We previously wrote a blog entry regarding patients who seek hospital treatment in an emergency situations and then get stuck with out-of-network bills for services rendered. Where the policy is governed by New York Law, the insurance company must hold the insured harmless and cover the entire amount due the hospital, less any co-pays or deductibles.
However, a different situation arises if the patient's employer is a self-insurer or if the policy is not governed by New York Law. Below are two examples of how to handle such a situation.
First, and quite common, is if your employer is self-funded or self-insured. What exactly does that mean? Typically, large employers will opt against buying regular health insurance contracts and paying monthly premiums; it is simply too expensive. Instead, they will hire a insurance company to be an administrator of benefits and the employer will "self-fund" or "self-insure" and pay the medical claims of its employees as they are incurred.
For example, large employer will make a determination that it is too expensive to pay an insurance company premiums directly. Instead, they will pay an insurance company to negotiate rates with medical providers, send payments to doctors and hospital, and generally perform all administrative functions of a traditional insurance company. Thereafter if an employee of the large company seeks medical attention, the insurance company processes the claim on behalf of the employer, who then pays the claim to the insurance company acting as a benefit administrator, and the benefit administrator will forward the money to the medical provider. However, in New York - employer is only required to pay the in-network rate for services rendered. Therefore, if a plan is out-of-network, the employer/plan will only cover a portion of the bill and the patient will be responsible for the remainder.
Herein lies the problem, New York State Insurance Law 3241(c) does not apply to employers who self-insure. It is somewhat of a loophole in the law whereby a medical provider is permitted to "balance bill" a patient under this situation. Therefore, the New York Department of Financial Services does not have jurisdiction to pursue a complaint against the employer or insurance carrier.
In this situation, there are two options. First, contact your HR department or employee benefits coordinator and see if they are willing to provide any help or assistance. If that does not yield any results, the Department of Labor has jurisdiction over these types of disputes. We have seen some patients have success in pursuing a complaint with the Department of Labor in getting this type of bill paid, or negotiated down. The DOL regional office is located in Boston, MA.
Second, only New York State Insurance plans are governed by Insurance Law Section 3241. If your employer has a plan that is based out of another State, the hospital is permitted to balance bill if the plan is out-of-network. Again, it would be sensible to first approach your employer via HR or benefits coordinator to seek assistance in paying for the bill. If that fails, a complaint should then be lodged with the State Agency that regulates insurance companies in the State where the plan originates.