The New York Department of Financial Services is blasting the gaps in coverage and health plan provider network contracts that can leave patients who try to see in-network doctors on the hook for thousands of dollars, or tens of thousands of dollars, in unexpected out-of-pocket expenses.
The department is investigating the unexpected out-of-network claim problem in response to what officials say is "an overwhelming amount of consumer complaints."
The department released a preliminary out-of-network claims report that gives some of the worst examples investigators heard about.
One involved a child who had heart surgery at an in-network hospital, and the surgeon was an in-network surgeon.
"The child’s parents were not told an assistant surgeon would be involved in the procedure and that assistant surgeon was out-of-network," officials say. "The family was forced to pay $5,000 of that doctor’s $6,400 bill."
Many other cases involved bills for emergency services, radiology or anesthesiology. One patient cited received an unexpected $1,300 bill from an anesthesiologist who turned out to be an out-of-network provider, officials say.
The investigators that the average emergency out-of-network bill was for $7,006 and was for 14 times the amount Medicare would pay for the services.
The average out-of-network radiology bill was 33 times what Medicare pays, officials say.
Both insurance companies and medical services providers have to help make sure New York residents understand their coverage and the bills they will receive, New York Gov. Andrew Cuomo, D, said in a statement.
Sherry Tomasky, a New York-based lobbyist for the American Cancer Society, said out-of-network billing problems are particularly hard on patients with cancer.
"New Yorkers who are dealing with the stress and anxiety of being treated for cancer should not have added burden of thinking about unexpected exorbitant costs that they cannot afford," Lawsky said.
Insurers are contributing to patients' problems by paying less for out-of-network care, and, in some cases, making dramatic changes in the formulas they use to determine what they will pay, officials say.
Because of the cut, patients who cannot persuade providers to take lower fees may be responsible for a bigger share of the total amount billed, officials say.
The New York department is recommending that providers and insurers give consumers more information about what really will be covered and how much the patients will really have to pay.
The department also wants to prohibit out-of-network providers from charging what the department believes to be "excessive fees for emergency services."
New York law now provides more protection for enrollees in health maintenance organization (HMO) who seek care out of network because of network adequacy problems, and the law should give the same level of protection to enrollees in other types of plans, officials say.