What's an ER visit cost? Virginia disputes show it's an open question.

A battle between the state's biggest health insurer and two emergency room doctors in Southwest Virginia over the $5,560 difference between what the doctors billed and what Anthem Blue Cross Blue Shield offered has raged for more than a year and offers a rare glimpse in the secretive world of medical billing.

The dispute brought in five attorneys and some 375 pages of legal briefs filed at the State Corporation Commission, not counting routine procedural motions, as well as a one-hour hearing and reviews by SCC Bureau of Insurance staff.

Digging through the filings, and checking on his own, the SCC's Chief Hearing Examiner, Alexander Skirpan found there were nine different ways of saying what the same ER services ought to cost.

"It's really devastating what many Virginians are facing with skyrocketing health care costs," said Del. Dan Helmer, D-Fairfax. He added that a main reason he pushed a bill saying hospitals must post standard charges for items and services on their websites was because Virginians were not getting an accurate read on their medical care costs.

"I believe that full and complete pricing transparency is a key and necessary step in the right direction ... the same exact service, done by the same medical provider, simply at a different facility, can be three times the cost," he said.

"There are obvious equity issues raised in all of these concerns," he said.

Skirpan's review upheld an arbitrator's decision that found for the doctors, even though the same arbitrator had previously looked at much the same kind of evidence to find for the insurer - and although Anthem pays the full amount of some of those bills for some kinds of coverage.

The dispute grows out of the state's three-year-old law barring "balance billing" – the practice where doctors, hospitals and other health care providers who are not in an insurer's network bill patients for the difference between what insurers pay them and what they want to charge, a difference that had sometimes amounted to tens of thousands of dollars. It had been an especially big issue for emergency room visits, anesthesiology, plastic surgery and lab tests.

Virginia's ban was a compromise reached after years of wrangling between some of the most influential lobbyists in the state – doctors and hospitals on one side, insurers on the other. Insurers would pay out-of-network providers "a commercially reasonable amount, based on payments for the same or similar services provided in a similar geographic area."

What that means isn't always obvious, as case records at the SCC show.

So, for one patient whose visit to the Lewis Gale Alleghany hospital in Low Moor involved what the American Medical Association's Current Procedural Terminology calls "medical decision making of moderate complexity," as well as taking "an expanded problem-focused history" and an examination of the same scope, the ER doctor's practice billed $747.

Anthem argued that a state database that tracks payments to out-of-network providers held that $96 was the usual payment. On that basis, it offered to pay $95.66, which is what it paid in-network providers.

The doctor's practice, a separate entity from the hospital that is formally affiliated with it but not on its staff, said that amounted to an arbitrary and inaccurate discount and asked for arbitration, as the state balance billing law allows. In doing so, it cut its proposed reimbursement to $222.

That same day, another patient came to the Low Moor ER, whose visit involved a comprehensive history, comprehensive exam and what the AMA terminology called "medical decision-making of high complexity."

The doctor's group billed $2,089 for this visit. Anthem said the state database suggested the average charge was $259, and on that basis said a commercially reasonable payment was $238. Taking this case to the arbitrator, the group cut its proposed claim to $425.

Two days later another patient visited the LewisGale Hospital Montgomery ER in Blacksburg. The visit involved taking a detailed history, a detailed examination and what the American Medical Association's Current Procedural Terminology calls "medical decision making of moderate complexity." Anthem said a state database showed the reasonable commercial amount was $161.

The ER doctor's group billed Anthem $1,416. Anthem said the state database suggested the average for the service was $161. It used that as the basis for what it said was a reasonable reimbursement of $180.43. When the dispute went to arbitrators, the ER doctor's group came back with a counter of $696.

The same doctor treated another patient the same day, on a visit that involved a comprehensive history, comprehensive exam and highly complex decision making. His group billed $2,089 for this visit. Anthem said the commercially reasonable rate according to a state database was $259 and used that to propose what it said was a reasonable commercial rate of $266.30. When this went to arbitration, the group offered to cut its charge to $1,013.

Both groups argued for their charges on the basis of data collected by a nonprofit that collects private health care claims data from across the nation, with a database of 33 billion claims.

The arbitrator found for the doctors' groups in all these cases.

Anthem complained to the SCC that the arbitrator in both cases relied on the state database that the insurer based its proposed payments on until May of 2022. But after that point it appeared to discount that data and turned to the national figures the doctors' groups argued were the more appropriate measure and on which they based their initial bills.

The Blacksburg group said Anthem had paid its full charge of $1,416 for the case involving "medical decision making of moderate complexity," and $1,753 for its $2,089 charge in the more complex case.

The Low Moor group said it had been paid in full for a case involving a problem-focused exam and its more complex case, also 11 months before.

Anthem countered that the arbitrator had previously found its $238 offer for a complex case at Low Moor - this one involving a different member of the same doctors' group - to be more reasonable and that the arbitrator's higher award "cannot suddenly be 'more fair and reasonable' … when the opposite was true just a few months before."

SCC Chief Hearing Examiner Skirpan's research meanwhile found still more variation in billing and claims paid.

When the Low Moore providers, for instance, looked at the same state database Anthem used, they found a still-lower number. The U.S. Centers for Medicare and Medicaid Services quoted still lower numbers, while the figures Anthem offered were what it paid in-network providers. But what it paid for claims under the large employers' self-insured plans that Anthem administered matched the Low Moor group's initial billing.

Skirpan found much the same with the Blacksburg group's examination of the state database, as well as with the CMMS data. For this group, Anthem's proposed payment was the same as its in-network rate. But payments through the self-insured plans matched the "moderate complexity case," though in this case it was $335 lower than the $2,089 the Blacksburg group initially billed – and $1,487 higher than what Anthem offered to pay and what it paid to in-network providers through the plans it itself insured.

For arbitrations decided in the 12 months ending May 31, 2022, the latest period for which data are available, arbitrators ruled in favor of insurers in 303 cases of disputes over payments for emergency care and in 130 in favor of ER doctors.

The Low Moor and Blacksburg groups between them accounted for 20% of arbitrations. ER doctors' groups associated will all Lewis Gale hospitals accounted for 55% of arbitrations.