Doctor Tripped Up by $64K Bill for Ankle Surgery and Hospital Stay

Doctor Lauren Hughes was visiting patients at a clinic about 20 miles from her Denver home in February when another driver slammed into her Subaru, totaling it. She was taken by ambulance to the nearest hospital, Platte Valley Hospital.

A shaken Hughes was examined in the emergency room, where she was diagnosed with bruising, a deep cut on her knee and a broken ankle. Doctors recommended immediate surgical repair, she said.

“They said, ‘You have this fracture and a big gaping wound in your knee. We need to take you to the operating room to wash it out and make sure there’s no infection,'” she said. “As a clinician, I said, ‘Yes.

She was taken to the operating room in the early evening, then admitted to hospital overnight.

A friend took her home the next day.

Then the bills arrived.

The medical procedure

Surgeons cleaned the cut on his right knee, which had hit the dashboard of his car, and realigned a broken bone in his right ankle, stabilizing it with metal screws. Surgery is usually recommended when a broken bone is unlikely to heal properly with a single cast.

The final bill

$63,976.35, charged by the hospital – which was not in network with the insurance plan she got through her job – for the surgery and the night.

The problem: should I stay or should I go?

Hughes’ insurer, Anthem, fully covered the nearly $2,400 ambulance ride and some smaller emergency room radiology charges, but denied the out-of-network hospital’s surgery and overnight charges.

“Sixty-three thousand dollars for a broken ankle and a cut knee, with no head injury or internal damage,” Hughes said. “Just to spend the night there. It’s crazy.”

Insurers have broad authority to determine whether care is medically necessary, meaning what is necessary for treatment, diagnosis or relief. And that decision determines whether and how much they will pay for it.

Four days after her surgery, Anthem informed Hughes that after reviewing the clinical guidelines for her type of ankle repair, her evaluator determined that it was not medically necessary for her to be fully admitted for a hospital stay.

If she had needed additional surgery or had other problems, such as vomiting or fever, a hospital stay might have been warranted, according to the letter. “The information we have does not show that you have these or other serious problems,” he said.

For Hughes, the idea that she should have left hospital was “ridiculous”. Her car was in a junkyard, she had no family nearby, and she was taking opioid painkillers for the first time.

When she asked for more details on determining medical necessity, Hughes was directed deep into her policy’s benefits booklet, which emphasizes that for a hospital stay, documentation must demonstrate that “safe and adequate care cannot be obtained on an outpatient basis.”

It turns out the surgery fees were denied due to a quirk in the insurance contract. Under Anthem’s agreement with the hospital, all requests for services before and after a patient’s admission are approved or denied together, Anthem spokeswoman Emily Snooks said.

A hospital stay is usually not necessary after ankle surgery, and the insurer found that Hughes did not need the type of “extensive and complex medical care” that would require hospitalization, Snooks wrote in an email to KFF Health News.

“Anthem has always acknowledged that Ms. Hughes’ ankle surgery was medically necessary,” Snooks wrote. “However, as the ankle operation was associated with the hospital admission, the entire request was refused.”

However, faced with bills from an out-of-network hospital where she was taken by emergency responders, Hughes didn’t understand why she wasn’t protected by the No Surprises Act, which takes effect in 2022. Federal law requires insurers to cover out-of-network providers as if they were in-network when patients receive emergency care, among other protections.

“If they had determined that this was medically necessary, then they would have to apply the cost of the No Surprises Act,” said Matthew Fiedler, a senior fellow at the Center on Health Policy at Brookings. “But the No Surprises Act will not override the normal determination of medical necessity.”

There was one more oddity in his case. During one of several calls Hughes made to try to settle his bill, an Anthem representative told him that things might have been different if the hospital had billed his hospitalization as an overnight “observation” stay.

Typically, this is when patients are kept in a facility so staff can determine if they need to be admitted. Rather than being related to length of stay, the designation primarily reflects the intensity of care. A patient with fewer needs is more likely to be charged for an observation stay.

Insurers pay hospitals less for an observation stay than for an admission, Fiedler said.

This distinction is a big problem for Medicare patients. Most often, the government health program will not pay for necessary nursing home care if the patient has not been formally admitted to the hospital for at least three days.

“This is a classic battle between providers and insurers as to which category a claim falls into,” Fiedler said.

The resolution

As a physician and director of a health policy center at the University of Colorado, Hughes is a savvier insurance taker than usual. Yet even she was frustrated during the months spent going back and forth with her insurer and the hospital — and worried when it looked like her account was going to be sent to a collection agency.

In addition to appealing the denied claims, she sought help from her employer’s human resources department, which contacted Anthem. She also contacted KFF Health News, which contacted Anthem and Platte Valley Hospital.

In late September, Hughes received calls from a hospital official, who told him they had “reduced the level of care” the hospital had billed his insurance for and resubmitted the claim to Anthem.

In a written statement to KFF Health News, Platte Valley Hospital spokesperson Sara Quale said the facility “deeply regrets any anxiety this situation has caused.” The hospital had “prematurely” and mistakenly sent a bill to Hughes before settling the balance with Anthem, she wrote.

“After careful review of Ms. Hughes’ situation,” Quale continued, “we have now stopped all billing. Additionally, we have informed Ms. Hughes that if her insurance company ultimately releases the remaining balance to her, she will not be billed for it.”

Anthem spokeswoman Stephanie DuBois said in an email that Platte Valley resubmitted Hughes’ bill to the insurer on Oct. 3, this time for “outpatient care services.”

An explanation of benefits that was sent to Hughes shows the hospital re-billed about $61,000, of which about $40,000 was reduced from the total by an Anthem rebate. The insurer paid the hospital nearly $21,000.

In the end, Hughes only owed a copay of $250.

Takeaways

There are places where patients receiving emergency care at an out-of-network hospital can fall through the cracks of federal billing protections, particularly during a phase that can be nearly indistinguishable to the patient, known as “post-stabilization.”

Typically, this happens when the medical provider determines the patient is stable enough to travel to an in-network facility using nonmedical transportation, said Jack Hoadley, a research professor emeritus at the McCourt School of Public Policy at Georgetown University.

If the patient prefers to stay onsite for further treatment, the out-of-network provider must then ask the patient to sign a consent form, agreeing to waive billing protections and continue treatment at out-of-network rates, he said.

“It’s very important that if they give you some sort of letter to sign, that you read it very carefully, because that letter could give them permission to get big bills,” Hoadley said.

If possible, patients should contact their insurer, in addition to asking the hospital billing department: are you on full admission, or kept under observation, and why? Has your care been deemed medically necessary? Keep in mind that determining medical necessity plays a key role in approving or denying coverage, even after services are provided.

That said, Hughes doesn’t remember being told she was stable enough to leave on non-medical transport, nor being asked to sign a consent form.

Her advice is to quickly and aggressively challenge insurance denials once they are received, including requesting that your case be escalated to the insurer and hospital executives. She said it was unrealistic to expect patients to face complex billing questions while in the hospital after a serious injury.

“I was calling my family,” Hughes said, “to alert my work colleagues of what had happened, to process the extent of my injuries and what needed to be done clinically, to arrange for my pet’s care, to do labs and imaging – to understand what had just happened.”

Bill of the Month is a participatory survey carried out by KFF Health News And The Well-Being of the Washington Post which dissects and explains medical bills. Since 2018, this series has helped many patients and readers reduce their medical bills, and it has been cited in states, at the U.S. Capitol, and at the White House. Do you have a confusing or scandalous medical bill you want to share? Tell us about it!