Real World Coverage for Hospital Stay with HMO

[John Galt III]

I'm considering signing up with a Capital Blue Cross HMO with $250 deductible and $2,250 out-of-pocket max (after ACA subsidies) and zero percent coinsurance. The Cap Blue website tells me that if I have a hospital stay the facility fee (including hospital room) is fully covered, and the physician/surgeon fees are fully covered. The term they use is *no charge*. This of course is for everything *in network*. Another caveat is that the facility must be pre-authorized. And of course coverage would begin only after the $250 deductible was met. I found it hard to believe I would come out of a hospitalization with *no charge* so I asked a Cap Blue rep if it ever happened that someone had a hospitalization at no charge, and he said yes, it is a common occurrence. Another thing I found unbelievable was that the rep said that if an out-of-network provider were used without my permission, they would pay the out-of-network provider anyway, at the discounted insurance rate. Sounds too good to be true. Not sure how to find a *believable* plan. Not sure if a PPO would be any more believable. Might as well stay with this HMO? Any comments welcome! Thanks

 

[MBSC]

Another thing I found unbelievable was that the rep said that if an out-of-network provider were used without my permission, they would pay the out-of-network provider anyway, at the discounted insurance rate. Sounds too good to be true.

If it qualifies as an emergency diagnosis, the OON provider is paid at the negotiated rate, and in most states you can be balanced billed the difference. The chart in the link below says 13 states restrict OON balance billing for HMO plans. This is where the service was performed, not where your policy was written. There is usually no coverage for non-emergency OON providers with an HMO. If you need a specialist and one is not in-network in your area, the plan may grant a waiver for you to see an OON specialist in certain cases.

State Restriction Against Providers Balance Billing Managed Care Enrollees | The Henry J. Kaiser Family Foundation

...the physician/surgeon fees are fully covered. The term they use is *no charge*. This of course is for everything *in network*.

It's not unusual for at least one P.A.R. (Pathologist/Anesthesiologist/Radiologist) to be OON and bill.

 

[ziggy29]

Another thing I found unbelievable was that the rep said that if an out-of-network provider were used without my permission, they would pay the out-of-network provider anyway, at the discounted insurance rate. Sounds too good to be true.

Well, if this is a legitimate emergency, the ACA requires out of network emergency care to be paid at the in-network rate.... BUT in most states, as already mentioned, you can still be balance billed.

 

[John Galt III]

Thanks for the replies. I think I'll go ahead with the HMO since the balance billing and out-of-network problems also occur with non-HMO plans, apparently.

 

[audreyh1]

Thanks for the replies. I think I'll go ahead with the HMO since the balance billing and out-of-network problems also occur with non-HMO plans, apparently.

The difference is that most HMOs have no insurance coverage at all for out-of-network providers. One large exception is the BCBS Advantage Plus HMO which will cover 50% of an out-of-network provider (50% of what they would normally cover), but has no out-of-network max OOP which means no limit. So in that case you do have some coverage and perhaps a chance that the provider will accept what BCBS offers (no balance billing). Whereas with most HMOs you are completely on your own if you go out of network.

You are right that PPOs don't protect you from balance billing. They do provide some protection from out-of-network providers. The coinsurance is usually lower than the BCBS example above (25% for Humana Choicecare PPO), and they usually have a max OOP for out-of-network, even if it is much higher than the in-network.

Emergencies are an exception. I'm not sure about the balance billing rules in an emergency (think you can still be subject), but the insurance companies - PPO or HMO are supposed to handle their side as if it was all in network.

The big deal is the size of the network. PPOs tend to have larger networks, so you are less likely to find yourself with an out-of-network provider. However, if the HMO network is large enough, and covers your main providers and needs, you are fine.

 

[John Galt III]

That's right, the HMO I am looking at has no coverage for out of network. So if they shove an out of network person on me without my knowledge/permission, and bill me some large amount, my plan is to refuse to pay, or agree to pay $20 per month forever. The HMO is with Capital Blue Cross. I called them and they said I would not be charged if an out of network person got involved without my permission. Hard to believe, but maybe it would work out that way. Even if I had a PPO with 20% coinsurance on out-of-network, that would still be a huge and unpayable amount in my estimation. Plus the possibility of balance billing when out of network still exists in a PPO.

 

[BarbWire]

If it qualifies as an emergency diagnosis, the OON provider is paid at the negotiated rate, and in most states you can be balanced billed the difference. The chart in the link below says 13 states restrict OON balance billing for HMO plans. This is where the service was performed, not where your policy was written. There is usually no coverage for non-emergency OON providers with an HMO. If you need a specialist and one is not in-network in your area, the plan may grant a waiver for you to see an OON specialist in certain cases.

State Restriction Against Providers Balance Billing Managed Care Enrollees | The Henry J. Kaiser Family Foundation

It's not unusual for at least one P.A.R. (Pathologist/Anesthesiologist/Radiologist) to be OON and bill.

If I'm reading this table correctly, then there are at most 9 states in which one has protection from balance billing in an emergency situation? Is that right?

And if, say, you go to the ER with chest pains and then are admitted to the hospital for, say, bypass surgery, would the hospitalization and surgery be considered an "emergency" or is that limited to ER treatment? If so, then the hospitalization/surgery would be subject to balance billing, right?

Yikes.

 

[MBSC]

Emergencies are an exception. I'm not sure about the balance billing rules in an emergency (think you can still be subject), but the insurance companies - PPO or HMO are supposed to handle their side as if it was all in network.

Emergency services are still subject to balance billing in most states. Be careful with the "handle their side as if it was all in network" statement for PPOs. The provider payment is at the in-network rate but the out-of-network deductible can be applied to the member. The OON deductible and MOOP is sometimes higher with a PPO and the ACA emergency services rule does not apply to deductibles and MOOP.

Let's say an OON emergency results in $90,000 of billed charges and $50,000 in allowed charges. The HMO has $6,000 deductible and MOOP. The PPO has the same in-network benefits but out-of-network deductible and MOOP are $12,000.

HMO: You pay $6,000 deductible and balance bill of $40,000 (before you negotiate this down). Total: $46,000.

PPO: You pay $12,000 OON deductible and balance bill of $40,000 (before you negotiate this down). Total: $52,000. Consult your PPO plan documents to see if they use this method.

The regulation discusses cost-sharing, and the protections provided by the ACA in emergency situations where out-of-network providers are used, but it's important to note that they refer specifically to copays and coinsurance - but NOT to deductibles and out-of-pocket maximums. So if you have a health insurance plan that charges a $75 copay for emergency services, that amount applies regardless of whether you're treated at an ED that is in-network or out-of-network. But if your health plan has an out-of-network deductible that is higher than the in-network deductible, the higher amount can be applied even in an emergency situation. And the out-of-network maximum out-of-pocket can also apply.

Reference: Out-of-network care, emergencies, and balance billing

Plans that offer coverage for emergency services:
May apply a deductible that is generally applicable to out-of-network benefits to emergency services provided out-of-network.

Reference: ACA Addresses Questions About Emergency Services | Health Net Broker Pulse

 

[MBSC]

If I'm reading this table correctly, then there are at most 9 states in which one has protection from balance billing in an emergency situation? Is that right?

And if, say, you go to the ER with chest pains and then are admitted to the hospital for, say, bypass surgery, would the hospitalization and surgery be considered an "emergency" or is that limited to ER treatment? If so, then the hospitalization/surgery would be subject to balance billing, right?

The 3 columns on the far right apply to PPO plans. 9 states offer balance billing protection to PPO plan members.

At some point after surgery at the OON hospital, the attending physician will notify your hospital case worker you are stable enough to be discharged, transferred to a physical rehab facility, or transferred to another hospital. The case worker will coordinate with your insurer to transfer you to an in-network facility. At this point the ACA emergency services rule ends and you potentially can be balance billed for those services received.

 

[audreyh1]

Emergency services are still subject to balance billing in most states. Be careful with the "handle their side as if it was all in network" statement for PPOs. The provider payment is at the in-network rate but the out-of-network deductible can be applied to the member. The OON deductible and MOOP is sometimes higher with a PPO and the ACA emergency services rule does not apply to deductibles and MOOP.

Let's say an OON emergency results in $90,000 of billed charges and $50,000 in allowed charges. The HMO has $6,000 deductible and MOOP. The PPO has the same in-network benefits but out-of-network deductible and MOOP are $12,000.

HMO: You pay $6,000 deductible and balance bill of $40,000 (before you negotiate this down). Total: $46,000.

PPO: You pay $12,000 OON deductible and balance bill of $40,000 (before you negotiate this down). Total: $52,000. Consult your PPO plan documents to see if they use this method.

Reference: Out-of-network care, emergencies, and balance billing

Reference: ACA Addresses Questions About Emergency Services | Health Net Broker Pulse

Good points - although in the case of the BCBS Advantage+ HMO, they have a 2x deductible for out-of-network, so you'd have the same situation as the PPO.