DENVER — When a new state law went into effect in January 2020, the benefit to Coloradans was supposedly straightforward: You won't get a surprise — and often exorbitant — medical bill.
Under the legislation, healthcare providers were now required to provide a patient notice, ahead of time, of a bill if they were seeking care from an out-of-network facility or provider.
The law stemmed, in part, from concerns over Coloradans who sought care at an in-network facility but were hit with unexpected large bills because the provider, such as a surgeon, was out-of-network.
But there was a caveat in the Colorado law, one that limited its impact: The law only applied to state-regulated health insurance plans. And many Coloradans, especially those who work for a large employer, are covered through federally regulated, employer self-funded plans.
Denver7 learned of this stipulation in the Colorado law while investigating issues surrounding out-of-network anesthesia.
Often times, Denver7 learned, patients aren’t finding out until weeks before a surgery that their anesthesiologist is out of network.
The Denver7 investigation uncovered how an ongoing dispute between insurance companies and providers is to blame, leaving patients in the middle with few options.
One woman interviewed by Denver7 said she could not find an in-network anesthesiologist within 50 miles of her home, forcing her to have surgery with an out-of-network provider.
The woman has UMR Insurance, a United Health Care company, through her former job at King Soopers.
United says it does have in-network options in the Denver metro, including more than 420 anesthesiologists and nurse anesthetists. United pointed to a dispute with the U.S. Anesthesia Partners (USAP), claiming USAP's rates have become "egregiously high."
"But we also know that surprise bills are incredibly stressful for patients and regret that USAP has decided to surprise bill our members," a United spokesperson said in a statement to Denver7. "We hope USAP will rethink its decision to take advantage of its patients to maximize its profits.”
There is some relief on the way: Federal legislation passed last year to prevent surprise bills for all insurance plans. The legislation goes into effect in 2022.
The anesthesia issues aside, the woman who talked to Denver7 highlighted the difference between her federally regulated plan and ones that are regulated by the state.
For state-regulated insurance plans, providers must meet certain "geographic access standards," according to the Colorado Division of Insurance.
For example, a primary care provider must be available within five miles of a plan enrollee, if the enrollee lives in a large metro area. That distance goes up to 30 miles for rural residents, for primary care providers.
A distance of 50-100 miles or more for an in-network provider "shouldn't be happening," said Michael Conway, commissioner of the Colorado Division of Insurance.
"The surprise billing legislation that passed was designed exactly to protect consumers from that situation," Conway said. "So if consumers are finding themselves in a situation where they're getting a surprise bill, again, that's an instance where we want to hear from folks."
But again, those state regulations and the surprise billing law only apply to insurance plans that are regulated by the state. And many larger employers have self-funded plans, which are regulated by the federal government, not Colorado.
Data from the Center for Improving Value in Health Care estimated several years ago that about 30 percent of all insured Coloradans are on a self-funded plan through their employer.
Understanding the difference in regulations — and why that's not protected by the surprise bills law — requires an understanding of self-funded plans. Under a self-funded plan, an employer funds the insurance plan and decides what benefits are offered in the plan.
Since the employer is providing the benefits, the self-funded plans are only subject to regulations under the U.S. Department of Labor’s Employee Retirement Income Security Act (ERISA).
The ERISA has certain standards a plan must meet, but it does not decide what benefits and services are required to be covered.
What you can do
Even though the Colorado Division of Insurance (DOI) only has certain plans it can regulate, the agency is still a good resource for insurance-related questions.
"We can do a lot more to resolve issues when it is a plan we regulate, but when it’s not a plan we regulate, we can arm people with information, questions to ask, and point them in the right direction," said Vincent Plymell, assistant commissioner of the Division of Insurance.
The DOI recommends that patients immediately contact their insurance company if they're faced with having to see an out-of-network provider. The agency also recommended that companies should work with their consumers to find in-network providers.
Also, patients should never use an out-of-network provider and assume their bill will be paid.