Surprise Medical Billing: What is it and what’s being done to stop it?
Surprise medical billing is an issue that has been widespread for a while, but due to social media and more intense scrutiny, we are now seeing the effects of how common this problem is among patients accessing our healthcare system. According to a study by Kaiser “roughly 1 of every 6 emergency room visits and inpatient hospital stays in 2017, patients came home with at least one out-of-network medical bill.” The question is what is surprise medical billing?
Surprise medical bills generally have two components. The first component is the higher amount the patient owes under her health plan, reflecting the difference in cost-sharing levels between in-network and out-of-network services.
The second component of surprise medical bills is an additional amount the physician or other provider may bill the patient directly, a practice known as “balance billing.” Typically, health plans negotiate discounted charges with network providers and require them to accept the negotiated fee as payment-in-full. Network providers are prohibited from billing plan enrollees the difference (or balance) between the allowed charge and the full charge. Out-of-network providers, however, have no such contractual obligation. As a result, patients can be liable for the balance bill in addition to any applicable out-of-network cost sharing.
To illustrate a patient can find his or herself in a situation where the patient needs emergency care but cannot select the emergency room or the ambulance provider in a certain situation. Another instance is where a patient knowingly goes to an in-network hospital to receive surgery but does not know that an anesthesiologist is an out of network provider.
So what’s being done about this?
The Administration:
Last May, the Administration released a fact sheet on medical billing that advocated for the following:
In emergency situations, balance billing for amounts above the in-network allowed amount should be prohibited.
Before scheduling their care, patients should be given information about whether the care providers are out of their network and what related costs that may bring.
Congress:
In Congress there have been bills this session to combat surprise medical billing, but these solutions have differing philosophical approaches. For example one method calls on the use of arbitration, where an insurer and a provider would advance a proposed payment rate for the service provided to the patient and then an independent arbiter would adjudicate a fair price. On the other hand insurers have been advocating for benchmark payment rates as a solution to surprise medical billing where benchmark payment rates would ensure that providers are paid a standard rate for out-of-network services provided.
H.R. 3630: This bill sponsored by Rep. Pallone (D-NJ) expands restrictions on charging health care plan holders out-of-network rates for certain services. First, the bill requires insurers offering plans that cover emergency services to bill plan holders no more than the median in-network rate for a particular emergency service, even if the service provider is out of network. The bill further prohibits insurers from billing plan holders more than the median in-network rate for nonemergency services provided by out-of-network providers at in-network facilities. Out-of-network providers may not bill plan holders for the difference between the in-network and out-of-network rates for emergency services. The bill further prohibits out-of-network providers from billing plan holders for the difference in rates for nonemergency services provided at an in-network facility unless the provider complies with specified notice and consent requirements.
S. 1895: This bill sponsored by Senator Alexander (R-TN) applies in-network cost-sharing requirements to certain emergency and related nonemergency services that are provided out-of-network, and prohibits health care facilities and practitioners from billing above the applicable in-network cost-sharing rate for such services. Additionally, it requires health care facilities and practitioners to give patients a list of provided services upon discharge and to bill for such services within 45 days.
Most recently, two U.S. House Committees have moved forward with additional possible solutions to this issue. The U.S. House Ways and Means Committee released a surprise billing plan, that calls for a dispute resolution process between the insurer and the provider. This bill does not address patients who are billed for air ambulance rides but does require providers to share cost data and insurers to share claims data to the Department of Health and Human Services. If enacted this language would be effective in 2022.
The U.S. House Education and Labor Committee has released its proposal that is similar with what the House Energy and Commerce Committee and the Senate Health, Education, Labor and Pensions Committee (HELP) proposed in December 2019, where insurers would pay out-of-network providers the median in-network rate for that geographic area for amounts up to $750. For larger amounts, either side could request an arbitration process. When a patient receives a surprise bill from an air ambulance provider, the threshold would be $25,000. Both House committees plan to discuss their respective bills this week.
State Legislative Protections:
States have created their own but varied approaches to surprise medical billing. According to an analysis by The Commonwealth Fund, 28 states have enacted laws to protect enrollees against this issue. Last year Colorado, Nevada, Texas and Washington State passed enhanced or new surprise medical billing laws.
Conclusion
In conclusion, this issue will continue to be debated in the states until there is a federal solution. With this being an election year, it is uncertain as to whether this issue will pass Congress. While this issue can be a bi-partisan victory for patients nationwide, it is also questionable as to whether either the Democrats or Republicans are willing to give the other side a share in a political victory during the crucial 2020 election season.