Balance Billing

Consumers overwhelmed by medical bills... lack the resources to fight
balance billing on their own. With an eye on their legal fees, private
attorneys hesitate to take on individual disputes over amounts that usually
don't exceed $1,000.

Glenn Siglinger is one exception. He fought a lengthy battle against a surgeon
all the way to the Connecticut Supreme Court. In 2006 that court upheld a trial
verdict awarding the Siglinger family nearly $40,000 in punitive damages from a

The case began in December 1995, when Siglinger's wife, Laura, and his
daughter, Allison, then three, were injured in a car accident. Both were taken to
the emergency room at Bridgeport Hospital, where Dr. Charles Gianetti, the
plastic surgeon on call, stitched a cut on Allison's face. The Siglingers' insurer
paid Gianetti $1,981 under a contract with the family's health plan. Later in
1996, he claimed the Siglingers owed him an unpaid balance of $4,496. The
Siglingers refused to pay, and Gianetti sued them. Ruling for the Siglingers, the
trial judge ordered Gianetti to pay their legal fees, in addition to the punitive
damages. The Siglingers say he hasn't paid them anything.

"It was traumatic enough seeing my daughter go through a serious accident,
but then to go through this," says Siglinger, a real estate investor. He and his
wife have since divorced; Allison is now 15. "I wonder how many people paid
these bills without giving it a second thought," he says. The Siglingers are
among 150 patients Gianetti has sued for unpaid balances, according to state
records. The Connecticut Attorney General's Office is scheduled to go to trial
next year against Gianetti, having accused him in a civil suit of improper billing.

Gianetti, 69, no longer practices medicine, but he continues to pursue former
patients in court. He says the state of Connecticut has "nothing on me,"
declining other comment.

Medical Bills You Shouldn't Pay
By Chad Terhune
Bloomberg Business Week
August 27, 2008

In a controversial practice known as "balance billing," health-care providers are
going after patients for money they don't owe

Editor's note: For a CBS Evening News report on balance billing that was made
in collaboration with BusinessWeek, go to:


As health-care costs continue to soar, millions of confused consumers are
paying medical bills they don't actually owe. Typically this occurs when an
insurance plan covers less than what a doctor, hospital, or lab service wants to
be paid. The health-care provider demands the balance from the patient.
Uncertain and fearing the calls of a debt collector, the patient pays up.

Most consumers don't realize it, but this common practice, known as balance
billing, often is illegal. When doctors or hospitals think an insurer has
reimbursed too little, state and federal laws generally bar the medical providers
from pressuring patients to pay the difference. Instead, doctors and hospitals
should be wrangling directly with insurers. Economists and patient advocates
estimate that consumers pay $1 billion or more a year for which they're not

Yolanda Fil, a 59-year-old McDonald's (MCD) cashier in Maple Shade, N.J., got
tangled up with balance billing after gall bladder surgery in 2005. She and her
husband, Leon, a retired state transportation worker, have coverage through
Horizon Blue Cross Blue Shield of New Jersey. Horizon made payments on Fil's
behalf to the hospital, surgeon, and anesthesiologist. Then, in 2006, Vanguard
Anesthesia Associates billed Fil for an unpaid balance of $518. Soon, a
collection agency hired by Vanguard started calling Fil once a week, she says.
Although she thought her co-payment and insurance should have covered the
surgery, Fil eventually paid the $518, plus a $20 transaction fee. "I didn't have
any choice," she says. "They threatened me with bad credit."


Luckily for Fil, her insurer decided to get tough with Vanguard. In December
2006, Horizon Blue Cross sued the medical practice for balance billing Fil and
more than 8,000 other policyholders who received invoices for a total of $4.3
million for service from 2004 to 2006. A New Jersey judge last year ordered
Vanguard to stop billing the patients and provide refunds to those who had
paid. Fil is awaiting her $538 refund. Vanguard didn't respond to requests for

National statistics aren't available, but there's little doubt that many consumers
unwittingly fall victim to balance billing. The California Association of Health
Plans, a trade group in Sacramento, estimates that 1.76 million policyholders in
that state received such bills in the past two years, totaling $528 million. The
group found that 56% paid the bills. "Patients think they owe this money, and it
causes tremendous stress and anxiety for people," says Cindy Ehnes, director
of the California Managed Health Care Dept. "It is inappropriate to put the
patient in the middle of this."

Balance billing most frequently occurs when medical providers participating in a
managed-care network believe the plan's insurer is imposing too deep a
discount on medical bills or is taking too long to pay. California, New Jersey,
and 45 other states ban in-network providers from billing insured patients
beyond co-payments or co-insurance required by the plan. Similarly, federal
law prohibits providers from billing Medicare patients for unpaid balances.

These laws require medical providers to seek payment only from the insurer for
services covered by the plan. Many states also shield insured patients from
balance billing by out-of-network hospitals and doctors in emergencies, since
patients usually don't control who treats them in those situations. (Bans on
balance billing generally don't apply when a patient gets an elective procedure,
such as cosmetic surgery, or seeks out-of-network, non-emergency service
without a referral.)

Some physicians, hospitals, and labs take advantage of consumer
befuddlement, argues Jane Cooper, CEO of Patient Care, a Milwaukee firm that
employers hire to help insured workers fight billing mistakes. "Medical providers
count on the fact people will pay these bills because they don't have time to
figure it out," Cooper says.

Quest Diagnostics, the country's largest lab chain, with revenue last year of
$6.7 billion, has faced investigations and lawsuits over allegations of balance
billing. A private suit that seeks class-action status in federal court in Newark,
N.J., alleges that Quest has balance-billed thousands of patients covered by
private insurance and Medicare, turning over many accounts to debt collectors.
Quest, based in Madison, N.J., denies any wrongdoing.

In a separate case in 2003, the New York Attorney General's Office alleged that
Quest encouraged consumers to overpay or billed them after Quest had
already been paid by insurers. The company denied wrongdoing in the New
York case and said only five people were due modest refunds. Quest agreed to
pay New York $150,000 in legal costs and revise some practices, such as
waiting longer to dun patients while a claim is pending with an insurer. A Quest
spokeswoman says: "The vast majority of our transactions occur problem-free
when correct information is provided by patients, physicians, and payers."

As some authorities get tougher, physicians are trying to overturn prohibitions
on balance billing. The American Medical Assn. is lobbying Congress to allow
balance billing within the Medicare program, as was allowed until 1991. Two
Republican congressmen, Tom Feeney of Florida and Tom Price of Georgia,
have sponsored legislation that would accomplish that goal. The AMA cites
declining reimbursements from Medicare and private insurers in support of its
bid to bill patients directly. AMA member David McKalip, a neurosurgeon in St.
Petersburg, Fla., says patients can trust doctors to behave ethically and not
gouge the poor: "Doctors will know up front which patients are willing to pay"
beyond what the government reimburses...

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