The Healthcare Billing "Shell Game"

When a patient with health insurance receives healthcare services, generally his/her out-of-pocket costs are limited to copays and deductibles. Lately, however, some healthcare providers with a beef against health insurers have been slamming patients with balance bills, according to

“A man who pays his bills on time is soon forgotten”—Oscar Wilde

When a patient with health insurance receives healthcare services, generally his/her out-of-pocket costs are limited to copays and deductibles. Lately, however, some healthcare providers with a beef against health insurers have been slamming patients with balance bills, according to a recent Los Angeles Times report.

In California, Kaiser Permanente claims that some 6,000 of its members in the southern part of the state have gotten balance bills—some as high as $50,000—from a hospital chain called Prime Healthcare Services. Kaiser recently got a restraining order from the Superior Court of Los Angeles County barring the hospital chain from collecting on any balance bills, or reporting the bills to national credit agencies, until a court hearing early next month. Kaiser is also in a legal battle with Cedars-Mount Sinai Medical Center over similar billing issues.

Providers are balance billing more often because they claim that, with skimpier payments from health insurers, they can’t afford not to. The bills often come as a shock to patients because they’ve already paid the deductibles and copays their insurance contracts call for and expect that their financial responsibility has been taken care of.

Hospital balance billing often happens when a patient is taken to an emergency room in a hospital that is not in his/her health insurer’s network. Out-of-network providers are generally not obligated to take the insurance company’s payment as payment in full. Although some states, like New Jersey and West Virginia, make health insurers pick up any balance bill, California law is vague on the subject. Many consumer advocates and public officials in the state, including Gov. Arnold Schwarzenegger, have called for a ban on the practice.

$15,609Average annual cost of medical services, including health insurance premiums, for an American family.(Milliman, Inc., 2008)

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