There seems to be near unanimous, bipartisan agreement in Congress that patients must be held harmless from the effects of “surprise billing”. Given the state of political discourse, we all take some solace that there is broad agreement that this issue must be addressed. However, as Congress and stakeholders decide who should be held responsible for payments in place of patients, there is the potential for policymakers to choose a superficial solution to this issue without addressing the root causes. Congress should adopt a model that holistically addresses the issues of surprise billing and allows for unintended consequences to be mitigated.
A “surprise bill”, also referred to as “balance billing”, occurs when a patient receives a bill from a provider for services reasonably expected to be covered by their insurer. This situation typically occurs when a patient visits a hospital that is in their insurance network but receives care from a provider that is considered out-of-network and then receives a bill for those services from the out-of-network provider. This practice has led to patients receiving bills for services they believed would be covered, at least in part, by their insurer. These unexpected bills can sometimes reach hundreds of thousands of dollars.
Several states have enacted laws to stop this practice and hold patients harmless from having to bear the cost of surprise bills. Congress is looking to do the same for those patients who receive insurance through their self-insured employer. However, Congress is debating who should be held responsible for payment and at what rate should payment be made for instances of surprise billing as we describe above.
Several of the options being considered only address one part of surprising billing: payment rate. At present Congress is debating requirements that would tie reimbursement rate for out-of-network providers who produce a “surprise bill” to either the health plan’s in-network rate or a geographic benchmark rate. This narrow focus on payment does not address the other important components in the delivery of care that must be evaluated prior to payment including consideration of the complexity of the care delivered and appropriate coding before addressing price. Models to address surprise billing like geographic benchmarks and in-network lock-in rates are only focused on what a payer must reimburse and do nothing to account for the other common elements of payment in healthcare today which exist not only to ensure proper and timely payment but to ensure patients receive safe and appropriate care.
We recommend that Congress focus on the patient care aspect of this issue and adopt a model that takes into consideration all factors, including payment and the appropriateness of both coding and the care delivered. We believe that the only model presented to date that allows for such incorporation is the arbitration model with experienced independent review organizations (IROs) successfully adopted by states like New York.
Congressional focus on payment rate has stalled final enactment of a solution to surprise billing as payers and providers spar over how much an out-of-network provider should reimbursed. This is not a surprising result as Congress’s narrow focus does not remove cost from the system but simply changes the nature in which it is derived. We believe that the arbitration model not only has the potential to be a fair compromise between stakeholders, but it also has the potential to lower cost from the system by considering the complexity of the care and the appropriateness of the coding at the same time.
The arbitration model has an existing framework upon which to be built as demonstrated by New York and New Jersey. We believe the utilization of accredited IROs in this role provides all stakeholders with a qualified, reliable, arbiter. Accredited IROs are working today in every community across the country to render independent coding and clinical decisions and ensure the integrity of the review process. They too can be trusted to render independent payment decisions to resolve payment disputes while holding patients harmless.
URAC and NAIRO know firsthand the hardship and burden placed on patients and their families due to lack of coordination and misaligned billing practices in our delivery system. We believe this bipartisan effort is an important step to improve America’s healthcare system. We encourage Congress to avoid adopting a solution narrowly focused on payment and adopt a model that incorporates broader patient protections.