Insurer okayed out-of-network care for heart patient but family faces huge bill

During a routine sonogram appointment, Jodi Lemack discovered that her baby's heart had a rare and deadly defect. After making a special arrangement with her insurer to receive out-of-network care for her son, Lemack and her husband were left with an $85,000 bill.
By Jordan Rau
Kaiser Health News
Tuesday, January 19, 2010

RICHMOND -- Five months into pregnancy, Jodi Lemacks discovered that her unborn son had a severe heart defect and would require a complex operation as soon as he was born. But the local pediatric heart surgeons didn't inspire confidence.

One surgeon "had just lost a baby with the same defects," Lemacks says, "and he only did six of these surgeries a year, which is not a really good number."

So Lemacks and her husband, Mark, selected a Philadelphia surgeon who was one of the most experienced in the nation at performing the challenging operation. It involved draining the heart of blood while the surgeon reconstructed the aorta, which in a newborn is thin as a string. Even in the best of hands, Joshua had only a 5 percent chance of surviving to the second surgery he would need six months later, several specialists told the Lemackses.

The initial surgery in 2003 was a success. But what the relieved parents didn't realize was that their financial life would be drastically impaired. They ended up with $70,000 in doctors' bills that their insurer, Anthem Blue Cross and Blue Shield of Virginia, refused to pay -- even though it had approved the couple's choice of surgeons. After the second surgery, they were responsible for $15,000 more. Debt collectors have been calling ever since.

"We'll be in collections forever," says Mark Lemacks, who runs his own office-supply business. The family's credit rating is so low that when they tried to buy a mattress recently, the store would not provide financing.

What ensnared the Lemackses was something called "balance billing," which occurs when doctors, hospitals or medical labs bill their patients the difference between what they charge and what insurers pay for their services. It comes into play when patients use providers who aren't part of their insurers' networks and thus haven't agreed to prearranged payment rates.

For patients who voluntarily chose an independent caregiver over in-network options, the additional bills, while often unwelcome, are generally considered justifiable. But consumer advocates want the government to protect people who unwittingly end up out of network because of an emergency, such as when they are taken to the nearest hospital after a car crash; or who get an insurer's permission to see a specialist out of network; or who were unknowingly treated by out-of-network doctors while at an in-network facility. The Lemackses fell into the last two of those three categories.

To these advocates' dismay, both the House and Senate health-care reform bills explicitly permit balance billing, even though it's a major contributor to health-related bankruptcies.

Congressional aides say there's no need to limit the practice, because the pending legislation would require insurers to have enough specialists to ensure patients could get care within their insurers' networks. Both bills cap out-of-pocket costs for patients seeing in-network providers, and the House version recognizes the financial threat from out-of-network costs by counting a portion of out-of-network costs toward the cap.

Health-policy experts and advocates for people with chronic conditions say Congress could intervene in several ways, as some states have done. Maryland bans providers from balance billing a member of a health maintenance organization for a "covered service" such as emergency care. The state sets rates for how much HMOs must reimburse those providers.

Colorado requires both HMOs and preferred provider organizations to "hold harmless" patients if they are cared for in a network medical facility, as Joshua Lemacks was. As a result, Colorado insurers end up paying the full amount that providers bill or negotiate a compromise rate, according to Kevin Lucia, a researcher at Georgetown University's Health Policy Institute.

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