Payers, employers pitch fixed reimbursement rates for out-of-network providers to curb surprise billing
America's Health Insurance Plans, the BlueCross BlueShield Association and other payer and employer groups sent a letter Monday asking Congress to prohibit doctors from sending a surprise bill for emergency or involuntary care.
The organizations also requested passage of a bill that requires facilities to tell patients about doctors' network status and other options, and suggested out-of-network reimbursement rates should be based on market rates "determined by reasonable, contracted amounts" in the geographic area, or a percentage of Medicare.
The American Hospital Association and Federation of American Hospitals quickly slammed the proposal, which would stop hospitals from being able to recoup any costs from out-of-network care. "Not only is it a dangerous precedent for the government to start setting rates in the private sector, but it could also create unintended consequences for patients by disrupting incentives for health plans to create comprehensive networks," the trade groups' CEOs wrote in a joint statement.
Surprise billing is an ongoing problem that leaves patients on the hook for unexpectedly high healthcare costs. The practice isn't great for providers, either — hospitals have to seek payments directly from patients, resulting in more bad debt and increasingly stressed margins. According to the AHA, hospitals have provided more than $620 billion in uncompensated care since 2000.
Surprise bills are especially a problem in emergency care. A recent analysis from the USC-Brookings Schaeffer Initiative for Health Policy found that about 20% of emergency department visits include an out-of-network provider (even if the facility was in-network), which more often than not results in a surprise bill.
Stakeholders across the board agree that surprise bills are a problem, but often point the finger at all other groups besides themselves when it comes to who's to blame.
In their letter, payers and employers are pushing back on complaints that surprise billing is a problem caused by health insurers. Instead, the groups painted a picture of patients facing higher costs because of provider issues.
"A significant driver of high costs are exorbitant bills that millions of patients with comprehensive insurance coverage receive every year, demanding arbitrary fees for treatment by certain specialty medical doctors they did not seek out for care and, often, never even knew treated them," they wrote.
Usually, private industries don't request more governmental oversight, making the letter a noteworthy chapter in the surprise billing saga, though the groups are requesting regulation of someone else's prices, not their own.
In a statement Monday, AHA CEO Rick Pollack and the FAH CEO Chip Kahn said patients shouldn't bear the brunt of surprise billing and payers need to provide "adequate" provider networks to ensure that. "Beyond protecting patients and ensuring adequate health plan provider networks, it is essential that insurers and providers of care retain the ability to negotiate appropriate payment rates," they said.
Several hospital groups, including the AHA, FAH and America's Essential Hospitals, recently sent their own letter to congressional leaders opposing the government imposing fixed payment amounts for out-of-network care.
Legislation on Capitol Hill from the most recent session includes bans on surprise billing for certain charges, as well as arbitration for payers and providers. A bipartisan group of senators offered the Protecting Patients for Surprise Medical Bills Act, which includes a cap of 125% of the average amount payers in the surrounding geographic area for out-of-network payments.
Senate Health Committee Chairman Sen. Lamar Alexander, R-Tenn., recently said multiple stakeholders need to create solutions to the problem. "The first place to deal with it is for the hospitals and doctors and insurance companies to get together and end the practice," he said. "And if they don't, Congress will do it for them."