Dealing with fees charged by an out-of-network ambulance service

We had a similar issue with the anaesthesiologist at the hospital where we had our first baby. The hospital and most other staff were in-network, but the on-call gas man was out-of-network. His office then tried to charge us $4000 for the portion of his full fees that the insurance didn't cover.

I say "tried", because we were appalled at the amount of the total bills (thousands of dollars in excess of our deductible and expected 20% coinsurance), and got on the phone with Blue Cross. In our case, it turns out the doctor was trying to pull a fast one.

First off, the Affordable Care Act has a provision that requires the insurer to pay their in-network percentage to any provider of "emergency care", even if that provider is out of network. "Emergency care" is defined based on the Prudent Layperson Standard; basically, if you, as an average, competent person without an MD, would think that without the care, the person would die or be significantly disabled, it's an "emergency". So, take a look at your benefits document again; if $375 for an ambulance ride, either as a flat fee or percentage, is the out-of-network going rate for coverage, your insurer has acted improperly and needs to cough up more cash.

Now, that doesn't necessarily mean that an out-of-network provider has to accept the in-network terms. Most insurers negotiate a lower billing rate with in-network doctors, in return for the referrals and guaranteed payment that being a network provider brings. When the insurer pays "in-network", that's the amount of money that the provider gets. An out-of-network provider has made no such billing agreement with the insurer, and regardless of the amount paid by insurance, they can still "balance-bill" for the difference between their full price and the insurer-paid portion.

Here's where the second portion comes in; often a patient who's been balance-billed for care at an in-network hospital will make a stink, especially if they had no choice or even any advance warning that one or more providers was OON, and the insurer has to pay that bill anyway (because it's cheaper than fighting it). To control costs in these circumstances, some insurers get hospitals and other care centers, as a condition of in-network status, to get all their privileged providers to agree to be billed as in-network while they're working in the hospital, even if they are out-of-network for that insurer in any other circumstances.

This is what did it for us with BCBS; the insurer had just such an agreement with the hospital we went to, which then forced our gas man to sign an agreement to be billed in-network while pushing drugs at that hospital. His office conveniently forgot that agreement when sending us our balance bill, and had apparently also made the fairly large mistake of forgetting how much BCBS had actually paid them, so our bill was based on their reckoning that BCBS would have paid the 50% OON portion of their full bill (something like $4k), when BCBS had actually covered 80% of the in-network allowed amount (something like $7k). Once the office staff were reminded that a violation of the billing agreement the doctor had signed with the hospital was tantamount to insurance fraud, they changed their tune quickly, and the $4000 balance bill became a much-closer-to-expected $1500 coinsurance amount (still ludicrous IMO; the OBGYN who did all the "real" work during the labor and subsequent C-section billed us a grand total of $2800 for the in-hospital services, while the gas man banked nearly 3 times that much).

So, in all cases, the first step is to call your insurer. They may have paid incorrectly because of a billing error that didn't flag the treatment as "emergent". Or, they may have an agreement on file with the hospital that binds their service providers, like the ambulance company, to be compensated based on in-network rates and not to balance-bill. OR, they may just pay the difference between your coinsurance and the balance anyway.

If that doesn't work, you go to the service provider next, make your case that it wasn't your choice to use them, and when you went to the in-network hospital you had a reasonable expectation of in-network care. However, the service provider's usually much less willing to play ball with you, especially if this was a private company (often an ambulance service run in conjunction with the fire department will try to work with you on their bill, and if you simply can't pay they'll bill Medicaid).

Your last shot is to appeal to an external review panel (another provision of the ACA). Your insurer is required to tell you how to get in touch with this panel and submit your case.

Understand that legally, you are on the hook for services rendered until proven otherwise. It may well end up on your shoulders even after all this. However, that's become much less likely under Obamacare.

I'm sorry to hear about the problem you are having. Unfortunately many health systems often employ a mix of in-network and out-of-network staff and services across all types of services. This is often a way to charge more than they know the insurance company would be willing to pay. This is why I ask every provider (all doctors, nurses, etc.) whether they are in my network, even if they all practice in an in-network hospital, and have an in-network ambulance service on speed dial.

If you save $1,000.00 by finding an in-network ambulance service and putting them in your phone and this takes 6 minutes, this could be the one time in your life that you ever made $10,000 an hour!

What you can do to remedy the situation depends on your specific coverage. Here are my recommendations based on career experience in health insurance:

1) Get a copy of your policy's Benefit Booklet. Emergency care is sometimes treated differently.

This document is different than your enrollment materials, and spells out in detail what services your plan does or does not cover, and under what circumstances. For example, my benefit booklet describes what I am covered for in terms of ambulance and hospital services, how the coverage differs based on whether it is an emergency, under what circumstances these services are not covered, and a disclaimer about how out-of-network benefits are paid compared to in-network coverage.

2) If you are covered and submitted the claim yourself, call your insurance company.

Sadly, if you submitted the ambulance claim yourself because it was out-of-network, it is entirely possible that your insurer simply did not connect the dots and realize that this service was connected to the other services that were provided on an emergency basis. Many insurance companies are still in the IT dark ages and are simply unable to make those types of connections automatically. It is possible that they treated the claim as if it were a separate event and not an emergency.

Not covered? It's not over yet

If you are not covered under these circumstances, you may be out of luck. While the extra cost was a surprise to you, they would be within their contractual rights to only pay what was specified in your benefits. This is often based on the "usual and customary" amount for your geographical area. Your insurance company should tell you this amount if you ask. For example, if you are covered at 60% of the usual & customary cost, that means that your insurance company feels that this service should have only cost $625.00, and is paying you 60% of that amount or $325.00 based on your coverage.

Unfortunately, many ambulance services do not contract to be in-network providers precisely because they know they would be able to charge less, resulting in a "Gotcha" situation for an unaware patient. Some insurance companies (like mine) will send out warnings about these types of situations, but are often short on specific examples.

In this case, your best bet may be to negotiate directly with the ambulance service, and if at all possible, find a friend or friend-of-a-friend in the media or in government to cover your story in a newspaper/website/etc. and apply social pressure on both the insurer and the ambulance service. There are many examples where one or both parties agreed to negotiate a lower cost for these types of events because the situation the patient is being put in does not pass the public's "sniff test". In this case, you can also do the following:

3) Demonstrate that the service was medically necessary.

Ask the hospital to attest that your family member needed an ambulance and if possible, that this particular ambulance service was needed for a medical reason as opposed to an alternate in-network service (if one was available). You need to establish that you did not use the ambulance for convenience. Find out if any in-network ambulance services were available in your area. If not, that may also strengthen your case.

4) Demonstrate that you did not travel farther than necessary.

If you traveled to the nearest hospital available, that is more consistent with emergency care and may strengthen your case. While your trip was less than 60 miles, 60 miles is considered a fairly long ambulance ride outside of rural areas, but would be justified regardless of distance if you went to the nearest hospital that could treat your family member.

If you can effectively demonstrate that you didn't have a choice, or that there was no better option, you may be able to negotiate. If your only reason is that "I didn't know", you will have a tougher time.

Good luck!