How to Help Employees Prevent Surprise Medical Bills

The national debate on health care costs has a lot of moving parts. Recently, one element of rising costs — surprise medical bills — won the attention of lawmakers. If you’ve ever received one yourself, then you understand the havoc it can wreak on a patient’s finances.

Your employees aren’t fans of unexpected bills, either. A stack of unpaid bills that haven’t been budgeted for can force staff members to make difficult decisions about their health, and once they get to work, the lingering financial stress can kill their productivity on the job.

You can help your employees avoid unexpected medical costs. Here’s what to know.

What Are Surprise Medical Bills?

A surprise bill is, put simply, a medical charge someone didn’t realize they’d have to pay. This typically happens because of confusion over network — when receiving medical services provided by a doctor or specialist outside of a given health plan’s network, the billed amount is often much higher than what you would expect to pay for in-network care.

Your employees may choose to receive care in a particular hospital because the facility is in their network, not realizing that the providers within that facility may not be. Services from hospital-based providers and anesthesiologists make up a large slice of surprise medical bills, and these providers often charge more than others in the same area. As many as 20% of emergency room visits result in a surprise bill, and among insured individuals struggling to make payments on their medical bills, out-of-network charges are part of the problem a third of the time.

Balance billing — when a provider charges more than a typical negotiated rate and the individual ends up paying the difference in addition to their copay — is another obstacle. Here’s how it works: Say your health plan stipulates that you have a 40% copay for out-of-network services. You receive a bill of $1,000 for a service, but the typically negotiated rate (sometimes called usual or customary charge) is $700. In the end, you pay 40% of that $700 plus the $300 difference, leading to an enlarged bill of $580.

What Lawmakers Are Doing

Several states have taken action to prevent surprise medical bills, but their reach is limited. Many people with employer-sponsored or self-funded programs may be beyond the scope of state law. Consequently, Congress has taken up the issue with multiple bills in the House and Senate.

Surprise bills are the focus of the Senate’s STOP Surprise Medical Bills Act and the House’s No Surprises Act. These bills both aim to protect insured patients from receiving surprise bills, generally by preventing providers from billing patients for out-of-network charges — especially in cases where the patient could not have reasonably known the provider was not within in their network or couldn’t choose their provider, as in emergency care. In these instances, the insurance company would pay the provider a standard negotiated rate, similar to what an in-network provider would receive. The result? The patient doesn’t end up with an unexpected charge. The Senate bill has recently become part of a larger effort to reduce health care costs.

What You Can Do to Prevent Surprise Bills

It’s not yet clear whether these laws would directly affect employers, but they’re almost certain to affect your employees. In the meantime, supporting your staff starts with education. Work with your staff so they’re prepared to:

  • Get details before receiving care. For elective or planned care, encourage employees to check that all providers, not just all facilities, involved are within their network. Advise them to obtain an estimate before scheduling any care.
  • Verify billing codes with the doctor. Sometimes surprise bills appear after patients go in for what they thought was preventive care but was actually coded as a visit with a prior symptom. That distinction can add up to a fair amount of money. Warn employees that if this happens, the visit will be billed as a copay or coinsurance rather than as covered preventive care.
  • Work with the insurance company. Remind employees that you’re there to support them and that, as an employer, you can consult the insurance company about negotiating with providers on behalf of your workforce.
  • Know the laws. Look up surprise billing laws in your state and share that information with your employees so that they know what recourse they have.
  • Ask for a break. If an employee receives a surprise medical bill, they might want to try negotiating. Let workers know that they can go through the insurer or call the provider directly to ask for a lower rate. Many offices may also let them make payments over time if they ask for this option.

Surprise bills can come as a real shock to people, especially when they feel they have good health insurance coverage. Until a national effort to curb these bills succeeds, you can be an advocate of your employees and help them better understand how medical billing works.

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