As the industry grapples with solutions for high patient financial responsibility and healthcare costs, it has become laser-focused on one key, unifying issue: surprise medical billing.
A surprise medical bill is a charge that a patient did not expect to receive or did not expect to be so high. Although these bills can arise anywhere on the healthcare spectrum, they are most common in emergency situations where a patient may not be able to make her own healthcare decisions, landing her in a facility or with a doctor who is not a part of the patient’s insurance network.
Data from a 2018 Kaiser Family Foundation survey revealed that 40 percent of patients had received a surprise medical bill in the previous 12 months, and another 67 percent said receiving a surprise medical bill is their chief concern with their healthcare finances.
Separate data from the Health Care Cost Institute (HCCI) showed that surprise medical bills are a problem even for patients receiving care at an in-network facility. One in seven patients received an out-of-network surprise bill, even when receiving care at what they believed was an in-network facility during 2016, the most recent year for which HCCI had data.
Those bills likely occurred because the patient received care from a provide who was not in her network or received a treatment that was not covered by her insurance.
READ MORE: Benchmark Payments Ineffective Solution for Surprise Medical Bills
As patients become increasingly concerned about their ability to afford a surprise medical bill, healthcare industry leaders and policymakers have stepped up to the plate. Hospitals and payers alike agree that patients must be protected from these bills and kept out of the often messy payment arbitration process.
These stakeholders have the backing of lawmakers, who believe better healthcare transparency and clear cost arbitration rules could keep these surprise bills at bay. In fact, lawmakers have proposed a total of 6 bills addressing surprise medical bills just during this 2019 to 2020 session of Congress, per a search on Congress.gov.
Below, PatientEngagementHIT.com breaks down the key elements of those bills, industry sentiment toward the legislation, and stakeholder predictions about bill passage.
What are the different bills at play?
Perhaps the most notable piece of legislation addressing surprise medical bills is the Lower Health Care Costs Act of 2019. Co-sponsored by Senate Health, Education, Labor, and Pensions (HELP) Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA), the bill initially set out to address surprise medical billing by obtaining industry feedback for arbitration methods.
Other notable legislation came out during September of 2018 and led the way for legal remedies to surprise billing.
The bill, co-sponsored by Bill Cassidy, MD (R-LA), Michael Bennet (D-CO), Chuck Grassley (R-IA), Tom Carper (D-DE), Todd Young (R-IN), and Claire McCaskill (D-MO), aims to put restrictions on surprise medical bills for out-of-network physicians.
In addition to those two bills, key legislation addressing surprise medical billing include:
- HR 861, End Surprise Billing Act of 2019
- S 1531, Stopping the Outrageous Practice of Surprise Medical Bills Act of 2019
- S 1266, Protecting Patients from Surprise Medical Bills Act
- HR 3502, Protecting People From Surprise Medical Bills Act (companion bill to S 1266)
- HR 3630, No Surprises Act
Legislators have also included provisions to address surprise medical billing in several, broader healthcare bills, such as the legislation introducing Medicare for America.
Each of these bills have a lot in common. Lawmakers agree that patients must be protected during the settlement process for a surprise medical bill and that they should only be liable for what their copayment would be at an in-network facility or with an in-network provider. They also agree that any legislation should apply to any healthcare facility or payer type, thus protecting all patients.
Additionally, many pieces of legislation call for more healthcare transparency, requiring providers to disclose to patients when they or a service is outside of a patient’s insurance network, giving the patient the option to choose another clinician. These provisions would be most effective when a patient is receiving follow-up care to an ED admission and the patient is capable of making healthcare decisions.
The crux of the debate lay in how these bills will be settled between the payer and provider. Most bills fall on one of two sides of the argument:
- “Baseball-style” arbitration: These bills utilize a so-called “baseball-style” arbitration process during which both the payer and provider name what they believe is a fair price to be paid for a rendered service. A third-party arbitrator would then determine which of those two prices – or somewhere in the middle – the insurance company should pay. Ideally, this will discourage either party from low- or high-balling for the price of the service because the arbitrator would be selecting a reasonable price.
- Benchmark payments: This would establish a standardized charge for a certain procedure based upon a facility’s geography. Specifically, lawmakers would establish a benchmarked price based on the average in-network charge for a certain service in that geographic area. Alternatively, some lawmakers have proposed charging a certain percentage – most commonly 125 percent – of the Medicare rate for a certain service.
Some legislators have also called for a bundled payment method for emergency services, although that proposal was largely shot down and has since not gained much traction.
Instead, lawmakers debate the arbitration and benchmark settlement strategies.
Those favoring an arbitration process says it will protect healthcare providers who need reasonable and fair payments to keep their clinic and hospital doors open, thus protecting patient access to care.
Others say that setting a benchmark payment protects the free market and addresses the true root issue at hand: the extraordinary cost of healthcare services. Allowing for an arbitration process would allow hospitals and providers to charge large sums for healthcare services, some lawmakers say.
What does the industry say about these bills?
Leading industry organizations have likewise come out on either side of the settlement process. Generally speaking, payer organizations and coalitions have come to support benchmark payments while hospitals support arbitration.
Arbitration addresses narrow networks, an issue that many hospital groups say has led to the surprise medical billing issue. Because payer organizations do not offer an adequately broad network for patients, patients find themselves in emergency departments that do not accept their insurance.
“Health insurance plans are increasingly relying on narrow and often inadequate networks of contracted physicians, hospitals, pharmacies, and other providers as one mechanism for controlling costs,” said a coalition of hospital groups led by the American Hospital Association.
These hospital groups spoke out after the Lower Health Care Costs Act adopted the benchmark-setting approach and sent the bill to the Senate floor.
“This policy, if enacted, gives large insurance companies the ability to set payment rates and eliminates the economic incentive for an insurer to negotiate a contract with a provider,” the AMA-led group explained. “As a result, insurers will unilaterally determine the value of physician services and subsume the physician component of hospital care within its own financial, and, potentially, operational control.”
Hospital groups have also stated that charging a percentage of the Medicare rate would be financially problematic.
But industry proponents of benchmark-setting say the strategy will be essential for tamping down high healthcare costs. Surprise medical bills arise when the cost of a service is exceptionally high, and benchmark setting addresses that.
“Overall, we are very concerned about any out-of-network payment mechanism that would serve to further inflate costs, which would then be passed onto consumers in the form of higher insurance premiums,” said Frederick Isasi, the executive director at Families USA and one of the witnesses during a HELP committee hearing about the Lower Health Care Costs Act.
“Due to its ability to hold down costs, and therefore protect consumers from premium inflation, and its administrative simplicity, Families USA supports your third option – a benchmark payment rate based on median in-network contracted rates.”
What the industry does agree on is that patients must be protected from surprise medical bills and should not be burdened with the bill settlement process.
What is the expected trajectory to address surprise billing?
Right now, it is hard to predict how any of the bills addressing surprise medical billing will pan out.
The Lower Health Care Costs Act has been sent to the Senate floor for debate and has receive a score from the Congressional Budget Office (CBO) revealing that it would indeed lower the price of healthcare. Specifically, the CBO says that the bill would effectively protect patients from surprise medical bills but decrease payments to providers working in facilities in which surprise medical bills often occur.
Other bills have gone through extensive mark-ups and hearings. As of publication, none have passed.
Although the healthcare industry is in staunch agreement that surprise bills are a key issue that must be eradicated, as noted above very few leaders can agree on how to address the arbitration piece. And because of that considerable level of debate, lawmakers are stalled.
Some bills are moving through Congress faster than others. The Lower Health Care Costs Act of 2019 has gained considerable industry attention, with some commentators stating that it will be Senator Alexander’s swan song as he heads into retirement at the end of his term.
The Protecting People from Surprise Medical Bills Act, introduced by a group of senators pushing back against Alexander and Murray’s bill, has also gained momentum for doing just that – offering an alternative for the rate-setting protocol in the Lower Health Care Costs Act.
These competing bills represent the two sides of the surprise medical bill argument and the stalemate that is keeping legislation from moving forward. As Congress continues to debate these bills and take note of industry leader input, it will be essential for stakeholders to keep watch.
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Photo courtesy of: Patient Engagement HIT
Originally Published On: Patient Engagement HIT
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