Have you ever gone to the ER for a medical emergency only to receive a bill for thousands of dollars a few weeks later despite having insurance? If so, the good news is that you are not alone. The phenomenon known as surprise medical billing has impacted roughly half of all Americans according to a 2018 . In fact, a showed Americans were more concerned about their ability to pay for an unexpected medical bill than their mortgage, health insurance deductible and prescription drug costs.
So, what exactly is a surprise medical bill?
Surprise medical bills generally arise from a patient inadvertently receiving care from an out-of-network provider. This situation typically occurs when a patient visits a hospital that is not in their insurers’ network or worse, goes to a hospital that is in network but receives care from a physician at that hospital that is not in network.
I really want to hone in on this last possibility because it is one that draws the most ire. Imagine being an informed patient that has done their due diligence and confirmed that both a hospital and the physician performing your surgery are in your network. But, unbeknownst to you, the anesthesiologist is out of network. (Anesthesiologists = $$$ if you didn’t know.) Next thing you know, a nice hefty bill arrives at your mailbox.
When patients receive care from out-of-network providers, they are usually held responsible for the difference in cost-sharing and are “balance billed”. Balance billing covers the difference between the cost that the health plan will allow and the actual charge of the service. For more information on balance billing and efforts underway to limit the practice,
To crack down on surprise medical bills, both the Senate and House of Representatives have introduced bipartisan legislation. This follows the President himself the practice and calling on Congress to act.
The Senate’s bill, , would generally prohibit balance balling and implement a civil monetary penalty for those in violation. However, if a healthcare provider, group health plan or health insurance issuer accidentally balance bills but reimburses the patient within 30 days, they will not be deemed in violation. The Senate bill also calls for the normal in-network cost-sharing amount to apply in situations in which a surprise medical bill would normally arise. It also includes language calling for the establishment of an independent dispute resolution process.
The House of Representative’s draft bill, , also has language to prevent balance billing in certain instances. In addition, it would limit emergency out-of-network services cost-sharing requirements to mimic those that would apply if the service was rendered in network. This bill would also eliminate surprise bills for non-emergency services furnished by out-of-network providers at in network facilities. Lastly, it also eliminates surprise bills for out-of-network providers patients typically don’t have a choice in, like the costly anesthesiologists I mentioned earlier. If enacted, these changes would apply starting January 1, 2021.
While most people oppose surprise medical bills, finding a solution to fix them isn’t as easy as it seems. Key stakeholders like physicians, hospitals and insurers all acknowledge that surprise billing harms patients, but none of the groups want to “”.
One model that has shown early success in several states but is a source of much debate among stakeholders is the “baseball model”. This references the policy approach whereby patients are held harmless and the health plans and provider are left to directly negotiate payment. If the plan and provider cannot come to an agreement, they may appeal to an independent arbiter to decide remittance. Both New York and New Jersey have adopted this model and utilize a URAC accredited independent review organization (IRO) as the state’s independent arbiter.
It will be interesting to see if other stakes take up similar legislation and how the industry will respond if these bills move forward.