John Clausen knew a hip replacement was serious business, so he and his wife did everything they could to prepare. That included calling their insurance company to make sure the surgeon and hospital were covered, and confirming with the doctor’s office that he did, indeed, accept Clausen’s insurance.

Everything seemed in order and the 46-year-old Gibbstown, Gloucester County, resident’s surgery in August went smoothly. Then the billing statement came.

A certified registered nurse practitioner had assisted during the procedure — which Clausen, who was under anesthesia, did not know. Her services cost $3,000, which wasn’t covered because she was not in his insurance network.

“You try to do everything right … ,” said Clausen, trailing off as he remembered the combination of shock, anger, and helplessness he felt.

One of the few things Republicans and Democrats have been able to agree on lately is that this type of medical bill shouldn’t happen. Congress and the Pennsylvania legislature are both considering bipartisan legislation to address surprise bills — but it’s unclear whether either will act anytime soon. New Jersey already has a law that prohibits providers in the state from sending surprise out-of-network bills to patients.

Congress has just days left before its session wraps up for the holidays. The Pennsylvania House of Representatives is not expected to vote on its bill before the year’s end, either, and may leave the matter up to Congress in the new year.

“We know one in three Pennsylvanians have received a surprise bill in the last year. This is a serious issue that Harrisburg should resolve,” said Patrick Keenan, director of consumer protections and policy for Pennsylvania Health Access Network, a patient advocacy organization.

Surprise bills often unavoidable

Surprise bills can happen when consumers go to a hospital or doctor’s office that is in their insurance network but are treated by an out-of-network provider working at the facility.

In-network providers agree to accept contractual rates and aren’t allowed to bill patients beyond the amount their plan requires them to pay. Out-of-network providers aren’t bound by such agreements. If the amount an insurer pays the provider (or says the patient owes) is less than what initially was billed, out-of-network providers can bill patients for the rest.

Surprise bills often arise in situations where consumers had little or no ability to check whether the provider treating them would be in network, such as during an emergency or childbirth.

Clausen had no way of knowing about — or consenting to — the out-of-network nurse who assisted with his surgery, which was performed by a Rothman Orthopaedic surgeon at Riddle Hospital in Media, Pa.

The private surgical assist group contracted by Main Line Health, which owns Riddle Hospital, sent Clausen a statement for $3,000 that included a note explaining that the practice does not contract with most insurance plans.

Gina Pino, Rothman’s director of business services, said this was the first call she’d received about a patient getting a surprise bill from a provider assisting a Rothman surgeon.

“This is going to go up to the next level of administration, to contact Riddle and have a discussion,” Pino said. “We don’t want our patients to have any unforeseen charges. ... We do not want that to be the perception or the process patients follow.”

Main Line Health said that the billing statement was an error and that Clausen’s account had been cleared.

Donna Farrell, a vice president of corporate communications for Independence Blue Cross, also said Clausen isn’t responsible for the charge and that the insurer’s contracts “include language intended to protect our members from unexpected out-of-pocket costs."

“Mr. Clausen’s experience is not what we expect for our members,” Farrell said.

But it’s unclear what Clausen could have done differently or — if the charge was a mistake — why the mistake wasn’t realized sooner, before he contacted The Inquirer.

When Clausen asked about the charge, his insurer said he was responsible because the provider was out of network, according to a voicemail he shared with a reporter. After his appeal to Independence was denied, he called the billing company and negotiated a lower price — $500 — to be paid off at about $80 a month.

The debt was cleared only after The Inquirer asked Independence, Main Line, and Rothman about the issue.

“We are currently investigating this question of why the error was not discovered when the patient called the billing company and are ensuring that processes are put in place to make sure it does not happen again,” said Bridget Therriault, a spokesperson for Main Line.

'This is creating financial chaos’

A new study by researchers at Yale University found that at in-network hospitals, about 11% of assistant surgeons, 12% of anesthesiologists and pathologists, and 6% of radiologists were out-of-network. Preventing these specialists from billing out-of-network would save about $40 billion annually, the study found.

At the same time, 40% of consumers also report having insufficient savings to cover a $400 emergency and medical debt is already a top reason for personal bankruptcy, according to the Federal Reserve.

“This is creating financial chaos,” Keenan said.

The problem has caught the attention of lawmakers from both political parties, as each grapples for ways to put their stamp on health care — a top voter concern — ahead of the 2020 election.

In December, leaders from key Senate and House committees announced bipartisan legislation that combines two popular approaches, but stopped short of calling for a vote. Surprise bills under $750 would be subject to baseline pricing, in which out-of-network providers are required to accept the average in-network rate for their area. More expensive bills would be sent to arbitration.

Pennsylvania’s bill, backed by Republican Tina Pickett and Democrat Tony DeLuca, would set baseline pricing, adjusted by specialty and geography, for all out-of-network bills. Providers would be allowed to call for arbitration to verify that the baseline price is valid.

Independence Blue Cross, the area’s largest insurer, supports the Pennsylvania legislation, which Kimberly Kockler, a vice president of government affairs for the insurer, said “strikes a much-needed balance.”

Doctor groups and hospitals have pushed back against both state and federal proposals, arguing they give unfair advantage to insurers, who may use the new rules as reason to drop from their network doctors with contracted rates above the baseline payment.

“Both of these bills would essentially put a great amount of incentive to insurers, who would almost certainly take advantage of that,” said Arvind Venkat, a Pittsburgh-based emergency physician and president of the Pennsylvania College of Emergency Physicians.

Deal or no deal?

Pennsylvania lawmakers recognize their proposal is a compromise.

“Although there is a debate between the insurance industry and the doctors about how payments should be made, what that process looks like ... the one thing we all agree on is taking the consumer out, meaning a consumer will not get a surprise balance bill,” said Alan J. Cohn, who represents DeLuca as the House Democrats’ insurance committee executive director.

Pickett’s office did not respond to a request for comment in time for publication.

For now, patients are left in the lurch.

Clausen is relieved to have his bill for hip surgery resolved but worries what could happen next time. He urged lawmakers to take action.

“When you pay for health insurance and do your homework and are told everything is good, that’s what it should be,” Clausen said. “This is borderline criminal.”