Owen Loney’s surprise bill results from an emergency appendectomy in 2019 at a hospital in Richmond, Virginia.
The insurance covered most of the costs of the hospital stay, he said. He didn’t pay much attention to a bill he received from Commonwealth Anesthesia Associates and expected his insurance to cover it. A few months ago, he was told Commonwealth was suing him in Richmond General District Court for $ 1,870 for submitting him during the operation, court records show.
“Wow, seriously? The 30-year-old CIO remembers thinking after receiving the subpoena. Loney didn’t have that kind of money on hand. His plan was to try to negotiate the amount down or “take another credit card to pay it off.”
Loney’s is a classic and notorious type of surprise bill that Congress and campaigners have worked for years to eliminate: off-grid charges not covered by insurance even though the patient has undergone emergency intervention or requested care in a network hospital. insurance would cover most of the costs.
Commonwealth said it was networked for Loney’s insurer, UnitedHealthcare. But the insurer rejected the anesthesia charges because it said its primary care doctor was out of the network, according to claims records.
The federal No Surprises law, adopted in late 2020, has been hailed by consumer advocates for banning such practices. As of January 1, medical companies cannot, in most cases, bill patients more than network amounts for any emergency treatment or out-of-network care provided at a network hospital.
But even if the legislation is designed to protect millions of patients from unintended financial consequences, it will do little to spare all consumers from medical billing surprises.
“It’s great that there are surprise billing protections… but you’re still going to see lawsuits,” said Zack Cooper, economist and associate professor at the Yale School of Public Health. “This will not solve all billing issues in any way. “
The law will come into effect too late for Loney and many others struggling with surprise off-grid bills in states that don’t already ban the practice.
“That doesn’t preclude surprise bills that are happening right now in states that don’t have protections” against them, said Erin Fuse Brown, a Georgia State University law professor who studies hospital billing. “And that does not preclude collection activities for surprise invoices that occurred before January.”
Virginia’s Surprise Bill Protection Act only came into effect this year and does not apply to self-insured employer health plans, which cover a large portion of residents.
Federal law also does nothing to reduce another nasty and often surprising kind of bill – large, direct payments for networked medical care that many Americans cannot afford and may not have realized. ‘they were incurring.
Two substantial changes in recent years have shifted the risk to patients more. Employers and other payers have reduced their provider networks to exclude some high-cost hospitals and doctors, putting them out of the network for more patients. They have also dramatically increased deductibles – the amount patients have to pay each year before insurance begins to contribute.
The No Surprises Act addresses the first change. He does nothing to fix the second.
For a glimpse into the past and future of surprise and contested medical bills, KHN examined Commonwealth lawsuits against patients in central Virginia and attended hearings in which patients contested their bills.
“This whole problem with insurance not covering my bills is a headache,” said Melissa Perez-Obregon, a Richmond-area dance teacher who Commonwealth sued for $ 1,287 for services that she received during the birth of her daughter in 2019, according to court records. His insurance paid most but not all of the anesthesia costs of $ 5,950, according to billing records.
“I’m a teacher,” she said, standing in the lobby of Chesterfield County General District Court. “I don’t have that kind of extra money.”
Commonwealth is one of the most active creditors seeking judgments in the Richmond area, according to court records. From 2019 to 2021, he filed nearly 1,500 cases against patients claiming amounts owed for treatment, according to the KHN analysis of court records.
In many cases, she has initiated garnishment proceedings, in which creditors garnish a portion of patients’ wages.
Describing itself as “the largest private anesthesiology practice in Central Virginia,” Commonwealth said it employs more than 100 clinicians who treat about 55,000 patients per year in hospitals and surgical centers, primarily in the Greater Vancouver area. Richmond.
Commonwealth has said more than 99% of the patients it treats are members of insurance plans it accepts. He only enters salary as a “last resort” and only if the patient has the capacity to pay, said Michael Williams, administrator of the Commonwealth practice, in a written statement.
“Over the past three years, we’ve taken legal action with just over 1% of our patients,” mostly for amounts owed under franchise or network co-pay, said Williams. Almost half of the bills are paid before the hearing date, he said.
Gwendolyn Peters, 67, said she was shocked to receive a summons to court this summer. Commonwealth was suing her for $ 1,000 for anesthesia during a lumpectomy for breast cancer in 2019, court records show.
“This is the first time I have found myself in this situation,” she said, sitting outside Chesterfield courthouse with half a dozen other Commonwealth defendants.
Because patients typically have little or no control over who refers them, Brown said, anesthesiologists are at less risk to their business and their reputation than other medical specialists by using aggressive collection tactics.
The specialty is often “one of the worst offenders because they don’t depend on their reputation to get patients,” she said. “They are not going to lose business because they engage in these really aggressive practices that are ruining their patients’ finances.”
The average annual deductible for individual employment-based insurance coverage has increased from $ 303 to $ 1,434 over the past 15 years, according to KFF. Deductibles for family coverage in many cases exceed $ 4,000 per year. Coinsurance – the patient’s liability once the deductible is reached – can add thousands of dollars in additional expenses.
This means that millions of patients are essentially uninsured for care that could cost them a substantial portion of their income. Surveys have repeatedly shown that many consumers say they would struggle to pay an unexpected bill of a few hundred dollars.
Loney’s insurer, UnitedHealthcare, agreed to foot the Commonwealth bill for his emergency appendectomy after being contacted by KHN and telling him he had “updated” the information on the claim. Otherwise, Loney said, he couldn’t have paid it off without borrowing the money.
In Richmond area courthouses, hearings for Commonwealth prosecutions are held every few months. A lawyer from the anesthesiology practice is present, sometimes making payment arrangements with patients. Many defendants do not show up, which often means they lose the case and may be subject to garnishment.
Commonwealth sued retiree Ronda Grimes, 66, for $ 1,442 over anesthesia claims her insurance did not cover after surgery, billing and legal cases filed in 2019 in Richmond General District Court.
“It’s a lot of money, especially when you have health insurance,” she said.
New research from Cooper and colleagues examining court cases in Wisconsin shows that medical lawsuits are disproportionately filed against people of color and people living in low-income communities.
“Doctors have the right to be paid like everyone else for their services,” Cooper said. But unaffordable and reimbursable medical costs are “a systemic problem. And this systemic problem usually falls on the backs of the most vulnerable in our population. “
For uninsured patients, Commonwealth matches any financial assistance given by the hospital and will “improve” its financial assistance program in 2022, Williams said.
Two of the nine people sued by Commonwealth and interviewed by KHN during courthouse hearings were Hispanic. Four were black.
One was Darnetta Jefferson, 61, who had a double mastectomy in early 2020 and came to court wearing a cancer survivor shirt. Commonwealth sued her for $ 836, claiming she owed coinsurance for the anesthesia administered to her during the operation. The Commonwealth attorney agreed to drop the lawsuit if she agreed to pay $ 25 a month for the balance until it was paid, she said.
“If one day I have the extra money to pay for it, I will,” said Jefferson, who worked at the Ukrop supermarket for many years before his cancer forced him to go on disability. “But at the moment, my situation does not look good. “
Although she lives on a reduced income, her rent has just gone up again, said Jefferson, who also survived with lung cancer diagnosed in 2009. The rent now stands at almost $ 1,000 a month. .
Paying the Commonwealth bill in monthly increments of $ 25, she said, means “it’s going to be a long way to go.”
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