Tagged Out-Of-Pocket Costs

Even With Insurance, She Faced $227K In Medical Bills. What It Took To Get Answers.

The first surprise was the massive heart attack, which struck as Debbie Moehnke waited in a Vancouver, Wash., medical clinic last summer.

“She had an appointment because her feet were swollen real bad,” said Larry Moehnke, her husband. “But she got in there and it was like, ‘I can’t breathe, I can’t breathe!’”

Her life suddenly at risk, the 59-year-old was rushed by ambulance, first to a local hospital, where she was stabilized, and then, the next day, to Oregon Health & Science University across the river in Portland for urgent cardiac care.

That meant heart bypass surgery, replacement of one valve and repair of another. Just as she recovered from that, Debbie Moehnke developed a raging infection that required powerful IV antibiotics to treat. She spent a month in the hospital, some of it in intensive care, before she was discharged home.

That’s when she got the next surprise: Bills totaling more than $454,000 for the medical miracle that saved her life. Of that stunning amount, officials said, she owed nearly $227,000 after her health insurance paid its part.

“I wish I would have known. I would have said ‘no’ to life support,” said Debbie Moehnke, a former cocktail waitress who suffers from signs of early-onset dementia. “We’ll lose everything.”

Large “surprise bills” like the Moehnkes received have become a national epidemic outraging patients and politicians alike. Solutions have been elusive to date, even in a progressive state like Washington.

Lawmakers in Olympia this year are trying for the fourth time to pass legislation banning the practice that leaves consumers with huge out-of-pocket costs.

“Everybody agrees we’ve got to get the consumer out of being stuck in between,” said Mike Kreidler, the state insurance commissioner who has repeatedly backed the proposals.

While the protection would be beneficial to patients, there has been formidable and effective pushback from insurers, hospitals and doctors.

The central issue is money. Such surprise bills, or “balance bills,” typically occur when a patient’s insurer and a hospital or doctor not in its network don’t agree on what treatment is worth. The insurer — LifeWise Health Plan of Washington, in this case — pays what it judges to be fair. Providers then bill patients for the balance, which can easily tally tens if not hundreds of thousands of dollars.

As of December, 25 states had laws providing protection against balance bills, according to the Commonwealth Fund. Those laws take consumers out of the middle in billing disputes and force providers and insurers to negotiate directly for payment.

When an insurer and a provider disagree about how much a service is worth, who decides the legitimate charge? The proposed bills in Washington state use a “commercially reasonable” rate as the standard. But what does that mean in a country where medical prices are so variable?

“We need to make sure that any law that is enacted doesn’t tilt the scale toward one side or another,” said Chelene Whiteaker, senior vice president of government affairs for the Washington State Hospital Association.

The Washington state legislation borrows from a 2015 New York law that sends insurers and providers to baseball-style binding arbitration if they can’t come to an agreement about costs. Both parties remain cautious.

“I hope they will give up the idea that this is a chance to stick it to doctors,” said Dr. Nathan Schlicher of the Washington State Medical Association.

Leonard Sorrin, vice president of congressional and legislative affairs for Premera Blue Cross, which operates LifeWise, said in a statement that his organization is working for legislation that prevents balance billing, but also “maintains a contracting balance that allows health plans to build networks for members and pays the provider a fair rate.”

While patients can generally avoid balance billing by staying in-network, a life-or-death emergency such as Debbie Moehnke’s can make that impossible. Also, many in-network hospitals often use out-of-network doctors, leaving patients vulnerable to surprise charges.

So much money is at stake that, even when they exist, laws are filled with loopholes and offer only patchwork protection. For example, hospitals are not prohibited from sending balance bills; patients have to know they’re protected by law and go to considerable effort to contest them.

And about 60 percent of employer-based plans are governed by federal rather than state law. There is currently no federal prohibition against balance billing, although a bipartisan bill to end the practice was proposed last year.

Oregon, where Debbie Moehnke was treated, does have a law banning surprise bills, which took effect last year. But it applies only to out-of-network charges sent to a patient who received care at an in-network provider. And it covers only insurers regulated in the state, which excludes the Moehnkes’ plan, according to state insurance officials.

The proposed Washington legislation would ban balance billing for most of the state’s nearly 6 million insured consumers under age 65. But it could skip about 2 million people who get coverage through employers with self-funded plans. Those plans are regulated by a federal law, called ERISA, shorthand for the Employee Retirement Income Security Act of 1974, which doesn’t prohibit balance billing.

Self-insured employers would be allowed, but not required, to participate in provisions of the new law, if approved.

So far, however, change has come too slowly for families like the Moehnkes, who found themselves facing crushing bills, despite buying a well-subsidized plan on the state’s insurance exchange. In Debbie Moehnke’s case, the full bill from OHSU and affiliated providers was $454,550.54. Her insurance paid $227,959.19.

That left the Moehnkes with bills totaling $226,591.35.

“What do you think you’re going to do, squeeze blood out of a turnip?” said Larry Moehnke, 70, a big-rig truck driver.

Married 32 years, the Moehnkes and their two dogs, Coco and Belle, live in a 47-year-old mobile home in rural southwestern Washington. Larry Moehnke hasn’t been able to work since health problems of his own developed after his wife’s heart attack. They’re getting by on his Social Security income of $1,884 a month.

Charges for Debbie Moehnke’s emergency care totaled more than $454,000. Her health insurance plan agreed to pay about half the costs, leaving the couple responsible for the rest. With help from a patient advocate, the bill was eventually erased.(Michael Hanson for KHN)

LifeWise spokesman Bo Jungmayer said the insurer paid for her emergency care to the extent required under the Affordable Care Act.

Debbie Moehnke was hospitalized at OHSU from Aug. 14 to Sept. 12, 2018. She was initially admitted for her emergency heart treatment. While there, she developed an unidentified infection that required two additional weeks of care.

Only later did the couple learn that she could have been transferred to an in-network hospital, potentially saving tens of thousands of dollars.

“They never said anything about not being ‘in network’ or anything,” Larry Moehnke said.

Debra Tomsen, OHSU’s director of hospital billing and coding, said LifeWise officials should have notified the Moehnkes after receiving bills for nearly $250,000 halfway through her stay.

“Insurance should tell them they’re incurring out-of-pocket costs,” she said.

Jungmayer, of LifeWise, said it was up to OHSU to let Debbie Moehnke know about the high bills — and about the option to transfer to another hospital.

“Typically we allow that conversation between the provider and the patient while they’re there,” he said. “I don’t know why OHSU didn’t ask them.”

Early this month, after repeated inquiries about Debbie Moehnke’s care — first from a reporter, then from a patient advocate alerted by the Washington state insurance commission — the couple’s outstanding bills were resolved.

With the help of Jared Walker, who runs Dollar for Portland, a nonprofit group, the couple applied for a medical charity care waiver, in itself a complicated process. OHSU officials granted the waiver, erasing the sky-high debt.

“Their balance is now zero,” OHSU spokeswoman Tamara Hargens-Bradley confirmed in an email.

The Moehnkes are relieved, but they said they resent that they endured the stress of mounting bills and collection calls for six months when there was a solution available.

“Nobody ever said anything about charity care,” said Larry Moehnke.

That’s not how the process should work, said Kreidler.

“It shouldn’t be one where the squeaky wheel gets help,” he said. “There should be fairness and equality in the system. You shouldn’t have to file a complaint. This should be ingrained into the system so that when you have a problem and you’re due relief, you get it.”

New Health Plans Expose The Insured To More Risk

One health plan from a well-known insurer promises lower premiums but warns that consumers may need to file their own claims and negotiate over charges from hospitals and doctors. Another does away with annual deductibles but requires policyholders to pay extra if they need certain surgeries and procedures.

Both are among the latest efforts in a seemingly endless quest by employers, consumers and insurers for the holy grail: less expensive coverage.

Premiums are 15 to 30 percent lower than conventional offerings, but the plans put a larger burden on consumers to be savvy shoppers. Even with those concerns, the offerings tap into a common underlying frustration.

“Traditional health plans have not been able to stem high cost increases, so people are tearing down the model and trying something different,” said Jeff Levin-Scherz, health management practice leader for benefit consultants Willis Towers Watson.

New types of insurance plans are sprouting up as employers face rising health care costs and individuals who buy their own coverage without an Affordable Care Act subsidy struggle to pay premiums. That has led some people to experiment with new ways to pay their medical expenses, such as short-term policies or alternatives like Christian sharing ministries, which are not insurance at all, but rather cooperatives where members pay one another’s bills.

Now some insurers — such as Blue Cross Blue Shield of North Carolina and a Minnesota startup called Bind Benefits, which is partnering with UnitedHealth Group — are coming up with their own novel offerings.

Insurers say the two new types of plans meet the ACA’s rules, although they interpret those rules in new ways. For example, the new policies avoid the federal law’s rule limiting consumers’ annual in-network limit on out-of-pocket costs: one by having no network and the other by calling additional charges premiums, which don’t count toward the out-of-pocket maximum.

But each plan could leave patients with huge costs in a system where it is extremely difficult for a patient to be a smart shopper — in part, because they have little negotiating power against big hospital systems and partly because illness is often urgent and unpredicted.

If the plans prompt doctors and hospitals to lower prices, “then that is worth taking a closer look,” said Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute. “But if it’s simply another flavor of shifting more risk to employees, I don’t think in the long term that’s going to bend the cost curve.”

Balancing Freedom, Control And Responsibility

The North Carolina Blue Cross Blue Shield “My Choice” policies aim to change the way doctors and hospitals are paid by limiting reimbursement for services to 40 percent above what Medicare would pay. The plan has no network of doctors and hospitals.

This approach “puts you in control to see the doctor you want,” the insurer says on its website. The plan is available to individuals who buy their own insurance and small businesses with one to 50 employees, aiming particularly at those who cannot afford ACA plans, said Austin Vevurka, a spokesman for the insurer. The policies are not sold on the ACA’s insurance marketplace, but can be purchased off-exchange from brokers.

With that freedom, however, consumers also have the responsibility to shop around for providers who will accept that amount. Those who don’t shop, or can’t because it’s an emergency, may get “balance-billed” by providers unsatisfied with the flat amount the plan pays.

“There’s an incentive to comparison shop, to find a provider who accepts the benefit,” said Vevurka.

The cost of balance bills could range widely, but could be thousands of dollars in the case of hospital care. Consumer exposure to balance bills is not capped by the ACA for out-of-network care.

“There are a lot of people for whom a plan like this would present financial risk,” said Levin-Scherz.

In theory, though, paying 40 percent above Medicare rates could help drive down costs over time if enough providers accept those payments. That’s because hospitals currently get about double Medicare rates through their negotiations with insurers.

“It’s a bold move,” said Mark Hall, director of the Health Law and Policy Program at Wake Forest University in North Carolina. Still, he said, it’s “not an optimal way” because patients generally don’t want to negotiate with their doctor on prices.

“But it’s an innovative way to put matters into the hands of patients as consumers,” said Hall. “Let them deal directly with providers who insist on charging more than 140 percent of Medicare.”

Blue Cross spokesman Vevurka said My Choice has telephone advisers to help patients find providers and offer tips on how to negotiate a balance bill. He would not disclose enrollment numbers for My Choice, which launched Jan. 1, nor would he say how many providers have indicated they will accept the payments.

Still, the idea — based on what is sometimes called “reference pricing” or “Medicare plus” — is gaining attention.

North Carolina’s state treasurer, for example, hopes to put state workers into such a pricing plan by next year, offering to pay 177 percent of Medicare. The plan has ignited a firestorm from hospitals.

Montana recently got its hospitals to agree to such a plan for state workers, paying 234 percent of Medicare on average.

Partly because of concerns about balance billing, employers aren’t rushing to buy into Medicare-plus pricing just yet, said Jeff Long, a health care actuary at Lockton Companies, a benefit consultancy.

Wider adoption, however, could spell its end.

Hospitals might agree to participate in a few such programs, but “if there’s more take-up on this, I see hospitals possibly starting to fight back,” Long said.

What About The Bind?

Minnesota startup Bind Benefits eliminates annual deductibles in its “on-demand” plans sold to employers who are opting to self-insure their workers’ health costs. Rather than deductibles, patients pay flat-dollar copayments for a core set of medical services, from doctor visits to prescription drugs.

In some ways, it’s simpler: no need to spend through the deductible before coverage kicks in or wonder what 20 percent of the cost of a doctor visit or surgery would be.

But not everything is included.

Patients who discover during the year that they need any of about 30 common procedures outlined in the plan, including several types of back surgery, knee arthroscopy or coronary artery bypass, must “add in” coverage, spread out over time in deductions from their paychecks.

“People are used to that concept, to buy what they need,” said Bind’s CEO, Tony Miller. “When I need more, I buy more.”

According to a company spokeswoman, the add-in costs vary by market, procedure and provider. Less than 7 percent of members should need add-in services in any given year, Bind estimates.

On the lower end, the cost for tonsillectomy and adenoidectomy ranges from $900 to $3,000, while lumbar spine fusion could range from $5,000 to $10,000.

To set those additional premiums, Bind analyzes how much doctors and facilities are paid, along with some quality measures from several sources, including UnitedHealth. The add-in premiums paid by patients then vary depending on whether they choose lower-cost providers or more expensive ones.

The ACA’s out-of-pocket maximums — $7,900 for an individual or $15,800 for a family — don’t include premium costs.

The Cumberland School District in Wisconsin switched from a traditional plan, which it purchased from an insurer for about $1.7 million last year, to Bind. Six months in, Superintendent Barry Rose said, it is working well.

Right off the bat, he said, the district saved about $200,000. More savings could come over the year if workers choose lower-cost alternatives for the “add-in” services.

“They can become better consumers because they can see exactly what they’re paying for care,” Rose said.

Levin-Scherz at Willis Towers said the idea behind Bind is intriguing but raises some issues for employers.

What happens, he asked, if a worker has an add-in surgery, owes several thousand dollars, then changes jobs before paying all the premiums for that add-in coverage? “Will the employee be sent a bill after leaving?” he said.

Must-Reads Of The Week From Brianna Labuskes

Happy Friday! Headline writers across the world (read: yours truly) breathed a sigh of relief this week when the venture formally known as “the health initiative founded by Amazon, Berkshire Hathaway and JPMorgan Chase” finally picked a name. After more than a year of tight-lipped secrecy, they settled on “Haven.” What do you guys think? I’m just thankful it’s short.

On to what you may have missed this week!

FDA Commissioner Scott Gottlieb sent shock waves through Washington and the industry when he announced he’ll be retiring at the end of the month. Gottlieb was a standout in the anti-regulatory, pro-business Trump administration as one of the most activist commissioners in recent years. Over the past two years, he has launched what could be termed a crusade against teen vaping — his most recent action coming just the day before the announcement, when he called out Walgreens and gas stations for selling tobacco products to minors — and cracked down on “miracle cures” and unregulated stem cell clinics and supplements, among other initiatives. Public health advocates are fretting that with him gone, some of the progress they’ve seen will be chipped away.

The departure is also a blow to the administration in that Gottlieb is a highly liked health official who worked well with Congress, winning over even Democratic lawmakers on Capitol Hill. Behind the scenes, he was known as someone who was “accessible,” would field lawmakers’ questions and was actively working on things that would make Congress happy. “I’ve never seen an administration official, Republican or Democrat, that has worked with the Hill so well on a bipartisan basis,” a senior congressional aide told Stat.

That’s not to say he didn’t have his critics. A decision on approving a powerful opioid late last year, in particular, drew fire from many advocates.

Gottlieb said his decision to leave was based on the fact that he missed spending time with his family, and White House officials confirmed that President Donald Trump did not seek the resignation.

Now the big question is: Who is going to replace him?

Stat: With Gottlieb’s Resignation, the Trump Administration Loses Its Backroom Whisperer on Capitol Hill

Politico: ‘Something Very Rare’: FDA’s Gottlieb Aggressively Tackled Difficult Issues

Stat: The Likely, Possible, and Longshot Contenders to Replace Gottlieb at FDA


As expected, legal challenges to the administration’s changes to the family planning rules came not in a trickle but a flood. California Attorney General Xavier Becerra, in his 47th lawsuit against the administration, said the rules restricting abortion referrals were like something out of 1920 and not 2019. Apart from California’s case, 20 states and D.C. announced they will be filing suits. Then came the announcement that Planned Parenthood Federation of America and the American Medical Association will also challenge the restrictions, deeming the changes a “domestic gag rule” and an overreach from the administration.

The New York Times: California Sues Trump Administration to Block Restrictions to Family Planning Program

The Washington Post: Planned Parenthood, American Medical Association Sue Trump Administration Over Abortion ‘Gag Rule’


Facing increasingly intense outrage over insulin prices, Eli Lilly has decided to offer an authorized generic version of its drug for half the cost. Stories of people dying after they rationed newly pricey insulin have been circulating with ever-increasing frequency, and lawmakers have made it their priority to specifically rout out answers about insulin price hikes. In that context, Eli Lilly’s move here seems more damage control than charitable, but it also puts them in good company with drugmakers who have been hotfooting it to avoid whatever worse would come out of Congress if they don’t make some changes.

Stat: Lilly Will Sell a Half-Price Version of Its Insulin. Will It Appease Critics?


Former Colorado Gov. John Hickenlooper officially threw his hat into the narrowing 2020 field this week. Hickenlooper seems to gravitate more toward the moderate wing of the Democratic Party, saying he supports universal health care in principle but refusing to get behind a “Medicare-for-all” plan. His evolution on gun control (as a governor who oversaw a mass shooting in the state where Columbine occurred) is also worth checking out.

The New York Times: John Hickenlooper on the Issues


There has always been a gap swallowing people who make too much for health law subsidies or Medicaid but not enough to comfortably afford insurance through the exchanges. A new county-by-county analysis looks at just how tough it is for the people who fall into the holes created by the ACA. A particularly striking figure? In almost all of Nebraska, a 60-year-old with a $50,000 income would pay from 30 to 50 percent of that income in premiums for the least expensive ACA health plan.

The Washington Post: ACA Premiums Rising Beyond Reach of Older, Middle-Class Consumers

Meanwhile, the Trump administration is interested in bolstering interstate insurance sales despite there being little appetite for it in the past and experts saying it wouldn’t lower premiums. In fact, the practice is already allowed under the health law, and no one does it because insurers think it’s just not worth it.

The Wall Street Journal: Trump Administration Looks to Jump Start Interstate Health-Insurance Sales


A teenager who got vaccinated against his mother’s wishes was the star witness at a hearing this week sparked in part by the measles outbreak. Ethan Lindenberger, a high school senior, hoisted the blame for his mother’s deeply rooted beliefs squarely on Facebook’s shoulders.

The anti-vaccination movement has long flourished on Facebook, partly because of the site’s search results and “suggested groups” feature. On Thursday, the company announced it has developed a policy to try to curb that culture of misinformation on vaccines, saying it will rank pages and groups that spread that kind of information lower and will keep them out of recommendations or predictions in search.

The Washington Post: Ethan Lindenberger: Facebook’s Anti-Vax Problem Intensified in Congressional Testimony

The New York Times: Facebook Announces Plan to Curb Vaccine Misinformation


After 12 long years, scientists finally announced that a second patient appears to have been cured of HIV. While the news was well-welcomed around the world — “This will inspire people that cure is not a dream,” said Dr. Annemarie Wensing, a virologist — there are some practical obstacles to consider. For example, bone marrow transplants (which is how both patients were cured) are extremely risky, especially since there are drugs that exist that can control HIV fairly well.

The New York Times: H.I.V. Is Reported Cured in a Second Patient, a Milestone in the Global AIDS Epidemic


In a scathing ruling that could have wide-reaching ramifications for the insurance industry, a judge blasted UnitedHealth Group for policies that he says were aimed at effectively discriminating against patients with mental health and substance abuse disorders to save money. The decision is part of a larger debate over parity in relation to coverage for mental health services versus other illnesses like diabetes. Insurance companies have been getting around parity requirements with internal rules, but advocates are viewing the judge’s ruling as a warning shot that those loopholes will no longer be tolerated.

The New York Times: Mental Health Treatment Denied to Customers by Giant Insurer’s Policies, Judge Rules

The FDA this week approved a cousin of party drug “Special K” to help people with severe cases of depression, marking a shift away from traditional antidepressant medications. While many said the news would give hope to desperate patients, others are worried about the potential for abuse.

The New York Times: Fast-Acting Depression Drug, Newly Approved, Could Help Millions


Honorable mention for International Women’s Day: A veritable “tsunami wave of women veterans” over the past several years is forcing the VA to step up in terms of meeting female-specific health care needs. Among basic issues are seeing to it that doctors are trained to deal with gynecological matters and ensuring that VA facilities have child care services available when female veterans come in for appointments.

The Wall Street Journal: As More Military Women Seek Health Care, VA Pursues Improvements


In the miscellaneous file for the week:

• Nearly 600,000 children have dropped off of states’ Medicaid and CHIP rolls over a one-year span. While states rush to assure anyone asking that it’s because the economy is improving, public health experts are alarmed at the disturbing trend.

Stateline: Child Enrollment in Public Health Programs Fell by 600K Last Year

• In a “craning your neck at the car wreck” sort of way, this profile on disgraced pharma bro Martin Shkreli is a wild read. Through the help of a contraband smartphone, Shkreli is, from his prison cell, still pulling the strings at his old company, schmoozing up his prison friends “Krispy” and “D-Block,” and planning his big comeback.

The Wall Street Journal: Martin Shkreli Steers His Old Company From Prison — With Contraband Cellphone

• Last year, doctors burst onto the gun-debate scene through the help of a viral tweet that directed them to “stay in their lane.” But a new analysis provides an interesting look at which lawmakers are getting the most money from physician-related PACs. (Hint: It’s overwhelming ones who are against tighter gun regulations.)

The Wall Street Journal: Doctors’ PACs Favored Candidates Opposing Gun Background Checks

• In slightly terrifying news, research that was halted over concerns it could create deadly flu viruses that could be used by terrorists was just given the green light again —without any explanation as to why. *Gulp*

The New York Times: Studies of Deadly Flu Virus, Once Banned, Are Set to Resume

• Everyone is expecting a big settlement in the sweeping opioid case against Purdue Pharma. But what happens if the opioid maker declares bankruptcy first?

Stat: If Purdue Pharma Declares Bankruptcy, What Happens to the Opioid Cases?

• Luke Perry’s early death from a stroke this week has many middle-aged Americans worried.

The New York Times: Here’s How Strokes Happen When You’re As Young As Luke Perry

• Drug companies and doctors are in a dirty war over fetal transplants. It may seem click-baity at first, but the issue is highly revealing of how the health industry works when it comes to something that could make people lots of money.

The New York Times: Drug Companies and Doctors Battle Over the Future of Fecal Transplants


That’s it from me! Have a great weekend!