In a medical emergency, patients are typically concerned with getting to the emergency room as fast as possible. They often don’t stop to check whether the closest emergency room is at a hospital that is “in-network” with their health insurance plan; or, even if they do, the nearest in-network emergency room may be too far away.
Most health insurance plans exclude coverage for treatment with out-of-network hospitals, so this can cause insureds who seek treatment in an emergency without carefully checking whether their hospital is in-network with their insurer to pay astronomical out of pocket costs for treatment.
The federal Affordable Care Act (a/k/a “Obamacare”) imposed new rules on insurers that partially fix the problem of coverage for out-of-network emergency healthcare. The ACA requires covering emergency care without limiting coverage on the basis care was rendered by an out-of-network provider. The statute provides:
If a group health plan, or a health insurance issuer offering group or individual health insurance issuer [sic], provides or covers any benefits with respect to services in an emergency department of a hospital, the plan or issuer shall cover emergency services … in a manner so that, if such services are provided to a participant, beneficiary or enrollee … such services will be provided without imposing any requirement under the plan for prior authorization of services or any limitation on coverage where the provider of services does not have a contractual relationship with the plan for the providing of services that is more restrictive than the requirements or limitations that apply to emergency department services received from providers who do have such a contractual relationship with the plan….
42 U.S.C. § 300gg-19a(b)(1) (emphasis added).
Courts have summarized this rule as requiring insurers “to cover out-of-network emergency services in a way ‘that is [no] more restrictive than the requirements or limitations’ applicable to emergency department services received from in-network providers.” Northside Hosp., Inc. v. Ambetter of Peach State, Inc., 2017 WL 8948348, at *1 (N.D. Ga. Dec. 1, 2017) (quoting 42 U.S.C. § 300gg-19a(b)(1)(ii)).
Washington State’s Patient Bill of Rights similarly precludes insurers from limiting coverage for emergency care on the basis the provider was out-of-network. Washington law provides:
A health carrier shall cover emergency services necessary to screen and stabilize a covered person if a prudent layperson acting reasonably would have believed that an emergency medical condition existed…With respect to care obtained from a nonparticipating hospital emergency department, a health carrier shall cover emergency services necessary to screen and stabilize a covered person if a prudent layperson would have reasonably believed that use of a participating hospital emergency department would result in a delay that would worsen the emergency.
RCW 48.43.093 (emphasis added).
But there’s an important loophole in this rule. Health insurers have to cover out-of-network emergency care under the rule, but the rule never states how much of the bill an insurer must pay. This is a critical omission. Most health plans limit the amount the insurer pays to special discount rates the insurer negotiated with its in-network providers. But out-of-network providers haven’t agreed to accept this rate, which is often a tiny fraction of the out-of-network provider’s charge for an emergency room visit.
Thus, even where the insurer nominally covers emergency treatment at an out-of-network hospital, the insurer is only required to pay the amount it negotiated with its in-network providers. Since the out-of-network emergency room hasn’t agreed to accept those rates, the insurer’s coverage will be inadequate – often by hundreds of thousands of dollars. The patient then receives a bill for the difference despite having “coverage” for the emergency room visit.
This leads to the unfair situation where a person goes to an out-of-network emergency room and supposedly has coverage under the ACA and Washington Patient Bill of Rights, yet still winds up on the hook for medical bills that would have been paid had the provider been in-network. As a practical matter, this renders the intent of the ACA and Washington Patient Bill of Rights – protecting insureds from crippling medical bills for visiting an out-of-network emergency room – completely ineffective.
Unfortunately, until a legislative solution emerges, insureds must still check the in-network status of their providers with agonizing precision – even in the event of a life-threatening medical emergency – despite the ACA and Washington Patient Bill of Rights. Washington State’s legislature has proposed such a solution: HB 2114 – 2017-18 (“Protecting consumers from charges for out-of-network health services”). That bill remains in legislative committee and faces harsh opposition from industry groups.