Let’s eliminate the actual cause of surprise medical bills
December 21, 2020
Topics: Quote of the Day
By Sarah Kliff and Margot Sanger-Katz
The New York Times, December 20, 2020
After years of being stymied by well-funded interests, Congress has agreed to ban one of the most costly and exasperating practices in medicine: surprise medical bills.
Surprise bills happen when an out-of-network provider is unexpectedly involved in a patient’s care. Patients go to a hospital that accepts their insurance, for example, but get treated there by an emergency room physician who doesn’t. Such doctors often bill those patients for large fees, far higher than what health plans typically pay.
Language included in the $900 billion spending deal reached Sunday night and headed for final passage on Monday will make those bills illegal. Instead of charging patients, health providers will now have to work with insurers to settle on a fair price. The new changes will take effect in 2022, and will apply to doctors, hospitals and air ambulances, though not ground ambulances.
Some private-equity firms have turned this kind of billing into a robust business model, buying emergency room doctor groups and moving the providers out of network so they could bill larger fees.
Unpacking The No Surprises Act: An Opportunity To Protect Millions
By Jack Hoadley, Katie Keith, Kevin Lucia
Health Affairs Blog, December 18, 2020
The No Surprises Act includes several changes from prior compromise bills. These changes largely center on the mechanism to determine how much out-of-network providers will be paid by insurers. Unlike many prior bills, the No Surprise Act would not establish a benchmark payment standard for insurers to pay out-of-network providers. Instead, insurers and providers would try to resolve payment disputes on their own. If that failed, these stakeholders could turn to arbitration. This change (arbitration with no benchmark payment standard) is more favorable to health care providers like hospitals and physicians than prior bills. But the bill also includes several important guardrails to help ensure that the arbitration process—which critics have argued can be inflationary—is not abused.
House Speaker Nancy Pelosi (D-CA) has voiced her support, as has Senate Minority Leader Chuck Schumer (D-NY). The White House has confirmed that President Trump would sign the bill.
The bill adopts “baseball-style” arbitration rules: each party would offer a payment amount, and the arbitrator would select one amount or the other with no ability to split the difference. The decision would then be binding on the parties, although the parties could continue to negotiate or settle.
The losing party would be responsible for paying the administrative costs of arbitration.
https://www.healthaffairs.org…
Proposed “No Surprises Act” favors commercial health plans
AMA, December 18, 2020
The most recently circulated “No Surprises Act” before Congress is an improvement over previous iterations of the bill that seeks a legislative remedy to the issue of surprise billing, but—in its current form—the measure still puts financially stressed physician practices at a disadvantage while favoring commercial health plans.
Comment:
By Don McCanne, M.D.
When looking for solutions to a problem it would be wise to first look at the cause of the problem.
Surprise medical bills are bills that patients receive, sometimes quite large, that should normally have been paid by their insurers but were denied because the provider of services was not in the insurer’s provider network. When a person has obtained insurance in good faith, most agree that it is very unfair to deny payment for legitimate medical services.
So what’s the reason for this problem? Rather than having government administered pricing for health care insured by the private sector, our legislators and regulators have decided to turn the problem of high health care prices over to the private insurers who then use markets to control prices. (Government programs such as Medicare and Medicaid are a different matter.)
The private insurance innovation that gave the insurers tremendous control over prices was to establish provider networks in which the approved providers signed contracts with the insurers, controlling their payment rates. Under threat of being excluded from coverage, providers agreed to reduced payment rates. This actually benefited patients since it slowed down escalation of insurance premiums which were becoming unaffordable. The trade-off for the patient was that they no longer had free choice of their physicians and hospitals, but patients were willing to make that compromise in exchange for supposedly putting a lid on health care spending. What went wrong is that it turned out that there are many circumstances wherein the patient inadvertently received services from providers who were not in the insurers’ networks. Since those providers did not have a contract with the insurers, bills were generated at the full, non-discounted prices, and the patients were responsible for them whenever the insurance policy excluded out-of-network coverage.
The patients do have some blame since they purchased plans with provider network restrictions. The providers may have some blame if they had had the opportunity to contract but declined to do so to avoid restrictions on their fees.
But what about the private insurers? They take away provider choice from the patients, and they take away the payment source from the providers whom they often excluded from contracts by granting exclusivity and a higher volume of patients to those who agreed to accept lower payments. This arrangement provides a disservice to patients and to a portion of the health care provider community. So who benefits? The private insurers! As they tend to dominate the local market, they can run roughshod over everyone else, while blaming the providers with whom they did not contract for causing surprise bills that their own mercenary scheme created.
Compare this to a nation that has government administered pricing for all health care through a single payment source – a social insurance program. The government will not pay exorbitant prices but it will pay fair prices that ensures that there is adequate capacity in the health care delivery system. Patients have their choices of their health care providers, and the providers don’t have to deal with private intermediaries since payment is automatic. They just take care of the patients.
So is this legislation a fair resolution of the problem, leaving it in control of the private sector? What is fair about allowing the insurers to selectively contract with whom they wish, depriving patients of their choices, but also granting the insurers the right to demand contracted rates from providers with whom they have no contracts? Besides, with a system already overburdened with administrative excesses created by the private insurers, why should we be adding the additional administrative burden of compulsory arbitration?
So let’s go back to Congress and define for them the problem. Well, it’s the insurers, stupid. We need to dump the private insurers and establish our own single payer improved Medicare for All. Yet Pelosi and Schumer and the Republicans and the neoliberals who all understand the clear superiority of the Medicare for All model have continued to exclude it from consideration. Affordable, equitable health care for everyone. Why do they keep rejecting that?
By the way, for you doctors who refused to join the networks because you wanted your full extortionate fees seem to be the same doctors who pushed for mandatory arbitration in this legislation. If you think you are going to get your full fees, you should realize that this is baseball arbitration. Under those rules the arbitrators will not cut a compromise but rather will decide on behalf of one party. Will they decide on behalf of the insurer who will pay standard contracted rates in the community, or will they decide for you and your outrageously high prices? Guess what, doctor, you lose, and you also get to pay the arbitration costs. Medicare for all really would be a better deal for you – a system in which the patient is your friend rather than your enemy.
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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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