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HEALTHCARE

Billing issue has patients feeling ill

Policyholders are being pressured by hospitals and doctors when insurers don't fully pay for services.

May 17, 2008|Daniel Costello | Times Staff Writer

Celina Fuentes, 80, had a heart attack a year ago and was taken by ambulance to La Palma Hospital in Orange County. She pulled through, paid the $250 deductible for the four-day hospitalization, and thought her payment issues, at least, were over.

Then came the shocker: A bill arrived this month from the hospital saying she owed $5,239.85 -- the amount of the $11,000 bill her insurer, Kaiser Permanente, didn't pay. The letter said Fuentes and her husband, Renato, had one month to pay or the matter would be turned over to a collection agency.

"The day I got the letter I couldn't sleep for two or three nights," Renato said, fighting back tears. "We live on Social Security. This bill is insurmountable for us."

Fuentes isn't the only one in such a predicament. Consumer advocates say many patients may be unnecessarily paying bills because of a controversial practice known as "balance billing" used by a growing number of healthcare providers who say insurers are shortchanging them.

In recent weeks, Kaiser says, as many as 6,000 of its Southern California members have received similar bills -- some as high as $50,000 -- from Prime Healthcare Services Inc., a hospital chain based in Victorville.

On Friday, Kaiser got a temporary restraining order from Los Angeles County Superior Court against Prime Healthcare. The order bars Prime from collecting from patients or reporting the bills to national credit agencies until a court hearing in early June.

Kaiser is involved in separate litigation with Cedars-Sinai Medical Center about similar billing issues. Other insurers, such as Health Net, have faced penalties for such billing controversies.

Balance billing occurs when doctors and hospitals claim they've been underpaid by insurers and ask patients to pay the rest. Some patients assume -- wrongly -- that such bills are cleared by their insurer.

For example, a doctor may charge $2,000 for a procedure, but the health plan pays $1,500. Under balance billing, the hospital would ask the patient for $500 -- even though a patient had paid his or her full share of the service. Many of the bills involve patients who visit -- or are taken by ambulance -- to emergency rooms out of their health plan network.

According to a 2006 survey by the California Assn. of Health Plans, more than 1.75 million Californians who visited emergency rooms in the previous two years received $578 million in bills for unpaid balances on top of their co-pays and deductibles. Nearly 60% paid the bills, the survey found.

California law on balance billing is vague, but this spring the state proposed barring it. Many doctors and other medical providers, though, say insurers are skimping so much on payments that they can't afford not to balance bill.

In the meantime, patients such as Ryan Gledhill of Chino Hills are caught in the middle.

Gledhill, 18, was in a motorcycle accident two years ago and was airlifted to Arrowhead Regional Medical Center in Colton. He had surgery and was hospitalized for eight days.

The Gledhills' insurer, Blue Cross of California, paid $27,000 of the $78,000 bill. The public hospital sent the Gledhills a bill for the rest.

Ryan's mother protested to the hospital and Blue Cross. In December, Blue Cross upped its payment to $38,000 but said that amount was final, she said. The hospital says its bill stands and has threatened to send it to collections, she said.

"My son went to an out-of-network hospital, but I didn't choose for him to go there," Karla Gledhill said. "He could have died and they flew him to the closest hospital. I can't understand how we are caught in the middle."

Neither Arrowhead Regional Medical Center nor Blue Cross would comment on the case, citing patient privacy issues.

But Blue Cross, through spokeswoman Peggy Hinz, said it was reviewing its reimbursement procedures and expected to announce a change in the coming weeks. She added that Blue Cross expected to begin reimbursing patients when they are balance billed for out-of-network care going forward.

"It was not the intent of our reimbursement policy to increase out-of-pocket expenses for our members who do not have a choice in selecting the place where healthcare services are performed, such as in the case of an emergency," Hinz said.

Karla Gledhill said Blue Cross agreed this week to visit the matter after she threatened to contact patient rights groups and the media.

California laws on the issue are vague compared with those in some states. New Jersey and West Virginia require insurers to pay the doctors' bills in such disputes. Connecticut, Colorado and Rhode Island indemnify patients against having to pay such bills.

California has rarely acted against insurers or providers for balance billing issues. One exception came in 2005, when regulators fined Health Net $250,000 for underpaying emergency room doctors and other physicians. The state said the Woodland Hills-based managed-care provider underpaid more than 65,000 claims.

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