Protections against surprise billing didn't stop a huge hospital bill. Why not? : Shots - Health News Billing experts and lawmakers are playing catch-up as providers get around new consumer protections, leaving patients like Danielle Laskey of Washington state with big bills for emergency care.

A surprise-billing law loophole? Her pregnancy led to a six-figure hospital bill

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It's time for our February Bill of the Month. Dr. Elisabeth Rosenthal is editor-in-chief of our partner Kaiser Health News. Doctor, all right. Tell us about this month's patient. Who are we meeting?

ELISABETH ROSENTHAL: We're meeting Danielle Laskey from Washington state, who was about six months pregnant with her son and needed specialty pregnancy care really fast when she was snagged in what we discovered appears to be a loophole in the nation's much-vaunted surprise billing law, which was passed last year. That's the rule that's supposed to protect patients financially when they need emergency care. But in this case, the family got hit with pricey out-of-network hospital bills not once but twice.

MARTÍNEZ: OK. Reporter Stephanie O'Neill spoke with Danielle. Let's listen to her story. And after, we'll have you tell us some more about that loophole in the law.


STEPHANIE O'NEILL, BYLINE: It's super early on a chilly February morning, and 6-month-old Corper Laskey is, as usual, wide awake and ready to rock. He's a happy, healthy baby, but getting him here was rough, says his mom, Danielle. Complications in the pregnancy started two months before his birth while the Laskey family was vacationing about 3 hours from home.

DANIELLE LASKEY: The first day we were there, I had this big, like, gush of fluid. And then over the course of the day, it happened one or two more times. And we started to get obviously concerned.

O'NEILL: And rightfully so. Danielle was losing the fluid that protects the fetus. Her specialist obstetricians wanted her hospitalized immediately and for the remaining seven weeks of her pregnancy. So they sent her to the only hospital where they admit patients, Swedish Medical Center in Seattle. Then about a week after giving birth, Danielle came down with fever and chills.

LASKEY: The complication that I had with my daughter, placenta accreta - that happened again.

O'NEILL: Placenta accreta occurs when portions of the placenta become embedded in the muscles of the uterus. Her doctors removed the remaining placenta, and Danielle went home the same day. All seemed great, says Danielle, until the hospital sent a bill demanding she pay $15,000 out-of-pocket for that second procedure.

LASKEY: I was like, this can't be right. They must have not sent it to the right insurance, or something was wrong. I didn't actually believe that that was the bill.

O'NEILL: Shortly after, the hospital sent her the bill for her first day, the one leading up to the birth, claiming she was on the hook for a whopping $120,000. That's when Danielle learned that Swedish Medical Center was not in her insurance network, even though her obstetricians, who are part of the Swedish Health System, were in network.

LASKEY: It never crossed my mind that it wouldn't be in network.

O'NEILL: And Danielle, herself a registered nurse, says during her weekslong stay at the hospital, no one mentioned that important detail to her.

LASKEY: We were kind of just gearing ourselves up, I think, emotionally and mentally to fight this as long as we had to and/or to sell our house.

O'NEILL: Ultimately, the Laskeys didn't have to sell their home. Danielle and her husband appealed the out-of-network classification for Danielle's first visit on the grounds that patients are supposed to be protected from out-of-network billing in emergency situations and that her seven-week stay was due to an emergency. In January, the insurer granted their request and zeroed out the $120,000 bill. But that still left the Laskeys with the $15,000 bill. For NPR News, I'm Stephanie O'Neill.

MARTÍNEZ: All right, we're back. Dr. Elisabeth Rosenthal. Wow. I mean, with the sticker shock - $120,000, then 15,000. I mean, that's just all these numbers being thrown at someone. So what happened with that second bill?

ROSENTHAL: Well, the good news is soon after our reporter reached out to the hospital and insurance company, Danielle got word that her second hospital visit was also reclassified as in-network. So those super steep bills went away for the Laskeys. A spokesman for the hospital told us they disagreed with some of the details and characterizations of events presented by the Laskeys, but they didn't tell us what those were. And in any case, the bill was zeroed out. You know, but here's the rub. The insurer, Regence, still argued that surprise billing protections didn't apply to the Laskeys' situation and that the health plan did not violate that new law in its original decision. So they kind of said, we're going to zero out the bill, but we were right.

MARTÍNEZ: Yeah because logically, it seems like maybe it did. I mean, does that bring us to the legal loophole in that law that you mentioned?

ROSENTHAL: Yeah, exactly. Usually, hospitals and doctors, as we know, are either in-network or out-of-network for your insurance plan. It's pretty black and white, right? But in this case, the hospital and insurer used a different category. They called it a participating provider, which is in a kind of gray area in between. So the federal law protects patients from bills from an out-of-network provider in an emergency. But the insurer argues the hospital was not out-of-network, even though it wasn't in-network either. Billing experts we spoke to said they'd never heard of this kind of contract before, but it's out there.

MARTÍNEZ: And that sounds like an incredibly tricky thing for a patient to navigate.

ROSENTHAL: Especially once you're sick. But unfortunately, the message is, once again, buyer beware. Even in emergencies before you are admitted, patients should ask if the hospital is in their health network and read your insurance plan paperwork. Look for that new phrase I'm hearing, participating provider, which might be an indication that you'll be on the hook for high out-of-network prices. Those words, unfortunately, may yet be another red flag for sick patients.

MARTÍNEZ: So, Doctor, does this mean that the federal surprise bill law is not working?

ROSENTHAL: Oh, no. Quite the opposite. Overall, the law is doing lots of good, protecting many, many Americans from unpredictable out-of-network pricing. But, you know, patients can still get hammered, we're discovering, especially if the provider network where you live is small or there's some ambiguity about whether the care you received was an emergency or not. So lawmakers and even billing experts are playing catch up as we kind of learn more about the new law. And critics say that providers seem to be finding ways to sidestep the spirit of the law, if not its actual words.

MARTÍNEZ: That is Dr. Elisabeth Rosenthal. Now, if you have a confusing medical bill that you want us to review, please go to NPR's Shots blog and tell us all about it. Doctor, thanks.

ROSENTHAL: Thank you.


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