Small Business

5 Ways to Help Employees Prevent Surprise Medical Bills

Published on January 29, 2020

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Surprise medical bills can be a significant challenge for anyone, especially for small business owners and their workers. After going to the doctor for an important treatment or service, no one wants to receive expensive bills that they weren’t expecting, and the financial strain they create could cause employees to be less engaged and productive at work.

As an employer sponsoring a group health plan, you may be able to help your employees avoid or prevent unexpected out-of-network billing charges. Continue reading to learn more about surprise medical bills and how employers and workers may mitigate them.

What are surprise medical bills?

Many people might not be familiar with the details of staying in-network versus getting out-of-network care. Surprise medical bills may come in the form of unexpected out-of-network charges that a patient unknowingly receives at the time of their treatment. Since patients are not notified about the charges, they are not able to prevent these out-of-network billing situations and end up having to pay more in medical costs. The Kaiser Family Foundation estimated that 18 percent of emergency visits and 16 percent of inpatient admissions at in-network hospitals resulted in at least one out-of-network bill.

What are common causes of surprise medical bills?

Medical emergencies are a common source of surprise medical bills. For instance, a patient who requires emergency care will usually not be able to choose the ambulance provider, physicians, or emergency room, which may or may not be covered by their network.

In other cases, out-of-network billing may occur when a person receives surgical or medical care at an in-network hospital, but the providers, such as anesthesiologists and surgical assistants, are incidentally not part of the same medical network.

According to study results published by JAMA Internal Medicine that took into account inpatient admissions and emergency department admissions from 2010 to 2016 in a large national sample of privately insured patients, emergency department visits with an out-of-network bill increased from 32.3 percent to 42.8 percent, and the average potential financial responsibility increased from $220 to $628.

According to research from the National Business Group on Health (NBGH), the most frequent sources of surprise medical bills are emergency room physicians (98 percent), anesthesiologists (88 percent), surgeons (67 percent), pathologists (58 percent) and radiologists (58 percent).

How can small businesses help employees prevent surprise medical bills?

The most effective action that employers can take to assist their workers with avoiding surprise bills is to educate their employees on the subject of how out-of-network billing works.

Here are 5 ways that small business owners can help employees prevent surprise medical bills.

1. Research network coverage and receive estimates

As a small business owner, you can remind your employees that in order to avoid out-of-network billing charges, they should check the extent of their network coverage before their next medical appointment.

  • Workers should make sure that all the facilities and providers they seek to use are part of their health plan’s medical network, in order to avoid receiving surprise medical bills later.
  • Since medical costs can vary by location, employees should research the costs of common medical procedures in their ZIP code, and get an estimate before scheduling a medical visit.

Another way that employees can prevent surprise medical bills is by telling doctors that they only want to use in-network labs to perform their tests. Workers can consult resources provided by their health insurance company to see what local labs are available through their network.

2. Confirm medical billing codes prior to preventative care visits

One common source of surprise medical bills is when regular preventative care visits are billed as visits for a specific previous symptom, instead of being covered by an employee’s health plan.

  • Employees may face this problem if a medical billing code, a 6-digit code which identifies a certain medical procedure to determine its cost, is assigned to their preventative care visit.
  • As a result, the visit could be billed for a copayment or coinsurance, rather than being treated as a preventative care appointment typically covered through their group health insurance plan.
  • Besides medical codes that do not match the actual service rendered, other errors involving codes may include duplicate billing or being charged for a similar yet different treatment.

To help prevent these unexpected costs, employees can contact their insurance company to find out which tests and services are covered by their health plan, and what the corresponding medical billing codes are. The next time they visit the doctor, they can compare the insurer-provided medical codes to determine if the services are covered through their plan.

3. Learn your state’s laws about surprise medical bills and balance billing

Small business owners can find out their state’s laws about balance billing and provide this important information to their employees.

Surprise medical bills may result from a process known as balance billing. Balance billing occurs when an insurer does not have a contract or negotiated discount rate with an out-of-network health care facility or provider. As a result, the insurer may not pay for the entire bill, causing the out-of-network provider or facility to charge the patient for the balance of the medical bill.

Balance billing usually occurs in two types of scenarios:

  • A patient receives emergency care from an out-of-network facility or health care provider.
  • A patient receives nonemergency care at an in-network facility, yet is incidentally treated by an out-of-network provider.

A significant number of states offer their residents some form of balance billing protection, including dispute resolution procedures and more transparency. According to The Commonwealth Fund, as of July 2019, although there is no federal law that limits this practice, 28 states have enacted laws that provide their residents with partial or comprehensive protections against balance billing.

If you or your employees are balance-billed, you can try asking your health insurance company for help, or you may be able to negotiate the fee with the doctor or hospital billing manager.

Source: M. Kona, et al, Center on Health Insurance Reforms, Health Policy Institute, Georgetown University.

4. Inform employees that they can try to negotiate surprise medical bills

Depending on the circumstances, employees can try to negotiate an out-of-network billing situation by directly contacting both the health care provider and their health insurance company.

  • Out-of-network doctors and the insurance company may be able to reduce the price of the medical bill, or potentially not charge for the balance remaining after the insurance payment.
  • If the surprise bill is a result of an emergency situation or out-of-network ambulance services, employees may be able to ask ER physicians for documentation proving that they could not choose how they were transported and that their treatment was medically essential. 
  • Employees also may be able to set up a payment plan with the service provider or medical office, allowing them to pay off an expensive surprise bill over time.

While there is no guarantee that trying to negotiate a surprise medical bill will end up changing the final cost of the charges, calling the billing department as soon as the bill is received may be more likely to be effective than waiting to dispute the charge after the bill is past due.

5. Find out about facility fees

Another source of surprise medical bills, facility fees, do not result from out-of-network billing charges. Instead, facility fees are charged by some hospitals for the usage of their medical equipment and space, in addition to other charges incurred during the visit. Hospital-owned clinics may charge facility fees in order cover maintenance costs for the facility.

To avoid facility fees, employees should ask both their doctor and insurance company about their policy regarding these charges.

  • Before their appointment, workers should find out if the doctor or specialist will charge them a facility fee, and if the appointment could be held at another location without facility fees.
  • A significant number of health insurance companies either provide no or partial coverage for facility fees, which is why employees should look into the policies of their insurer.

Charging a facility fee is a legal practice in most states, which is why it may be challenging for employees to negotiate these charges after their appointment or procedure. However, they may be able to speak with their health care provider or insurance company about reducing the fee.

Ultimately, the bottom line is that if you are unexpectedly treated by an out-of-network facility or provider, you will usually end up having to pay more for those particular medical services. Overall, taking the time to provide your employees with advice on how to prevent surprise medical bills and out-of-network billing may be a worthwhile way of helping your team manage their health care costs.

This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.

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