Colorado To Join Other States In Increased Consumer Protection Against Surprise Medical Bills

Originally published on May 6, 2019 3:55 pm

Colorado lawmakers passed a bipartisan bill giving patients more protection from a practice called “surprise medical billing,” or “balance billing.” Now, it’s headed to the governor’s desk.

Surprise medical billing can happen in a number of ways. Say someone gives birth at a hospital that’s in-network, but in the process they’re given an epidural by a doctor who isn’t in their insurance network. Or, a patient wakes up after a nasty fall to find themselves being treated in an out-of-network facility. Both scenarios can end with a patient getting a massive bill, even if they have good health insurance.

“We’ve seen numerous examples where these surprise bills can be anywhere from 10 times to as much as 300 times what somebody would pay for the same service through say, Medicare, which is just absurd,” says Adam Fox with the Colorado Consumer Health Initiative. “This bill really starts to control those inflated costs.”

Among other things, the measure prohibits healthcare providers from sending consumers a balance bill when they’ve unknowingly received out-of-network care. It also sets a reimbursement rate that insurers pay to out-of-network hospitals and doctors.

According to Jack Hoadley, a research professor emeritus with the Center on Health Insurance Reforms at Georgetown University, those two elements should fill gaps left by a previous law.

“Physicians’ charges are often a lot higher than what insurers are willing to pay and when the provider is in network, they’ve agreed on a rate -- they’ve got a contract between them where they’ve said they agree on a rate they’re going to be paid for a service. But in the absence of such an agreement, they fall back to their normal charges,” he says, and those can be a lot higher.

“The biggest thing that limited what they did in the previous law is the burden was completely on the side of the insurance companies, so the insurers were required to hold the consumer harmless,” says Hoadley. “The problem was that if the consumer wasn’t aware of that protection, they would get a bill from the doctor, they would not know that insurance company has protection, and they would either just pay the bill or struggle to try to figure out what to do.”

Hoadley and his colleagues have mapped where states stand when it comes to surprise medical billing and is now in the process of updating that map to reflect recent changes. He says the new Colorado measure should bump it from a group of 25 states with “partial protections” into a group of about 10 states with “comprehensive protections.”

In that sense, Colorado would stand out in the Mountain West. The researchers found that other states in the region have little or nothing in the way of protecting consumers against this phenomenon, though lawmakers in at least Utah and Nevada recently said they would propose bills addressing it.

Adam Fox expects the Colorado measure will protect a good chunk of Coloradans. But, he says, it doesn’t apply to everyone.

“I think the one thing that is still going to be a challenge around surprise bills is that there are insurance plans that are not regulated by Colorado, in which case these protections don’t directly apply and really require federal action to address,” says Fox. “What I would say is that the way we have formulated this bill is that it should have a deterrent effect against providers sending these surprise bills, but it won’t stop them altogether for individuals who have federally regulated insurance plans.”

Two bills have been introduced at a national level this year addressing balance billing. According to the National Conference of State Legislatures, surprise billing is “gaining renewed attention among congressional leaders.”

This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUER in Salt Lake City and KRCC and KUNC in Colorado.

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