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86% of Consumers Blame Insurers for Surprise Healthcare Bills

The majority of beneficiaries blame healthcare insurers for surprise billing, says a new consumer survey.

86 percent of consumers blame payers for surprise billing.

Source: Thinkstock

By Thomas Beaton

- Eighty-six percent of health plan beneficiaries primarily blame payers for surprise medical bills, according to a survey from NORC at the University of Chicago, indicating that insurers may wish to improve their financial education strategies and communicate more clearly with their consumers.

Participants were similarly willing to blame hospitals for unexpected bills, but only 71 percent of respondents said their physicians bear the brunt of the responsibility.

“Most Americans have been surprised by medical bills that they expected would be covered by their insurance,” said Caroline Pearson, a senior fellow at NORC.  “This suggests that consumers may have difficulty understanding their insurance benefits or knowing which providers are included in their plan’s network.”

“The bills are coming from either a physician or a hospital, and yet patients are really holding their insurance companies accountable,” she said to HealthPayerIntelligence.com.

“The inconsistency is notable, but it might not be that surprising.  We know people feel a high degree of confidence and trust in their physicians and hospitals, but there is rarely a similar level of trust associated with the insurance company. Insurance companies are viewed as entities that send bills, or as an 800 number, and they don't have the same level of credibility and trust in the minds of a patient.”

Pearson believes that health plans fall short when providing information to beneficiaries about plan benefits, which leads to confusion about the services covered by the plan.

“There's widespread confusion among consumers about their insurance. And as insurance designs become more complex, that confusion is likely to grow,” Pearson said.

One factor is out-of-network providers, who in some cases, are providers that patients haven't actually selected, like an ED physician or anesthesiologist,” she added.

“But I also think a lot of surprise bills are actually just due to people not really fully understanding their insurance benefits. We hear people talk about surprise bills when they get services that just aren't covered by their insurance.”

Consumers that have health plans with high deductibles or limited provider networks are also more likely to have surprise bills from out-of-network providers, NORC found.

“Plans with higher out-of-pocket costs, including deductibles, cause more confusion,” Pearson said.

“Plans with either narrow networks or tiered networks can also be more challenging to understand,” she added. “It is more common in an HMO plan people know where to receive primary care because their overall healthcare has more direction from the health plan. HMO coverage is usually pretty good at referring HMO beneficiaries to covered providers and medical services.”

The findings from NORC emphasize a need for payers to enhance their beneficiary engagement capabilities.

Customer service in the payer industry has been lackluster, according to a JD Power analysis of health plan customer service. Payers lag behind most industries in convenience and helpfulness.

Health plans may wish to explore implementing new technologies and adopting customer service-focused strategies to inform patients about their financial responsibilities

Pearson said that insurers are steadily making progress to improve member engagement but still need to address significant engagement challenges.

“Insurance companies have been more eager to actively engage their members. And they've been investing in tools and strategies to try to empower members with information to make better health care purchasing decisions,” Pearson said.

“But the data and anecdotes from consumers indicate that beneficiaries are still very confused about healthcare decision making. Unfortunately, healthcare and health insurance as industries have a long way to go in educating consumers and providing the tools consumers need to make fully informed purchasing decisions.” 

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