APA Joins Other Medical Groups to Call for Balance in ‘Surprise’ Medical-Billing Legislation
Abstract
Proposed “surprise” medical-billing legislation may give insurers too much market power by allowing them to set out-of-network physician fees based on their own median rates. The AMA joined a physicians’ coalition asking lawmakers to adopt a more balanced approach using commercially reasonable rates and independent dispute resolution.
APA signed onto a letter by the AMA to both houses of Congress last month asking for a more balanced approach to “surprise” medical billing that would not hand over power to insurance companies by allowing them to set reimbursement rates for out-of-network physicians.
The letter, which was signed by more than a hundred physician organizations, pointed out that proposed legislation could worsen staffing shortages in rural areas and other underserved communities. Unanticipated, or “surprise,” medical bills happen when patients unknowingly or without other options receive care at an in-network facility from out-of-network physicians.
Legislation under consideration, both S 1895 and HR 2328, allow health plans to set rates for out-of-network physician payments, based on their own median payments to in-network providers, which would likely worsen access problems for patients seeking hospital-based care from on-call specialists, according to the letter. Median health plan payments are typically lower than average rates, Congressional Budget Office (CBO) research found.
The letter emphasized that patients should be held harmless for any costs above their in-network cost sharing and removed from payment disputes between their health insurance and out-of-network providers. At the same time, “it is essential that any legislation does not create new imbalances in the private health care marketplace,” the letter urged. “The health insurance market is already heavily consolidated, which can result in artificially low payment rates and anticompetitive harms to both consumers and providers of care.”
APA CEO and Medical Director Saul Levin, M.D., M.P.A., said that in light of the nation’s increasing demand for behavioral health care and shortage of health care professionals, any solution to surprise medical billing must not further jeopardize the provision of care. “Health plans typically reimburse behavioral health care specialists 20% less than they pay primary care providers and offer ‘phantom’ networks to their subscribers with disconnected phones or physicians who are not taking new patients. We implore lawmakers to adopt a commercially reasonable payment rate and payment appeals processes, while requiring enforceable network adequacy standards and stronger enforcement of mental health parity.”
About 1 out of 6 emergency visits or in-network hospital stays resulted in out-of-network billing, according to a 2017 analysis of large employer claims by the Kaiser Family Foundation. More than a dozen states have now passed comprehensive laws to address surprise medical billing in state-regulated health insurance plans.
However, most workers are covered by self-insured, large employer plans that are not subject to these state laws. Democratic and Republican lawmakers are vowing to pass federal legislation aimed at solving the problem of surprise billing, an effort supported by President Donald Trump.
The CBO found that the vast majority of health care is delivered by in-network providers, yet more than 80% of the estimated budgetary effects of S 1895 and HR 2328 would come from changes to reimbursement rates for in-network physicians. “In other words, in-network providers who have not contributed to the problem will bear the impact of the rate-setting scheme,” the letter pointed out.
The letter calls for lawmakers to include the following provisions in legislation to address surprise billing:
Set an initial payment for out-of-network physicians that reflects a commercially reasonable and fair rate in the private market, using an independent claims database (rather than relying on health insurance companies’ median in-network rates).
Establish an independent dispute resolution (IDR) process to settle payment disputes and give health insurers an incentive to offer fair initial payments for out-of-network care. In July, the House Energy and Commerce Committee adopted an IDR process in HR 2328 as a backstop measure.
Lower the proposed threshold that would trigger the IDR process and allow for “batching” of claims that involve identical plans and providers and similar procedures.
Require stronger enforcement of federal mental health and substance use disorder parity laws.
Establish measurable and enforceable network adequacy standards for insurance companies, so patients are not routinely pushed toward out-of-network care.
The letter noted that New York’s surprise-billing law took effect in March 2015 and saved patients more than $400 million in emergency services alone, reduced out-of-network billing in New York by 34%, and lowered in-network emergency physician payments by 9%. At the law’s center is the IDR, which removes consumers from billing disputes and gives a process for settling billing disputes. Filing a dispute involves providers visiting a website and completing a two-page, online form.
“This contrasts with the often voluminous filing requirements necessary for physicians and other providers to obtain prior authorization ... just to provide covered benefits to their patients, even for mental health and substance use benefits,” the physicians’ letter pointed out. ■
