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Wrong answer to surprise medical bills

May 15, 2019

Topics: Quote of the Day

By Dylan Scott
Vox, May 14, 2019

Reps. Frank Pallone (D-NJ) and Greg Walden (R-OR), the top Democrat and Republican on the House Energy and Commerce Committee, have jointly released a draft bill that would prevent patients from facing unexpected charges after they go to the emergency room or receive other non-emergency medical care.

The draft legislation, shared exclusively with Vox, is the most robust proposal yet as lawmakers from both parties and President Donald Trump say they want to end surprise billing. The plan would prohibit surprise charges not only for emergency care when a patient ends up at a hospital that is out of their insurance plan’s network, but also for non-emergency care when the facility might be in network but certain providers are not.

The problem here is simple: Sometimes patients go to the emergency room and end up getting unexpected charges because the hospital itself or some of the doctors who treated them do not have contracts with the patient’s health insurer.

The Pallone and Walden bill takes a multi-pronged approach to ending surprise medical bills:

  • Health insurers would be required to treat out-of-network emergency care as in network for their enrollee’s cost-sharing and out-of-pocket obligations. So patients wouldn’t have to pay any more for receiving emergency treatment at an out-of-network hospital than they would at an in-network one.
  • Balance billing — when a health care provider sends a patient a bill charging them whatever the difference is between the price set for a service by the provider and the price the health insurer is willing to pay — would be prohibited.
  • Insurers would have to make a minimum payment to out-of-network providers for their enrollee’s care, based on the price the insurer pays to nearby in-network providers. (Some states have their own laws for setting those payments, however, and they would not be overridden by the federal law.)

It stipulates that patients must receive both written and oral notice about whether their providers will be in or out of network and what charges they must face. If they do not sign a consent form after that notice, they can not be balance-billed. The legislation also prohibits balance billing from providers that a patient could not reasonably be expected to choose themselves, like anesthesiologists, radiologists, and pathologists.

The Senate had already taken up the cause of surprise bills — Sens. Bill Cassidy (R-LA) and Maggie Hassan (D-NH) have been leading a group dedicated to the issue, while health committee chair Lamar Alexandar (R-TN) has also indicated his interest in tackling the issue — and it can only help that President Trump is on board.

Surprise bills are really only a symptom of the underlying disease plaguing American health care — exorbitantly high and irrationally set prices — but they are a particularly egregious example, as they can leave even patients who have insurance with medical bills that total tens of thousands of dollars.



By Don McCanne, M.D.

Why do surprise medical bills exist? Quite simple. The private health insurance industry decided that they could price their insurance products more competitively if they had contracts with the providers – physicians and hospitals – in which the providers would contract for lower payment rates in exchange for being authorized to provide care to captive patients of the insurer. Since circumstances would inevitably arise wherein care is obtained from providers outside of the networks, patients would no longer be protected by the insurers’ provider contracts. No contract, no controlled prices and no coverage for the patients outside of the networks.

So what legislative remedies are proposed? A simplified explanation, which makes the point, is that out-of-network providers who care for the insured patients would be required to accept payments close to the terms of a contract that they were not offered or did not agree to. Why should Congress be able to mandate that providers comply with contracts they did not sign, especially when they are not granted the “most favored status” that in-network providers have with the insurers? Why would insurers want to even try to negotiate tough contracts if they can enforce their terms on out-of-network providers? The insurers would have control over the patients, over the in-network providers, and, with this legislation, over the non-contracted providers as well. It is no wonder that the insurance lobby organization – AHIP – issued a release strongly supportive of this legislation.

What would happen to surprise bills under the PNHP model of single payer Medicare for All? Well, it’s a prepaid health program. Since patients do not receive bills anyway, there would be no surprise bills.

Ask your friends in other countries what they do about surprise medical bills. The likely answer: “Surprise medical bills? What are they?”

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

About the Commentator, Don McCanne

Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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