Industry braces as more lawmakers seek to ban surprise billing
Most bills attacking the issue include bans on holding the patient responsible for certain charges and some form of arbitration process for payers and providers.
Stopping unexpected hospital bills from draining a family's finances is moving toward the top of the wish list for state and federal lawmakers — and hospitals, doctors and insurers could be in the hot seat.
President Donald Trump last week called the issue "very important" to him at a meeting with patients and policy advisers. "The healthcare system too often harms people with some unfair surprises," he said.
And the Republican chairman of the Senate health committee told reporters recently he expects pushback from the industry — but warned industry to act before Congress does.
"The first place to deal with it is for the hospitals and doctors and insurance companies to get together and end the practice," Sen. Lamar Alexander, R-Tenn., said. "And if they don't, Congress will do it for them." The senator hasn't, however, put forward any specific legislation or scheduled hearings on the topic yet.
Hospital bills have long been a frequent source of confusion and anger for patients, and few would argue they're easy to understand. More recently, however, the issue grabbing the spotlight is balance billing — when a patient receives an unexpectedly high charge because a doctor who treated them was out of network, sometimes within a facility that was in network.
The sticker shock is capturing public attention, which could make it a talking point for 2020 presidential candidates and other public officials. Unexpected medical bills were the main worry for Americans polled recently by the Kaiser Family Foundation. About four in 10 people said they had received such a surprisingly high bill in the past year and 38% were "very worried" about being able to afford one. Nearly 30% were "somewhat worried" and only 16% were "not at all worried."
That's putting pressure on Congress and statehouses to curtail the practice.
"I think the point of biggest agreement is that pretty much everybody agrees that the consumer shouldn't be trapped in the middle of these conversations — that's the easy part," Jack Hoadley, research professor emeritus at the Georgetown University Health Policy Institute, said.
A handful of states already have legislation of some type in this area, although the specifics vary. Some efforts at the federal level are underway as well.
Capping charges, arbitration
Lawmakers in Congress late last year introduced a few notable bills aimed at ending the practice of surprise billing. A bipartisan group of six senators introduced the Protecting Patients for Surprise Medical Bills Act, to cap charges to 125% of the average amount payers in the surrounding geographic area allow for the particular service in network.
Another bill, from Sen. Maggie Hassan, D-N.H., would use binding arbitration to determine the allowable charges. Her No More Surprise Medical Bills Act of 2018 would limit any patient cost-sharing responsibility to whatever they would pay for the service in network.
In the House, a bill put forward by Rep. Lloyd Doggett, D-Texas, would require hospitals to notify patients if one of the providers treating them may be out of network and wouldn't allow them to charge same-day ER services at above in-network prices.
Democratic control of the House may create an opening, however, especially as tackling the issue has broad public appeal.
Most bills attacking the issue of surprise billing cover similar ground. They include bans on holding the patient responsible for certain charges and some form of arbitration process for payers and providers that can't agree on a reimbursement level.The area where discussions get most heated involves determining the actual payment rates, whether that includes a cap on charges, a formula based on pricing in the area or another mechanism. The difficulty with a formula is that prices vary substantially based on the regional market, the care setting used and other factors.
The fact that question is the most contentious is an argument for strong arbitration mechanisms, which can exist alongside payment formulas, Hoadley said. It pushed both sides to avoid putting forward the best-case scenario for them in fear it would be rejected by an arbiter. "The incentive is to do reasonable bids," he said. "Very often the incentive gets you closer to each other."
Backers cite New York as an example where arbitration can lead to fair negotiation. The state law, which went into effect about four years ago, requires payers and providers to put forward what they think is the most appropriate payment. Each party gets one submission and the independent arbiter chooses which to accept. Early results showed fairly even distribution in which side's bid was chosen, Hoadley said.
Industry raises flags
Vidor Friedman, president of the American College of Emergency Physicians, told reporters this week his organization supports some aspects of the bills being considered, but doesn't back any rate or charge caps, which could "create a problem with future contracts." He added: "We believe using those market forces is a better way to do it at this point and that would avoid the rate setting issue."
Emergency physicians are also wary of requirements that patients be informed once they have been stabilized of any out-of-network providers involved in their treatment. "We have a lot of concerns about that, it seems like an easy thing to do but the reality is it's very difficult to draw a bright line of when stability occurs," Friedman said.
ACEP names several key factors for any surprise billing legislation it would support. It would have to prohibit balance billing, ensuring the patient had no responsibility for an out-of-network bill for emergency care; create a single point of contact for patients with ER bills; require insurers to more clearly explain beneficiary plan details and rights to emergency care; and take the patient out of payer-provider billing disputes by creating an arbitration process.
By law, ER doctors cannot discuss costs of care with a patient seeking emergency care until they have been screened and stabilized. That’s an important protection for patients who need treatment right away, but it can create problems down the road, Friedman said. "It also means that patients may not fully understand the costs involved in their care until they get the bill, sometimes long after their treatment," he said.
Hospital groups agree with provisions prohibiting balance billing that make patients responsible for out-of-network charges. In a letter to Congress late last year, the American Hospital Association and Federation of American Hospitals were vague about what else they might support, but mentioned protecting a broad range of patients, investigating the role of network adequacy requirements and whether policy interventions are needed to determine fair provider payment. "We appreciate that this is a high priority issue for Congress, as it is for us, and we intend to provide more specific feedback to policymakers early in the new Congress," the groups wrote.
Grab bag of state policies
Currently, 25 states have laws attempting to protect residents from surprise billing in at least some form. Hoadley and two colleagues analyzed state-level legislation and determined only nine states are worthy of the label "comprehensive."
Key elements those states include and which Hoadley sees as crucial are having protection for both ER and in-network hospital settings, applying the laws to all types of insurance (including HMOs and PPOs), ensuring consumers are not responsible for extra provider charges and adopting a payment standard to determine how much the insurer pays the provider or a dispute resolution process for disagreements between payers and providers.
States without comprehensive protection are most likely to leave out a payment standard and process for dispute resolution.
States have a bit of a handicap in their ability to regulate, however, as their laws can only apply to fully-insured products and not employers that offer self-insured plans, Hoadley noted.
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