Surprise billing refers to situations where patients receive services from providers who they assumed were contracted yet were actually out-of-network. Thus, they are ‘surprised’ when they discover a bill for unpaid services and with it full, direct responsibility for payment. Surprise billing often arises when patients receive services from multiple providers in a single episode of care, assuming that all providers are contracted even though only the facility or primary surgeon was in-network. Although used interchangeably, balance billing and surprise billing represent distinct scenarios. Balance billing implies that a patient is billed directly by a provider for the difference between what the provider billed and what the insurer reimbursed. These circumstances often occur in emergencies and involve out-of-network providers because in-network providers are contractually prohibited from sending enrollees a balance bill.
According to a study done by the JAMA Network, 1 in 5 patients gets a surprise medical bill after surgery. For this study, data from almost 350,000 patients with a large commercial insurer was analyzed and it’s found out that more than 20 percent of patients were hit with out-of-network charges. The average bill was over $2,000 more than what insurance would typically pay. The rate of surprise billing varies from state to state and ranges from 3% in Nebraska to 46% in Alaska. As per another study from Health Affairs, twenty percent of inpatient admissions from the emergency department likely led to a surprise bill. This study also found that most of the surprise bills come from either anesthesiologists or surgical assistants, who are typically not chosen by patients.
The ongoing COVID-19 pandemic has intensified public concern about surprise billing due to hospital triage protocols and staffing shortages that increase exposure to out-of-network facilities and providers. According to a Kaiser poll, up to two-thirds of Americans express concern about an inability to afford unexpected medical expenses, and 78 percent support the enactment of federal legislation protecting against surprise medical bills. At present, Congress is debating how to address this problem. As a result of this debate, the two bills under discussion take differing approaches to resolving these outstanding payments when they're no longer placed on the shoulders of patients. Surgeons have been increasingly implicated in encounters with surprise and balance billing. Approximately 20.5% of in-network acute surgical care episodes also contain an out-of-network component with a mean balance bill of $2011. There are several scenarios (elective and emergency) that generate a surprise bill wherein an informed choice by a surgical patient was not the case.
Although there is no reason to believe that surgeons purposefully aim to financially harm patients, we must also acknowledge and ethical tension borne from the differing expectations with respect to healthcare financing. The 4-box model, developed by Jonsen et al, is a useful framework for analyzing clinical ethical dilemmas; and entails the following dimensions: medical indications, patient preferences, quality of life, and contextual features. They are based on the 4 core bioethics principles: beneficence, nonmaleficence, respect for autonomy, and justice. Using this model, the medical indications for treating acute appendicitis center on the surgeon acting under the ethical principles of beneficence and nonmaleficence.
Consider the scenario of a 30-year-old male who presents to the emergency room with acute appendicitis and undergoes a laparoscopic appendectomy. After recuperation, he learns that the surgeon was out-of-network due to a COVID-19 related staff shortage and is left with a large bill for professional fees. Using the 4-box model, the medical indications for treating acute appendicitis center on the surgeon acting under the ethical principles of beneficence and nonmaleficence. Therefore, he performs a laparoscopic appendectomy as part of their fiduciary duty. The patient makes an autonomous decision to undergo the operation. Thus, the 2 main boxes of medical indications and patient preference are in agreement posing no conflict. However, the contextual features which center on the principle of justice create a dilemma by introducing a financial element to the shared decision-making. A patient, particularly in an emergency setting, should not have to factor in the financial burden of surprise billing for out-of-network services. Additionally, the surgeon should be free to provide the necessary care with knowledge of appropriate compensation. Addressing surprise billing at the policy level preserves the doctor-patient relationship and allows both the surgeon and patient to focus on appropriate care in an emergency setting.
In a second scenario, a 50-year-old female sees a surgeon for consultation regarding localized breast cancer. She is scheduled for lumpectomy and afterward, receives a surprise bill for the out-of-network anesthesiologist. The patient was aware that the surgeon was in-network and the surgery had been approved but she was not informed that the anesthesiology group was out-of-network. Analysis using the 4-box model demonstrates that medical indication for surgical excision of the breast mass is aligned with the patient's preference. Unlike the first scenario, this is not an emergency procedure, and there is more time before the actual surgery for the patient and surgeon to consider the contextual features of this case, particularly financing. Here the question arises, what is the responsibility of the hospital, surgeon's office, and payer to notify the patient in advance of out-of-network providers?
An informed patient can potentially make changes on where and by whom she receives care in an elective setting rather than receiving a surprise bill after the fact. However, this can create a conflict for the surgeon and surgical team who want to provide care for the patient and yet, rely on appropriate compensation which may be lost if the patient transfers care. Though this case differs from the first scene that was presented primarily based on acuity, the conclusion remains that preservation of the patient-surgeon relationship by providing just and financially affordable care is most important. By developing policy solutions to surprise billing practices, these ethical conflicts can be mitigated so surgeons can practice with beneficence, nonmaleficence, and respect for patient autonomy.
In this article we discussed, stats, clinical scenarios, proposed bills, and the 4-box model for a better understanding of surprise billing in surgical care. MedicalBillersandCoders (MBC) is a leading provider of medical billing and coding services. Our billing and coding expertise over various medical specialties ensures quick and accurate insurance reimbursements. To get the latest updates on medical billing and coding, subscribe to our newsletter or visit our latest blog section.