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As President Trump famously said, health care is complicated.
With the advent of high-deductible health plans in particular and the move from flat dollar copayment amounts to co-insurance percentages, Americans, understand the importance of going to in-network facilities or hospitals, obtaining prior authorization from the insurance carrier for a particular procedure or service, and seeking treatment from a participating physician or provider.
However, even when all these “t’s” are crossed, many people still find themselves saddled with a “surprise bill” by a physician they didn’t choose to see or even interact with directly. Surprise billing is commonplace in the U.S. – but it shouldn’t be.
The problem is pretty targeted in terms of the circumstances under which these surprise bills arise. Generally, these surprise bills come from four different specialty physicians that are facility-based: Emergency room physicians, Radiologists, Anesthesiologists, and Pathologists (ERAP) doctors.
In response to this problem, members of Congress in both parties and President Trump are seeking input and drafting legislation to end surprise billing. Proposals in the House and Senate are circulating and another congressional hearing on this issue will occur this week.
Earlier this month, President Trump announced a number of guiding principles that Congress should consider in drafting legislation to address this problem by first and foremost protecting well-intending patients. They include:
- Patients receiving scheduled care should have information about whether providers are in- or out-of-network and what costs they may face.
- Patients should not receive surprise bills from out-of-network providers they did not choose.
While we support the President’s goal of protecting patients financially, additional components of the issue must also be addressed to solve this complicated problem. Particularly, there is another critical issue that Congress must take into account when developing a legislative solution.
Congress must address the underlying dispute that remains after the patient is protected: the reimbursement clash between the insurer and the out-of-network, facility-based physician. To avoid what can frequently be costly and time-consuming litigation, negotiation, or arbitration, an alternative solution must provide some certainty and flexibility as to how these surprise bills for out-of-network claims are resolved. An appropriate solution should reflect the geographic differences in the cost of services, consider the rates established by the private market for these services, and increase predictability for employer plan sponsors.
A common sense, viable solution
The U.S. Chamber of Commerce has developed a solution that both protects the patient while addressing the underlying payment dispute without litigation. The U.S. Chamber’s recommended solution is to create a benchmark that allows issuers to reimburse facility-based ERAP doctors for out-of-network services based on the median in-network reimbursement for that same service.
For example, an individual covered by Insurer X has a scheduled caesarian section with her in-network OBGYN at an in-network facility where the OBGYN has admitting privileges. The individual has a lab report that an out-of-network pathologist reads and interprets. The patient’s insurer and the facility-based physician should agree to a reimbursement rate for that service, which is based on the average in-network rate for that same service (reading and interpreting the lab report) in that geographic area. This would tie the reimbursement to the average market rate in a geographic area for the same service and provide an incentive for the facility-based ERAP doctor to try to negotiate a better in-network rate.
Moving forward, the U.S. Chamber is hopeful that we as a nation can come together to resolve the issue of surprise bills and remains committed to patient-centered health care that relies on our private sector to increase efficiency and affordability.