For tourists and business travellers venturing to the US, one of their biggest headaches is the sales tax and tipping culture, whereby sometimes over 30% is added to bills in restaurants and the service industry. With no free healthcare in the US, when things go wrong, the headache of high costs is passed over to assistance companies and insurers alike, who are often faced with astronomical bills for emergency treatment, outpatient appointments and surgery.

Travellers are often aware that they have excellent cover, particularly British travellers with £10 million thresholds for medical cover, so they have no fear in calling 911, or presenting themselves at the nearest emergency room for treatment. They have cover, they have declared all their pre-existing conditions, so why would they hesitate to do so? However, this is just the start of a complex process for the industry, with payers looking to navigate the system and mitigate costs, while treating their customers fairly.

ITIJ has reached out to industry experts in the assistance, healthcare and cost containment community to find out more about the challenges they face when dealing with US hospitals, and how they approach them, asking: can anything be done to navigate the system and reduce costs?

With contributions from Sharon Solomon, Head of Medical Assistance, Allianz Partners; Richard Rose, Commercial Manager, Direct Line Group; and Paul Staples, Head of Network, Collinson, what we discovered was the potential for inflated bills, lack of cooperation, and even the bullying tactic of sending in debt collection agencies after the patients themselves.  

Medical costs have been rising “at an alarming rate” for the past two years, according to Solomon. She explained: “It is increasingly difficult to obtain medical reports and updates, meaning that the patients are staying longer than necessary.” And, according to Staples, “insurers are facing greater exposure to higher costs”. Final bills are taking longer to come through,which in turn increases the costs internally for case management and claims teams working behind the scenes. Rose added that it is not only “’the claims teams, but also the underwriting teams that have increased costs, driven by the speed of receiving the final bills, from either the hospitals or their subcontractors”.

As US hospitals will often not treat patients without a guarantee of payment from the insurers or the family, it leaves the industry often on the back foot, especially when urgent care is needed. Staples and Rose both highlighted that some medical facilities are not interested in working with third-party providers, and instead engage in the services of a debt collection agency, which goes directly to the patient and their family. This causes extreme stress and worry that they could be financially ruined and potentially lose their homes, while they are recovering from an accident or potentially life-threatening illness, and had all the cover they needed. This further adds to the workload, internal costs, and complaint ratios for the insurer, while minimising the opportunity to negotiate costs down to a fair and reasonable level.

Operating on a framework of intricate codes and charges, the system can be difficult to decipher, hindering effective negotiation, therefore making it challenging for international insurers to navigate and negotiate effectively

Both Staples and Rose also report that the original billed amounts often differ vastly from the final amount requested, and, given the time to receive the final costs, this makes it increasingly difficult to set accurate reserves. It also creates additional work and time to understand what they are being asked to pay for. Rose told ITIJ that bills can be “highly inflated, and often there are examples of overtreatment or an overcautious approach to diagnostics and testing”.

He confirmed: “This is evidenced by the willingness to offer substantial discounts, and not challenging the agents when certain tests or overtreatment are struck from the bill.”

Rose suggested: “By having a transparent approach to charges and treatment, it would benefit both insurers and patients alike.” However, as the international travel insurance industry is such a minor part of the behemoth that is the US healthcare system, there is little leverage, he added.

The inherent structure of the healthcare system in the US is so difficult to navigate that it can be hard for an international insurer, assistance company and their patient to understand. Solomon summed this up by stating: “The fragmented system of various hospital entities across multiple US states leads to a disjointed and stressful medical claims journey for patients and their families.”

Monica Rummelhoff, Executive Director of GMMI, agreed that navigating the complexities of the US healthcare billing system poses a significant challenge for international insurers. She explained: “Operating on a framework of intricate codes and charges, the system can be difficult to decipher, hindering effective negotiation, therefore making it challenging for international insurers to navigate and negotiate effectively. The absence of standardised pricing, a departure from practices in many other countries, adds an additional layer of complexity. Moreover, understanding and adhering to state-specific regulations further complicates the negotiation process, impacting the overall leverage that international insurers may have.”

Gitte Bach, President and CEO of New Frontier Group, said that the lack of uniformity across the system is part of what makes it so complex for international (and domestic!) payers. She told ITIJ: “Navigation is difficult due to its decentralised nature and fragmentation which involves multiple stakeholders including hospitals, ambulatory surgery centres, employed and contracted providers delivering care in hospitals, network contracts with hospitals, pharmacies, labs, and systems that do not contain any existing data on international patients. Also billing practices across organisations are highly variable and can be inconsistent, with different providers having different billing systems and rates.” And bills, said Bach, are being increased by factors such as medical inflation, the high cost of medical education and technology, a fee-for-service model that incentivises more care rather than better care, reduced reimbursement by the US government programmes, and a lack of transparent pricing which can lead to unexpected high charges.

When asked how international insurers approach negotiating hospital bills, it was summed up by Staples in one word: “Cautiously.”

From the payer’s perspective, Staples went on to say: “There needs to be an understanding of the facility they are working with, along with a tightly managed case from the outset.” Medical facilities have underlying costs, and various factors of treatment which may cover the surgery, but not the anaesthetist required, or even pain relief after discharge. “Facilities may not be interested in negotiating,” Staples confirmed, “as the costs are what they expect to be paid, which may be exaggerated. This means that simply seeking a percentage discount will not work.”

A deciding factor on the willingness to negotiate may also be down to the buying power and size of the organisation they are dealing with

A deciding factor on the willingness to negotiate may also be down to the buying power and size of the organisation they are dealing with. Solomon indicated that Allianz Partners, thanks to its size and global reach, “can implement a collaborative approach across their business units to achieve maximum discounts”. This means that it has potentially more sway to negotiate than an independent assistance company in Europe.

Medicare publishes rates as a useful guide to healthcare costs, and many facilities show chargemaster prices for services, but often these reflect the costs for self-pay patients, who are not covered by an insurance policy. Insured rates could vary, vastly, and frequently do. Staples, nonetheless, says that he finds the Medicare rates are “set independently”, so can give a good benchmark to work towards.

Businesses without a global reach or US partner offices will often turn to preferred provider organisations (PPOs) to step in and negotiate on their behalf, but is it as simple as just applying a discount, especially if the bills contain charges that were exaggerated? Is it a true discount, or does it just look good in an audit?

Our contributors all agree that their cost containment partners have a pivotal role to play in the reduction of hospital bills, but argue that a direct contract with the facility could yield a better cost saving overall, while the level of care to the patient is unaffected.

This also allows for better benchmarking, understanding of the bills themselves, and the opportunity to scrutinise what they are being charged for. Insurers and assistance companies should always be asking: is it fair?

Direct Line Group has “looked at an alternative solution to negotiating”, advised Rose, whereby it is taking on a hybrid approach. It is currently evaluating the results between a direct approach to the healthcare provider, against the traditional method of third-party (PPO) engagement. Only time will tell how effective both approaches are for the company.

For smaller companies, using a PPO could allow them to secure higher discounts with a facility in their own network, rather than trying to knock on the door themselves.

If the facility is out of network for the PPO, and is reluctant to negotiate with them, then the insurer or assistance company could attempt to negotiate directly by way of a one-off deal. This carries its own risks, as technically the hospital does not need to negotiate, the patient is there, they have had their treatment, they have astronomical cover, and the hospital wants the bill paid. Let’s not forget the debt collection agency option previously mentioned.

For smaller companies, using a PPO could allow them to secure higher discounts with a facility in their own network, rather than trying to knock on the door themselves

Partnering with a domestic cost containment company is one of the options for international payers having problems with high medical bills from a US hospital. Leveraging established networks with healthcare providers and years of medical claims management experience gives an opportunity to negotiate favourable rates and terms. Rummelhoff added: “Our legal and regulatory expertise ensures compliance with state-specific laws, enhancing negotiation capabilities and overall cost containment efforts.” She continued: “Our US licensed nurses, certified professional coders, bill auditors, and doctors meticulously conduct line-by-line reviews of medical procedures, uncover billing errors such as upcoding, double-billing, unbundling, and are examined to be medically appropriate. This approach not only contributes to cost containment but also ensures that international payers are billed appropriately for the services rendered within the US healthcare system.”

The biggest tool in navigating US healthcare from an international insured patient point of view is directional care, which involves telling the patient where to go, therefore giving the assistance company the opportunity to send them to the most appropriate hospital, in network, with the option for a better deal.

In an ideal world, the patient would call their helpline, and advise that they need to go to hospital, meaning that the assistance coordinator can direct them to the nearest facility with which they have an agreement, either directly, or via a cost containment company. As reported across the board in the assistance industry, insured patients (or their families) deal with the insurance secondary to getting urgent or non-urgent care, once they are already admitted to a facility.

All of ITIJ’s contributors to this article confirmed that patient health and wellbeing is key, and while policy wording may dictate that calls are made to them before seeking treatment, in the case of urgent medical care, it is not reasonable to expect their first thought to be calling the helpline. It has to be noted, though, that people are aware of the astronomical costs in the US, so many will call beforehand, as they are concerned the costs will fall to them if they do not follow the rules.

Unless there is a valid medical reason for moving the patient to a contracted hospital or healthcare provider, it is very hard to justify to the family why the patient is being moved across the city – or, in some cases, even to another city. Not only does this move disrupt the patient, but the current hospital could also advise the patient against being moved medically, and any inconvenience afforded to the family by way of visiting or check-ups is likely to result in a complaint.

Even if the customer inadvertently follows the undisclosed directional care rules, and calls ahead of seeking treatment, it is not as simple as you might think. With the onus on a very busy call handler, with calls stacking up, is there really time to sift through contracts to check which facility is preferred? Although the assistance company may have a list of in-network facilities, in Florida, for example, Rose confirmed they “do not recommend any facility” but allow the patient to choose where they go.

If a patient has taken the time to call ahead of treatment, and is advised to go to one of three nearby facilities, are they likely to follow the advice given? We think so.

Of course, once the patient is in a facility, it would be fairly straightforward to research and find a cost containment company representing the hospital. If there is no direct agreement or business relationship between the insurer and the billing department, any discount is likely to be minimal. If you consider the fees, perhaps the assistance company would be better off negotiating their own discount, in return for a faster settlement of the invoice.

Bach had three key recommendations for insurers struggling to contain costs in the US:

• Use data analytics to understand cost patterns and build strategies to address these
• Patient direction
• Engage with a variety of provider networks as well as directly with healthcare providers.

In summary, although there are problems facing insurers when dealing with the US, these can be overcome to some degree. If you adopt a multi dimensional approach to cost containment via an assistance company’s own networks, PPO agreements and some direct efforts to reduce costs directly, the discounts are there.

The challenges faced by international insurance companies negotiating hospital bills in the US are rooted in the intricate nature of the healthcare billing system

“In conclusion,” Rummelhoff told ITIJ, “the challenges faced by international insurance companies negotiating hospital bills in the US are rooted in the intricate nature of the healthcare billing system, characterised by complex codes, charges, and the absence of standardised pricing. Navigating these challenges is where a domestic cost containment company proves invaluable. By making use of local legal and regulatory expertise, international travel and health insurance companies can ensure compliance with state-specific laws, contributing to effective negotiation and overall cost containment efforts.”

Equally as important, though, is a company’s own knowledge. As Solomon concluded: “Teams of case handlers, medical management teams, and management, are all empowered to explore cost containment opportunities and ultimately achieve the best outcome for all.”

Rose, Solomon and Staples all agree that the best outcome is that the patient is treated well overseas. However, equally important are that the administration side is handled swiftly, reducing internal costs, that the hospital is paid quickly, and that the bills are monitored for fair pricing and appropriate procedures and tests, meaning no further stress for the patient and their family.