good faith.
The State of Illinois has
recently codified the regulations, listed on
this page for many years, protecting
consumers from much balance billing from
providers. This site has discussed the
regulations, which should still apply.
Under the new Network
Adequacy and Transparency Act (NAT),
starting in 2019, a health insurer in
Illinois using a network of preferred
providers must submit a plan which includes:
(6) A provision ensuring
that whenever a beneficiary has made a good
faith effort to utilize preferred providers
for a covered service and it is determined
the insurer does not have the appropriate
preferred providers due to insufficient
number, type, or unreasonable travel
distance or delay, the insurer shall
ensure.. that the beneficiary will be
provided the covered service at no greater
cost to the beneficiary than if the service
had been provided by a preferred provider.
(7) A provision that the
beneficiary shall receive emergency care
coverage such that payment for this coverage
is not dependent upon whether the emergency
services are performed by a preferred or
non-preferred provider and the coverage
shall be at the same benefit level as if the
service or treatment had been rendered by a
preferred provider.
(8) A limitation that, if
the plan provides that the beneficiary will
incur a penalty for failing to pre-certify
inpatient hospital treatment, the penalty
may not exceed $1,000 per occurrence in
addition to the plan cost sharing
provisions.
For paragraph (6), good faith effort may be
evidenced by accessing the provider
directory, calling the network plan, and
calling the provider.
Paragraph (6) does not apply to: (A) a
beneficiary who willfully chooses to access
a non-preferred provider for health care
services available through the panel of
preferred providers, or (B) a beneficiary
enrolled in a health maintenance
organization. In these circumstances, the
contractual requirements for non-preferred
provider reimbursements shall apply.
The insurer must ensure payment directly or
indirectly, by terms contained in the payer
contract.
In Paragraph (7), "the same benefit level"
means that the beneficiary is provided the
covered service at no greater cost to the
beneficiary than if the service had been
provided by a preferred provider.
While the NAT Act is effective in 2019, the
regulations of the Department of Insurance
(listed below) should still apply now.
Previous:
New Illinois statute protects patients who
see nonparticipating facility-based
providers.
- When a patient uses a
participating network hospital and,
due to any reason, in-network
services are unavailable and are
provided by a nonparticipating
facility-based physician or provider,
the insurer or health plan shall ensure
that the patient shall incur no greater
out-of-pocket costs than he or she would
have incurred with a participating
physician or provider for covered
services.
- "facility-based provider" means
a physician or other provider who
provide
- radiology,
- anesthesiology,
- pathology,
- neonatology,
- or emergency department
services
See
215 ILCS 5/356z.3a.
Department of Insurance Regulations go
further:
In Illinois, the Division of Insurance has
implemented a bulletin to protect consumers
caught in this situation:
To the
extent that insurers provide access to
providers through contractual arrangements
with preferred provider administrators, it
is the insurer’s responsibility to invoke
and enforce the administrator’s
responsibility under 50 IAC 2051.55
(e)(10)(A). To the extent that an insurer
establishes its own provider network, the insured
[patient] is to be held harmless
in those instances where they
have made a good faith effort to
use the services of a contracted provider,
but because of the lack of availability of
ancillary providers, the insured's access
to otherwise covered health care services
is either inequitably restricted or simply
not available (215 ILCS 5/370i).
In all situations where an Illinois
insured has made a good faith effort to
use the services of a contracted provider
and where there is not equitable access to
such provider(s), it is the insurer’s
contractual and statutory responsibility
to ensure that the covered person be
provided covered services at no greater
cost than if such services had been
provided by a contracted provider.
CB #2007-04.
The Illinois Director of Insurance based the
bulletin on this regulation:
Each
applicant for registration shall file with
the Director the following information and
documents ... :
e)
A description of the standards by which
the administrator assures that the health
care services to be rendered under the
preferred provider program are reasonably
accessible and available to
beneficiaries. Standards shall
address such issues as:
10)
Policies
and procedures to assure access to
covered services when:
A)
The covered service is not available
from a network provider; in any case
whereby a beneficiary has made a good
faith effort to utilize network
providers for a covered service and it
is determined the administrator does not
have the appropriate preferred providers
due to insufficient number, type or
distance, the administrator shall
ensure, by terms contained in the payor
contract, that the beneficiary will be
provided the covered service at no
greater cost than if the service had
been provided by a preferred provider;
B)
The beneficiary has a medical
emergency within the network service
area;
C)
The beneficiary has a medical
emergency outside the network's
service area.
Ill. Admin. Code ch. 50, sec. 2051.55.(50
IAC 2051.55 (e)(10)(A)). See also 215
ILCS 370i.
Now recodified at 50 IAC 2051.310(a)(6).
The regulations require the insurer to have
a sufficient number of physicians to meet
the patient's needs.
Section 370i states that PPO policies,
agreements or arrangements may not contain
terms or conditions that would operate
unreasonably to restrict the access and
availability of health care services for the
insured.
These laws combined can help your lawyer get
your insurer to cover your claims without
owing high balances.
Conclusion
If you are a Illinois patient
who acted in good faith by going to a
hospital within the network, or had an
emergency, and receive a bill from a
doctor outside the network, you should
contact the provider and your insurer
that you acted in good faith and that
you must be covered to the same
extent (at no more cost to you)
than if the provider were in the
network.
Of course, the
laws are complex, and you may
encounter challenges under
Federal preemption or
administrative theories.
Do not rely upon this article
as legal advice. Consult
a legal professional about the
particulars of your
situation. This page
does not create an
attorney-client relation.
|
Motor
Vehicle Accidents - special
situations
After a Motor Vehicle Accident,
a patient may have more than one
insurance policy which can pay
accident bills: the general health
plan, the patient's own automobile
policy medical-payments coverage
("medpay"), and the at-fault driver's
automobile liability policy. The
liability policy usually does not pay
medical bills until all aspects of a
case are settled, often years
later. The hospital will try to
get payment from the medpay because
there is no PPO discount.
However, most automobile medpay
policies carry only $1,000 to $5,000
in coverage. For that reason, I
usually advise people to submit the
accident bills to their PPO plan and
use the medpay to take care of the 20%
copayments and deductibles. This
way, the limited dollars stretch
further, and the patient is exposed to
lower bills. Many PPO health
plans have contractual provisions
which prevent providers sending an
undiscounted balance bill to the
automobile policies after the bill is
submitted to the Plan. Courts
also restrict this practice when the
PPO contract prohibits balance
billing.
Be aware, however, that many plans may
have clauses which require medpay to
pay first and to be exhausted before
the PPO plan pays, and the Plan may
seek reimbursement from the
medpay. Similarly, an automobile
policy may state it is secondary to
the general health plan, and the
medpay pays only after the general
health plan pays primary. The
clauses may conflict with each other.
Another wrinkle occurs when a general
PPO health plan does not require its
network providers from submitting a
bill to the PPO; the PPO may be happy
to see the auto medpay take the
bill. There are no easy answers
to these situations, as they are
determined by the contractual
provisions of the various contracts,
many of which are not accessible to
the patient.
Finally, you expect that both the
general health plan and the automobile
medpay insurer want to be repaid out
of your settlement with the at-fault
party or his insurer. This
reimbursement is sometimes called
subrogation, and how it applies
depends on the written language of the
policies. Still, having the PPO
plan pay first costs the patient less
because the reimbursement is to the
extent the plan has paid. The
application with HMO (Health
Maintenance Organizations) is often
different. The HMO contract may
permit the providers to impose a lien
on a personal injury settlement for
the "reasonable" or "usual and
customary" (U&C) charges, which
may bes higher than the contractual
rate. Court sometimes permit
providers paid under a HMO capitation
rate to submit accident bills at the
U&C rates.
In 2013, in
Falls v. Silver Cross
Hospital, the United
States District Court for the Northern
District of Illinois held that a
hospital cannot place a lien on a
negligence action for the balance of
its claim after the PPO plan
paid. The PPO insurer had issued
payment in full, meaning there was no
balance for the hospital to assert a
lien for further payment.
However this case was later
dismissed, but in 2018,
a class action was announced
prohibiting this
hospital from refusing to accept
health insurance.
| Of course, the
laws are complex, and you may
encounter challenges under
Federal preemption or
administrative theories.
Do not rely upon this article
as legal advice. Consult
a legal professional about the
particulars of your situation. |
copyright
2008, 2012, 2013, 2018 Frank E.
Stepnowski. No claim to original
government works.
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