WASHINGTON — Surprise billing is its own separate issue and shouldn’t be characterized as a slippery slope to Medicare for All, Frederick Isasi, JD, MPH, executive director of Families USA, said here Monday.
Some organizations have suggested that because a few of the proposed solutions to the surprise billing problem involve setting standard payment rates, this means it’s going in the direction of single-payer, said Isasi at a briefing sponsored by the Alliance for Health Policy.
However, “this is absolutely not Medicare for All,” he said. “Medicare for All is about the notion that government really takes over healthcare; this is not that. This is literally saying, ‘We want to set up a reasonable rate, to show up and negotiate’ … and the government is not even involved.” The issue is “utterly bipartisan, and it should be,” he added.
Families USA is a consumer group whose mission in part is to defend and strengthen Medicaid and the Affordable Care Act (ACA).
Surprise billing, in which patients undergoing procedures at in-network hospitals receive unexpectedly high bills because one or more of their clinicians was out of network, continues to be a problem even as Congress tries to develop solutions to it.
A total of 27 states currently have their own laws to deal with surprise billing, but none of those laws apply to employees whose companies “self-insure” their health insurance coverage. Self-insured plans, which include about 60% of workers who have employer-sponsored health coverage, are exempt from all state laws regarding health insurance and can only be regulated through federal law, explained Jack Hoadley, PhD, research professor emeritus here at Georgetown University’s Health Policy Institute.
Surprise bills mainly occur in three different specialties — emergency medicine, anesthesiology, and radiology, Isasi explained. In particular, of the total out-of-network claims made in association with in-network hospital admissions in 2016, 16% were for anesthesiology, 11% were for emergency care, and 8% were for radiology services, according to a study by the Health Care Cost Institute, he said, noting that many of these bills were for “auto-referrals” — that is, the patient wasn’t in a position to choose an in-network provider in advance.
The extent of the problem varies state by state and also by health plan, according to Hoadley. In Texas in 2017, for example, 63% of Humana’s in-network hospitals did not have a single in-network emergency physician on-staff — which virtually guarantees an out-of-network emergency department (ED) bill — versus 40% of UnitedHealthcare in-network hospitals and 18% of Blue Cross in-network hospitals, according to a study by the Center on Public Policy Priorities. For anesthesiology, 42% of Humana in-network hospitals had no in-network anesthesiologist, compared with 14% of United’s in-network hospitals and 4% of Blue Cross’s.
It’s hard to determine how many of these surprise bills are currently being settled at lower rates, Hoadley told MedPage Today during a question-and-answer session. “Whether something gets sent to a collection agency, whether there’s an agreement between the provider and the patient on how much they’re going to collect of a balance bill … is not something that generally shows up in the insurance claims.”
“In the old days … almost all these cases got settled,” he added. “The local insurers knew the local hospitals, knew the local doctors; the guys — and it was all guys then — settled it on the golf course or over a drink in the bar: ‘Well, let’s just take care of it. We’ll split the difference,'” he said. “That was nice when that worked; that doesn’t work today.”
There are also cases where, for example, a patient from out-of-state will go to a hospital ED and end up being admitted, said Al Bingham, senior consulting actuary at the Wakely Consulting Group. “A lot of issuers, as soon as they hear about that, will begin calling up the hospital and starting to negotiate a payment. Ultimately there are payments made, but that doesn’t necessarily mean you won’t have a situation where the enrollee gets additional billing.”
There are a number of potential solutions to this problem, Hoadley said:
- Setting a payment standard, such as a percentage of Medicare, that would be paid to out-of-network providers; the payment could also be based on what insurers would normally pay an in-network provider, as is currently the mechanism being used in a bill under consideration by the House (A bill recently passed out of the Senate Health, Education, Labor, & Pensions Committee also uses a benchmark rate).
- Using a “charge-based” system in which the payment is set based on list prices — however, that could be more inflationary, Hoadley said.
- Using an arbitration system. “This can be popular because it allows both sides to have their say, but it’s more administratively complex and costlier” — on average, it adds $600-$1,000 to the cost of the claim, he said. On the plus side, “states that have used this do find that it encourages more informal negotiations,” he said.
- Employing a combination of methods. As a political compromise, “there is the potential to combine these methods — set a rate standard but allow people to go to arbitration in certain cases,” he said. “States that have done this have suggested the providers try an informal negotiation first.”
- Developing a bundled payment system. Under this plan, hospitals would bundle all their charges together into a single bill for the insurer, and then the hospital would be in charge of paying their providers. “This would be more disruptive so it hasn’t gained much traction,” said Hoadley.
Isasi emphasized that the number one principle of solving the surprise billing problem should be holding consumers harmless so they don’t end up having to pay this large bill. As to which solution would be best, “we are supportive of all … approaches but we think the average in-network rate is the right answer,” he said. However, he added, “the fact that Congress can’t agree shouldn’t stop Congress from acting.”