In February, physician Lauren Hughes was on her way to see patients at a clinic about 20 miles from her home in Denver when another driver hit her Subaru, causing the incident. She was taken by ambulance to nearby Platte Valley Hospital.
A shaken Hughes was seen in the emergency department where she was diagnosed with a bruise, a deep cut on her knee and a broken ankle. According to her, doctors recommended immediate surgery.
“They said, ‘You have a fracture and a big gaping wound on your knee. We need to take you to the operating room to flush it out and make sure there's no infection,” she said. “As a doctor, I thought, 'Yes.'
Early in the evening she was taken to the operating room and hospitalized overnight.
The next day, a friend took her home.
Then the bills came.
Medical procedure
Surgeons cleaned a cut on her right knee that went into the dashboard of her car and set a broken bone in her right ankle, stabilizing it with metal screws. Surgery is usually recommended when it is believed that a broken bone is unlikely to heal properly with a cast alone.
Final bill
$63,976.35, charged by a hospital that was not part of the insurance plan she received through her job, for surgery and an overnight stay.
Problem: Should I stay or should I go?
Hughes' insurance company, Anthem, fully covered the nearly $2,400 ambulance ride and some minor radiology costs in the emergency room, but denied the cost of surgery and an overnight stay at an out-of-network hospital.
“Sixty-three thousand dollars for a broken ankle and a cut knee, no head injuries or internal injuries,” Hughes said. “Just staying there overnight. It's crazy.”
Insurers have broad powers to determine Is help medically necessary? – that is, what is necessary for treatment, diagnosis or assistance. And that decision affects whether they'll pay for it and, if so, how much.
Four days after surgery, Anthem notified Hughes that after reviewing the clinical guidelines for her type of ankle repair, the reviewer concluded that it was not medically necessary to admit her completely for an inpatient hospital stay.
If she had required additional surgery or had other problems, such as vomiting or fever, she may have required a hospital stay, according to the letter. “The information we have does not indicate that you have any serious problems,” the message says.
For Hughes, the idea that she should have left the hospital was “ridiculous”. Her car was in a junkyard, there was no family nearby, and she was taking opioid painkillers for the first time.
When she asked for more details about medical necessity, Hughes was directed deep into her policy's benefit booklet, which states that for a hospital stay, documentation must show that “safe and adequate care cannot be obtained in an outpatient setting.”
It turns out that charges for the operation were denied due to the nature of the insurance contract. Under Anthem's agreement with the hospital, all claims for services before and after a patient's hospitalization are either approved or denied at the same time, Anthem spokeswoman Emily Snooks said.
A hospital stay after ankle surgery is not typically required, and the insurance company found that Hughes did not need “comprehensive, comprehensive medical care” that would have required hospitalization, Snooks wrote in an email to KFF Health News.
“Anthem has consistently agreed that Ms. Hughes' ankle surgery was medically necessary,” Snooks wrote. “However, because the ankle surgery was combined with hospitalization, the entire claim was dismissed.”
However, faced with bills from the out-of-network hospital where emergency workers took her, Hughes didn't understand why she wasn't protected No Surprises Lawwhich came into force in 2022. Federal law requires insurers to cover out-of-network providers as if they were in-network when patients receive emergency care, among other protections.
“If they determined it was medically necessary, they would have to apply the cost of the No Surprises Act,” said Matthew Fiedler, a senior fellow at the Brookings Health Policy Center. “But the No Surprises Act does not override the normal determination of medical necessity.”
There was another oddity in her case. During one of Hughes' many calls trying to sort out her bill, an Anthem representative told her that things might have been different if the hospital had billed her hospitalization as an overnight “observation.”
Typically, this is when patients are kept in the facility so staff can determine whether they need to be admitted. This designation is not tied to length of stay, but primarily reflects the intensity of care. A patient with fewer needs is more likely to be billed for an observation stay.
According to Fiedler, insurers pay hospitals less for observation stays than for hospitalizations.
This difference is a big problem for Medicare patients. Most often, the state health care program does not pay any care needed in a nursing home unless the patient was first officially admitted to hospitalization for at least three days.
“It's a classic battle between providers and insurers about what category a claim falls into,” Fidler said.
Resolution
As a physician and director of the University of Colorado Health Policy Center, Hughes is a savvier-than-usual policyholder. Still, even she was frustrated during the months she spent contacting her insurance company and hospital, and worried when it looked like her bill would be sent to a collection agency.
In addition to appealing the denied claims, she sought assistance from her employer's human resources department, which contacted Anthem. She also contacted KFF Health Newswho contacted Anthem and Platte Valley Hospital.
In late September, Hughes received a call from a hospital employee telling her they had “downgraded the level of care” the hospital had billed her insurance for, and re-filed the claim with Anthem.
In a written statement to KFF Health News, Platte Valley Hospital spokeswoman Sarah Quayle said the facility “deeply regrets any concern this situation has caused her.” The hospital “prematurely” and mistakenly sent Hughes a bill before it had worked out the balance with Anthem, she wrote.
“After carefully reviewing Ms. Hughes' situation,” Quayle continued, “we have stopped all billing to her. Additionally, we have informed Ms. Hughes that if her insurance company ultimately passes on the remaining balance to her, she will not be billed for it.”
Anthem spokeswoman Stephanie DuBois said in an email that Platte Valley resubmitted Hughes' bill to the insurer on Oct. 3, this time for “outpatient services.”
An explanation of benefits sent to Hughes showed the hospital billed about $61,000, with about $40,000 deducted from the total through Anthem's rebate. The insurer paid the hospital nearly $21,000.
In the end, Hughes only owed a $250 copay.
Conclusion
There are places where patients receiving emergency care at an out-of-network hospital may not qualify for federal billing protections, especially during a phase that can be nearly indistinguishable to the patient, known as “post-stabilization.”
Typically, this occurs when the healthcare provider determines that the patient stable enough to travel to a network facility using non-medical transportation, said Jack Hoadley, research professor emeritus at Georgetown University's McCourt School of Public Policy.
If the patient chooses to remain in place for further treatment, the out-of-network provider should then ask the patient sign the consent formagreeing to waive billing protection and continue treatment at out-of-network rates, he said.
“It's very important that if they give you some kind of letter to sign, that you read that letter very carefully because that letter could give them your permission to take some big bills,” Hoadley said.
If possible, patients should contact their insurer and also ask the hospital billing department: Are you being fully hospitalized or are you under observation and why? Was your care determined to be medically necessary? Keep in mind that the determination of medical necessity plays a key role in whether coverage is approved or denied, even after services have been provided.
However, Hughes does not remember being told she was stable enough to leave with non-medical transport or being asked to sign a consent form.
Her advice is to quickly and aggressively question insurance denials once you receive them, including asking for your case to be referred to insurance company and hospital management. She said expecting patients to deal with complex billing issues while in hospital after a serious injury is unrealistic.
“I was calling family,” Hughes said, “alerting my work colleagues about what happened, assessing the extent of my injuries and what needed to be done clinically, arranging care for my pet, doing labs and imaging—trying to make sense of what had just happened.”
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