WASHINGTON — What’s the best way to fix the “surprise billing” problem? It depends on who you ask — and who that person represents, as evidenced by a hearing held by the House Ways & Means Health Subcommittee.
“Any solution must incorporate a mechanism to secure fair payment to providers,” Bobby Mukkamala, MD, a member of the American Medical Association’s (AMA) Board of Trustees, said at the hearing Tuesday afternoon. “[We urge] Congress to avoid a solution that sets minimum payments for out-of-network providers at inadequate rates.”
“We urge you to reject proposals that would use arbitration,” said Jeanette Thornton, senior vice president for product, employer, and commercial policy at America’s Health Insurance Plans (AHIP), a trade group for health insurers. “That would result in excessive payments and increased premiums. It fails to address the root cause of surprise bills: exorbitant bills from specialty doctors.”
James Gelfand, senior vice president for health policy at the ERISA Industry Committee (ERIC) which represents self-insured employers, proposed three solutions: having patients pay in-network rates — which could be supplemented by their insurers — to all providers that they see at an in-network facility; setting a benchmark rate in all cases where plans and providers can’t agree on a payment rate; and requiring that non-emergency patients be informed if they’re going to be served by an out-of-network provider, and offering them an alternative if they want it.
And yet, despite their differences, witnesses all agreed on one thing: leave the patients out of it. “Take patients out of the middle,” said Mukkamala. “When patients don’t have the opportunity to select an in-network provider, they shouldn’t be charged more than the network amount.”
“Balance billing should be banned in situations when patients are involuntarily treated by out-of-network providers,” such as in a medical emergency or a situation where they are at an in-network facility, said Thornton.
“Make sure patients are kept out of any process to determine reimbursement between payer and provider,” said Tom Nickels, executive vice president for government relations and public policy at the American Hospital Association. “Once the patient is protected, encourage Congress to allow providers and payers to determine fair and appropriate reimbursement.”
Subcommittee members also discussed what their own states were doing. In Oregon, for example, out-of-network billing is banned; patients who receive care from out-of-network providers at in-network facilities will only receive bills at in-network rates as the insurance company and the provider work out the remainder of the reimbursement, noted Rep. Earl Blumenauer (D-Ore.) who asked witnesses what they thought of that policy.
“We couldn’t agree more,” said Mukkamala. After it becomes clear the patient isn’t responsible, “at that point … the physician should be on the phone with the insurance company and the [balance] should be negotiated.”
“We agree that taking the patient out of the middle is absolutely the first step,” said Gelfand. However, he added, “I would just caution that eventually someone does have to pay the bill … If you don’t address the underlying issue causing the generation of those bills, the prices will be spread throughout the premiums, and every enrollee will be paying for that surprise bill.”
New York state’s solution — a binding arbitration law — didn’t exactly get rave reviews from the witnesses, although Thornton, of AHIP, wasn’t entirely negative. “When that law came into place, they were really starting with a broken system where the plan was required to pay the full amount, so the arbitration process is better than what they had before,” she said. “The challenge with arbitration is that it’s a clunky and costly process … It’s difficult [with an arbitration system] for [health insurance] plans to plan ahead and get that certainty when setting their rates. We don’t think it would work at the national level.”
Gelfand was a little more critical. “Arbitration raises costs and doesn’t eliminate surprise medical bills,” said Gelfand. Instead, “it rearranges the deck chairs on the Titanic.” When providers win the arbitration cases, he added, “the amount the insurance company must pay is the ‘billed charge,’ which nobody would [normally] ever pay.”
In general, paying out-of-network providers the in-network rate didn’t sit well with Mukkamala. For example, at a rural hospital, “if I’m the only guy who can sew a patient’s ear back on when it gets cut off, should my fees not be different than in a place when there’s 10 people who can sew that ear back on? I have [no room to negotiate that] in such a scenario … Eliminating the ability to sit with insurance companies and negotiate fees is not a fair solution.”
No matter what the states are doing, it won’t solve everyone’s surprise billing problem, said subcommittee chairman Lloyd Doggett (D-Texas). “Few states have comprehensive protections, and even those that do cannot extend protections to consumers with self-insured plans,” he said. “Federal action is essential because so many Americans are covered by ERISA [Employee Retirement Income Security Act] plans, which are subject solely to federal regulation.”
Doggett said that under the End Surprise Billing Act, which he introduced in January, “patients would only be charged in-network cost-sharing rates in emergency situations,” he explained. “In non-emergency situations, out-of-network charges would be permitted only when the patient has agreed in advance after receiving notice regarding any such providers and services, together with estimated charges. The patient could not be charged more than these estimated charges, even if an out-of-network provider or service is unexpectedly added during care.”
Rep. Devin Nunes (R-Calif.), the committee’s ranking member, had another idea. “Perhaps the hospitals responsible for those practicing within their four walls should be held responsible for dealing with doctors and insurance companies in such circumstances,” he said. Those three groups “have the power and, I’d argue, the responsibility to solve the issue for patients.”