Owen Loney's surprise bill resulted from an emergency appendectomy in 2019 at a Richmond, Virginia, hospital.
Insurance covered most of the cost of the hospital stay, he said. He didn't pay much attention to a bill he received from Commonwealth Anesthesia Associates and expected his insurance to cover it. A few months ago, he got a notice that Commonwealth was suing him in Richmond General District Court for $1,870 for putting him under during the surgery, court records show.
"Wow, seriously?" the 30-year-old information technology manager recalled thinking after getting the court summons. Loney didn't have that kind of money at hand. His plan was to try to negotiate down the amount or "take out another credit card to pay for it."
Loney's is a classic, notorious type of surprise bill that Congress and activists have worked for years to eliminate: an out-of-network charge not covered by insurance even though the patient had an emergency procedure or sought care at an in-network hospital thinking insurance would cover most charges.
Commonwealth said it was in-network for Loney's insurer, UnitedHealthcare. But the insurer rejected the anesthesiology charge because it said his primary care doctor was out of network, claims records show.
The federal No Surprises Act, passed at the end of 2020, has been hailed by consumer advocates for prohibiting such practices. Starting Jan. 1, medical companies in most cases cannot bill patients more than in-network amounts for any emergency treatment or out-of-network care delivered at an in-network hospital.
But as much as the legislation is designed to protect millions of patients from unexpected financial consequences, it will hardly spare all consumers from medical billing surprises.
"It's great that there will be surprise billing protections … but you're still going to see lawsuits," said Zack Cooper, an economist and associate professor at the Yale School of Public Health. "This is by no means going to get rid of all of the problems with billing."
The law will kick in too late for Loney and many others saddled with surprise out-of-network bills in states that don't already ban the practice.
"It doesn't prohibit surprise bills that are happening now in states that don't have protections" against them, said Erin Fuse Brown, a law professor at Georgia State University who studies hospital billing. "And it doesn't prohibit collection activity for surprise bills that arose prior to January."
Virginia's surprise-bill protection law took effect only this year and doesn't apply to self-insured employer health plans, which cover a large portion of residents.
The federal legislation also does nothing to reduce another kind of unpleasant, often surprising bill — large, out-of-pocket payments for in-network medical care that many Americans can't afford and might not have realized they were incurring.
Two substantial changes in recent years shifted more risk to patients. Employers and other payers narrowed their provider networks to exclude certain high-cost hospitals and doctors, making them out of network for more patients. They also drastically increased deductibles — the amount patients must pay each year before insurance starts contributing.
The No Surprises Act addresses the first change. It does nothing to address the second.
For a snapshot of the past and future of surprise and disputed medical bills, KHN examined Commonwealth's lawsuits against patients in central Virginia and attended court hearings where patients contested their bills.
"The whole thing with insurance not covering my bills is a headache," said Melissa Perez-Obregon, a Richmond-area dance teacher whom Commonwealth sued for $1,287 over services she received during the 2019 birth of her daughter, according to court records. Her insurance paid most but not all of a $5,950 anesthesia charge, billing records show.
"I'm a teacher," she said, standing in the lobby at Chesterfield County General District Court. "I don't have this kind of extra money."
Commonwealth is one of the more active creditors seeking judgments in the Richmond area, court records show. From 2019 through 2021, it filed nearly 1,500 cases against patients claiming money owed for treatment, according to the KHN analysis of court filings.
In numerous cases, it initiated garnishment proceedings, in which creditors seize a portion of patients' wages.
Describing itself as "the largest private anesthesiology practice in Central Virginia," Commonwealth said it employs more than 100 clinicians who care for roughly 55,000 patients a year in hospitals and surgery centers, mostly in the Richmond area.
Commonwealth said more than 99% of the patients it treats are members of insurance plans it accepts. It garnishes wages only as a "last resort" and only if the patient has the ability to pay, Michael Williams, Commonwealth's practice administrator, said in a written statement.
"Over the past three years we have filed suit to collect from just over 1% of our patients," mostly for money owed for in-network deductibles or coinsurance, Williams said. Nearly half the bills are settled before the court date, he said.
Gwendolyn Peters, 67, said she was shocked to receive a court summons this summer. Commonwealth was suing her for $1,000 for anesthesia during a lumpectomy for breast cancer in 2019, according to court records.
"This is the first time I have ever been in this situation," she said, sitting in the Chesterfield court with half a dozen other Commonwealth defendants.
Because patients typically have little or no control over who puts them under, Brown said, anesthesiologists face less risk to their businesses and reputations than other medical specialists do in using aggressive collections tactics.
The specialty is often "one of the worst offenders because they don't depend on their reputation to get patients," she said. "They're not going to lose business because they engage in these really aggressive practices that ruin their patients' finances."
The average annual deductible for single-person coverage from job-based insurance has soared from $303 to $1,434 in the past 15 years, according to KFF. Deductibles for family coverage in many cases exceed $4,000 a year. Coinsurance — the patient’s responsibility after the deductible is met — can add thousands of additional dollars in expenses.
That means millions of patients are essentially uninsured for care that might cost them a substantial portion of their income. Surveys have repeatedly found that many consumers say they would have trouble paying an unexpected bill of even a few hundred dollars.
Loney's insurer, UnitedHealthcare, agreed to pay the bill from Commonwealth for his emergency appendectomy after being contacted by KHN and saying it "updated" information on the claim. Otherwise, Loney said, he couldn't have paid it without borrowing money.
In Richmond-area courthouses, hearings for Commonwealth lawsuits take place every few months. A lawyer for the anesthesiology practice attends, sometimes making payment arrangements with patients. Many defendants don't show up, which often means they lose the case and might be subject to garnishment.
Commonwealth sued retiree Ronda Grimes, 66, for $1,442 for anesthesia claims her insurance didn't cover after a 2019 surgery, billing and legal records filed in Richmond General District Court show.
"That's a lot of money, especially when you have health insurance," she said.
New research by Cooper and colleagues examining court cases in Wisconsin shows that medical lawsuits are disproportionately filed against people of color and people living in low-income communities.
"Physicians are entitled to get paid like everyone else for their services," Cooper said. But unaffordable, out-of-pocket medical costs are "a systemic issue. And this systemic issue generally falls on the backs of the most vulnerable in our population."
For uninsured patients, Commonwealth matches any financial assistance given by the hospital and will be "enhancing" its financial assistance program in 2022, Williams said.
Two of the nine people being sued by Commonwealth and interviewed by KHN at courthouse hearings were Hispanic. Four were Black.
One was Darnetta Jefferson, 61, who underwent a double mastectomy in early 2020 and came to court wearing a cancer-survivor shirt. Commonwealth sued her for $836 it said she owed in coinsurance for anesthesia she was given during the surgery. Commonwealth's lawyer agreed to drop the lawsuit if she agreed to pay $25 a month toward the balance until it's paid, she said.
"If I ever have some extra money to pay it off someday, I will," said Jefferson, who worked at Ukrop's supermarket for many years before her cancer forced her to go on disability. "But right now, my circumstances are not looking good.”
Although she is living on a reduced income, her rent just went up again, said Jefferson, who also survived lung cancer diagnosed in 2009. Rent now runs close to $1,000 a month.
Paying Commonwealth's bill in monthly $25 increments, she said, means "it's going to be a long way to go."
This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.