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Complex Health Plan Benefits Give Rise to Surprise Medical Bills

Fifty-eight percent of patients say their insurers are to blame for surprise medical bills and limited understanding of health plan benefits.

surprise medical bill

Source: Thinkstock

By Sara Heath

- Fifty-seven percent of healthcare consumers have received a medical bill that they thought to be covered by their healthcare payers, according to a recent survey from NORC at the University of Chicago.

Patients perceive these surprise bills to be their insurers’ fault, highlighting a need for better patient education about health plan benefits, NORC said.

The survey of about 1,000 adult patients revealed that patients receive surprise bills for numerous healthcare interactions. Of the 57 percent who said they have received an unexpected bill, about half (53 percent) said the charges were for physician services.

Other common charges were for hospital or other healthcare services (43 percent), lab tests (51 percent), imaging screens such as MRIs (35 percent), and prescription medications (29 percent).

Only 20 percent of patients said their surprise bills came from an out-of-network provider visit, the survey showed.

In these cases, patients likely received medical bills because their healthcare payers paid for only part of or none of their medical bills. The bills may have come unexpectedly because patients did not understand this benefit design or were unaware that they received care out-of-network, the NORC researchers posited.

However, 79 percent of patients said they received surprise bills from hospital or clinic visits they believed were in their payer network. In these instances, patients may believe their insurers should pick up the bill.

However, that belief points to inadequate patient education about insurance benefit design, the NORC researchers said. Individual health plans may not cover all services, regardless of whether a provider is in network. Patients may also see unexpected medical bills when patients have not yet reached their deductible.

“Most Americans have been surprised by medical bills that they expected would be covered by their insurance,” Caroline Pearson, senior fellow at NORC at the University of Chicago, said in a statement. “This suggests that consumers may have difficulty understanding their insurance benefits or knowing which providers are included in their plan’s network.”

The medical industry must do more to support patient understanding of health payer benefits, with education materials going beyond reviewing in-network and out-of-network care. Better healthcare price transparency should center on not just chargemaster lists, but on the costs that patients will incur given their payer benefits.

Patients lay blame for their surprise medical bills on the healthcare industry at large, although payers do bear the brunt of it. Fifty-eight percent of respondents said insurance companies are very responsible for the prevalence of unexpected medical bills, while 28 percent said payers are somewhat responsible.

Only 7 percent of respondents said payers are not at all responsible.

Hospitals also receive blame for unexpected medical bills, the survey revealed. Forty-five percent of respondents said hospitals were very responsible for the surprise bills, and 37 percent said hospitals are somewhat responsible.

Doctors and pharmacies received less blame, with 24 and 19 percent of patients crediting them for unexpected bills, respectively. Nineteen percent of respondents said doctors are not at all to blame, and 33 percent said the same of pharmacies.

The medical billing process has long been a thorny issue for patients. A June 2018 survey from InstaMed found that 72 percent of patients are frustrated by their medical bills.

Both patients and providers admit that the way the industry represents medical billing is problematic, with both parties acknowledging that there is scant patient education about the billing process. And as patients continue to be confused or surprised by their medical bills, healthcare organizations are seeing negative financial impacts.

When a patient cannot understand or is unprepared for her bill, she is less likely to be able to pay it. Seventy-three percent of providers said it takes over a month to receive patient payments.

It would benefit both patients and providers financially to develop better explanation of benefits packages as well as medical bills. Making these financial arrangements more patient-centric will be essential as patients continue to bear higher patient financial responsibility.

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