Hospitals and Insurance Providers Exploit Loopholes in No Surprises Act, Hurting Consumers

By Consumers for Quality Care, on March 22, 2023

The wording and fine print in contracts between insurers and hospitals may determine whether in-network or out-of-network costs apply, leading to surprise medical bills, according to NPR. 

Danielle Laskey experienced a severe pregnancy complication and sought help from the Swedish Maternal & Fetal Specialty Center-First Hill, a specialized pregnancy clinic. The clinic ordered her to be admitted to the Swedish Medical Center/First Hill hospital, where she spent seven weeks before giving birth to a healthy boy. 

Danielle and her husband, Jacob, knew that the specialty pregnancy clinic was in their insurer’s network, Regence Blueshield, but found out later that the hospital they were admitted to was not, even though the clinic only admits patients to this hospital.

The Laskeys were also told initially that Danielle’s hospital stay was considered an emergency and that their out-of-pocket costs would be limited to around $2,000. But the couple received a bill totaling nearly $122,000 after their insurance backtracked, saying that her stay was not an emergency because she didn’t enter the hospital through the emergency department.

The Laskeys learned Swedish Medical Center was not an in-network provider, but had a contract with their insurer as a “participating provider,” and because of this designation, was not in violation of surprise billing laws.  

The distinction between a participating provider and an in-network provider is relatively new and even perplexed consumer experts interviewed by NPR..

Ultimately, the treatment was billed as in-network and the Laskeys six-figure medical bill was erased.

Loopholes like these must be addressed by lawmakers and regulators to ensure consumers are never saddled with crippling medical expenses through no fault of their own and that the No Surprises Act works as lawmakers intended when they passed this landmark legislation.