09/17/2009 05:12 am ET Updated Nov 17, 2011

Think You're Covered? Think Again!

While comforting her daughter on the way to the nearby emergency room, Maria had a thought she didn't express. "Times are tough -- I'm so glad we've got health insurance." Ana's cut just above her forehead was still bleeding, and would probably need stitches. At the hospital, which was listed on her insurance plan, Maria was relieved when the doctors told her Ana's head injury was minor and that they'd fixed her cut so it would quickly heal. A week later, as she watched a recovered Ana happily resume active play with her friends outdoors, Maria opened the letter from her insurance company. And gasped. Thanks to her insurance, the ER visit would only cost her $50, as she'd expected. But, despite the insurance company's contribution, the bills didn't stop there. The total charges Maria faced paying for Ana's care in the ER topped three thousand dollars!

We've all heard about the heartbreaking cases where insurance companies have canceled coverage and refused to pay hospital bills for patients after they've received treatment. But, as in Maria's case, even when the insurance company forks out their required share, patients and their families could still be on the hook for big bucks. When she aimed for her "in-plan" emergency room, Maria didn't know that, while the ER itself was "in-plan," its doctors, hired on contract, were not. And, the CT scan they'd ordered to ensure that Ana didn't have bleeding on the brain, performed in a trailer adjacent to the hospital, had been done by a partner company of Radiology doctors, who -- you guessed it -- were also not participants in Maria's preferred provider insurance.

Because the ER and the X-ray doctors were "out of plan," Maria's insurance company would only pay 60% of their fees, not 80% as with "in plan" providers. To her dismay, Maria quickly discovered that, for out-of-plan providers, the insurance would pay 60% of the rates it had negotiated with in-plan doctors. Anything over that became Maria's responsibility. In-plan doctors might bill the insurance company $500, of which $400 would be paid by the insurance company and $100 by Maria. Out-of-plan doctors who had no deal with the insurance company could charge much more -- $1000, for example -- for the same service. The insurance company would then pay 60% of the $500 agreed upon for in-plan doctors -- not the $1000 demanded. The final insurance payout would be $300 and Maria would be left with a $700 bill. Had the ER warned Maria that their doctors' services might be out-of-plan so that she could opt to go to another facility? Not a chance.

As a doctor, I've seen many cases like Maria's, where patients think they're abiding by insurance company rules, only to find that their final bills are overwhelming. That's why it's critical for everyone who "has health insurance" to "read the fine print" and develop an "emergency preparedness plan" for healthcare that ensures you or your family won't be caught in a financial bind in case of illness or injury. Here are six steps to giving your insurance a "check-up":

  • First, pull out and read the insurance company contract. Are there any exclusions, areas or types of care that are not covered? If so, you may need to consider buying a supplementary insurance plan or investing in a medical savings plan -- in advance.
  • You probably have your favorite doctors -- but are they still part of your plan? Contracts between insurance companies and medical groups or practitioners change frequently. You may want to review and ensure that your doctor is still participating in your insurance plan on at least a quarterly basis.
  • Your local hospital or hospitals may also have agreements with the insurance plan, but, as in Maria's case, some of their contractors or partners may not. Your quarterly review should include clarification of what hospital services are "in-plan" and what services may be or may have become "out-of-plan."
  • Once you've identified the doctors and health care facilities you may be visiting, and ensured they're "in-plan," develop your own "healthcare emergency plan" in case of illness or injury. Designate which doctors you will try to see, and which hospitals/ERs you are going to patronize in advance of need.
  • If you have an emergency that is handled by a 9-1-1 call and subsequent ambulance transport with emergency medical technicians, you may not have a choice about which hospital the ambulance is directed to take you. Obviously, your medical condition will guide the EMTs and the doctors -- the nearest hospital may be a life-saving choice, even if it's not a participant in your insurance plan. The EMTALA law requires that all ERs see and treat all patients until they are medically stable -- whether or not they are insured. However, less critical "emergencies" may afford you some input into the ambulance team's decision where to drive you -- don't be afraid to suggest a particular ER close by that is within your insurance plan.
  • Finally, after a service is provided, remember that many healthcare bills are negotiable -- even with insurance companies. Do try to appeal an insurance company decision if you believe you were treated unfairly or erroneously. And, you might also be successful if you approach non-plan doctors and ask if they might consider reducing their charges in your case to the level of in-plan reimbursement to reduce your out-of-pocket costs.

That's exactly what Maria did. Fortunately, the out-of-plan doctors agreed to reduce her charges to her plan levels in her case, resulting in a much more manageable bill for Ana's ER visit. Maria hopes Ana won't need another ER visit in the future, but, with her own "healthcare emergency plan" now in place and up to date, Maria knows if illness or injury strikes, she'll be prepared to do the best for her family, medically and financially.