Monday, October 5, 2020

Surprise Billing Reform Could Reduce Billions in Premiums, Study Shows

by Peter Johnson

A study published Sept. 11 in the American Journal of Managed Care found that a federal law to rein in surprise medical billing could reduce overall health insurance premiums by 1% to 5%.

The study, which was prepared by researchers at the USC-Brookings Schaeffer Initiative for Health Policy, is based on 2017 data compiled by the Health Care Cost Institute, which is drawn from claims submitted to UnitedHealthcare, Humana Inc. and CVS Health Corp.'s Aetna.

The cost reduction finding is based on a model that assumes new legislation would reduce procedures that are currently surprise billed either by 15% altogether, or reduce their costs to 150% of traditional Medicare rates. In the former scenario, legislation would save commercially insured members about $12 billion, and in the latter, those members would save roughly $38 billion.

Loren Adler, a fellow at the USC-Brookings Schaeffer Initiative for Health Policy and an author of the study, says surprise bills have an underappreciated impact on overall health plan spending.

"Fundamentally, surprise billing is obviously awful for the people who receive the surprise bills themselves. But this study shows that we’re talking about a pretty substantial effect on premiums," he adds.

"To me, what really matters is, how much money would you save per member per year if you could get the average payment [of surprise bills] down to what the average payment is for in-network physicians? [The study's] number is $212 per member per year," says Joseph Antos, a resident scholar at the American Enterprise Institute.

Antos points out that providers who surprise bill are acting rationally in an unfair set of economic conditions that is enabled by a failure of government.

That gap in the rules has not gone unnoticed by public officials, but Washington, D.C. insiders say that surprise billing legislation isn't likely to advance any time soon. Many were hopeful that surprise billing legislation would pass Congress by now, but progress has stalled.

"It feels very unlikely that anything constructive is going to be done in health care legislatively at this point, just given everything else that is going on and given that we’re so close to the election. I think that we're looking into a window of lame duck or into the next session," says Avalere founder Dan Mendelson.

From Health Plan Weekly

No comments:

Post a Comment