A House
hearing outlined key facets of a potential bill to address surprise medical
billing.
By Sara Heath
April 04, 2019 - Healthcare
policymakers must put patients first in any legislation addressing surprise
medical billing, industry leaders agreed during a House Health, Education,
Labor, and Pensions (HELP) Committee hearing.
The hearing, held on
April 2, addressed the issue of surprise medical bills. Surprise medical bills are charges a
patient was not expecting to receive or did not expect to be so high.
Patients usually
incur these types of bills in the emergency department (ED), where they are
more likely to encounter a physician who is a not a part of their insurance
network. Patients in emergency situations are also more likely to be brought to
an out-of-network facility.
“The victims of
surprise medical billing often have no control over whether their medical
provider is in- or out-of-network,” said Frederica Wilson (D-FL), the committee
chairwoman, in her opening remarks. “This issue requires bold action to protect
patients from the financial pain of surprise medical bills.”
The hearing, which
included witness testimony from healthcare policy experts, set out to
understand key aspects of potential legislation protecting patients from
surprise medical billing.
Some states currently
have laws instituting some patient protections from surprise medical billing.
New York, New Hampshire, Connecticut, New Jersey, Maryland, Illinois, Oregon,
California, and Florida have each passed laws that protect at least some patients
from burdensome surprise medical charges.
But only Congress can
protect all patients from these types of bills, Wilson said. Most patients do
not live in states that have passed this type of legislation. And in states
that have passed surprise medical bill laws, they are unable to protect
patients in self-regulating commercial insurance markets.
Passing federal
legislation to protect patients from surprise medical bills will require
policymakers to address some of the innate, structural issues in the healthcare
system, according to Christen Linke Young, JD, one of the hearing’s witnesses.
For example, the
industry must rework incentives for providers joining insurance networks.
“For most types of
physicians in most geographic areas, joining insurance company networks is
standard because many patients are not willing to bear higher out-of-network
costs,” explained Young, who is a fellow at the USC-Brookings Schaeffer
Initiative on Health Policy.
“But for types of
physicians that patients do not choose, this logic does not apply. Emergency
physicians, anesthesiologists, and other ancillary physicians receive a flow of
patients based on individuals receiving care at the hospital in which they
practice, and that volume will be largely the same regardless of whether they
join an insurance company network.”
These industry
structures give ancillary physicians the freedom to dictate their own charge
rates. Data shows that these types of physicians typically have higher charges than others, Young
pointed out. And when an ancillary physician does join an insurance network, he
still typically charges more than other physicians.
“One way to
understand these very high in-network rates is that these physician types
exploit the fact that they could remain out-of-network to demand very high
payment rates when they do go in-network – payment rates more than double what
their peer physicians who cannot realistically plan to stay out-of-network
receive,” Young said.
And consumers feel
the pinch. When insurance companies foot the bill for high out-of-pocket
charges, they must compensate by raising premiums.
The first step to
remedying this is changing the amount these physicians are paid when they
deliver out-of-network care. Healthcare policymakers can establish the
out-of-network price for a procedure, prohibit balance billing, and require
insurers to treat this price as in-network.
The second step is
changing the way these providers are paid. Specifically, providers should be
paid by the hospital, not by the patient or the insurer directly. This would
give the hospital negotiating power with the insurer.
Other recommendations
touched on capping the amount that out-of-network providers are able to charge.
Ilyse Schuman, the senior vice president of health policy at the American
Benefits Council, testified that creating certain reimbursement will guarantee
certain charges for patients and providers.
This can include requiring
providers at an in-network facility to accept in-network prices and setting ED
service charges at 125 percent of the Medicare rate. Ambulances and air
ambulances must also be considered emergency services impacted by these price
guarantees, Schuman said.
Medical facilities
and providers must also be responsible for adhering to strict healthcare
transparency policies, Schuman said. Other witnesses, including Frederick
Isasi, JD, MPH, the executive director of Families USA, stated that healthcare
transparency was a positive step forward but more action was necessary.
While it may be
helpful for a provider to disclose when she is not in a patient’s insurance
network, patients often do not have another provider option. Jack Hoadley, PhD,
a healthcare policy researcher agreed. Hoadley has studied individual state
laws protecting patients from surprise medical bills and found that promoting
healthcare transparency is but one small part of the solution.
Many laws are
contingent on whether the hospital disclosed that a provider was
out-of-network. However, legislation must offer more patient protections, as
many patients receiving healthcare do not have an in-network provider option.
“Protections, at
least in nonemergency situations, only apply if the required disclosure does
not occur,” Hoadley said during the hearing. “Disclosure can be helpful to
consumers but making protection contingent on this disclosure seems inadequate
given the challenges that consumers face in understanding the many disclosures
handed to them when receiving medical services.”
Effective patient
protection laws ensure all patients benefit from the legislation, Hoadley
reported. Isasi, Schuman, and Young echoed that sentiment, saying that whatever
legislation Congress proposes should apply to all patients receiving any
procedure in any facility.
Finally, creating a
mechanism by which policymakers can enforce these laws will be essential.
“Enforcement remains
a challenge,” Hoadley concluded. “A critical consideration is to avoid placing
the onus on the consumer to protest a surprise bill.”
Congress has already
begun some work crafting legislation protecting patients from surprise medical
bills. A September 2018 proposal sought to address the issue
by protecting patients from extraordinary charges and making reimbursement
requirements.
The bill would
require better transparency when patients receive care from an out-of-network
provider in an in-network facility. Should the patient receive treatment from
this clinician, the patient may only be charged their health payer co-payment.
The clinician may not
charge the patient directly; instead, clinicians must negotiate with healthcare
payers, who may either pay the clinician the median charge for in-network care
for that service or 125 percent of the average price in that geographic region.
The legislation calls
for similar protocol when a patient receives emergency treatment in an
out-of-network facility by an out-of-network provider.
The draft legislation
also offers protections for patients receiving non-emergency care following
emergency treatment at an out-of-network provider.
This legislation has
not yet been passed, however, as members of Congress aim to improve the bill to
fully protect patients. As legislators continue their work on surprise medical
billing, they are collecting data from providers and insurers, as well.
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