Horrors of Surprise Medical Bills - MINDSETTER™ Rickman

Saturday, October 05, 2019

Ray Rickman, MINDSETTER™

 

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If you or a loved one hasn’t received a surprise medical bill yet, consider yourself lucky. These bills, which occur when a patient at a hospital that accepts their insurance is treated by an out-of-network physician or specialist, have become increasingly common. In 2016, over 40% of all hospital visits resulted in a surprise bill. Without a decisive political solution, they will only proliferate further as insurance companies narrow networks and doctor shortages strain hospitals.

I had the misfortune of learning about surprise billing in 2017, when I went for an eye operation I was told was covered by my insurance. After the operation, the insurer explained that three parts of the surgery were performed by different doctors who weren’t in my insurance network, so I was expected to pay their costs out of pocket.

Luckily, I had the financial resources to settle my balance without significant hardship. Having grown up in segregated Detroit, and working for most of my career as an advocate for lower-income Americans, I know all too well that many people would be put into arrears by a surprise medical bills. To a family barely making ends meet between rent, food, car payments, and insurance bills, having to come up with thousands of dollars is a financial disaster.

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Thankfully, Congress is working to address this problem. While our government often seems hopelessly gridlocked, there is actually an emerging consensus that surprise medical bills require a federal legislative remedy. Rep. Richie Neal (D — Massachusetts) has been working hard to find a bipartisan solution. Lawmakers must enact a solution that will protect patients from surprise medical bills without major disruptions to health care access or affordability. Not all the proposals in Congress can guarantee that.

Federal rate setting, also known as benchmarking, has been considered as a solution. While it sounds simple on paper, it would threaten access to healthcare in rural and low-income communities that can least afford the disruption.

Essentially, benchmarking to surprise medical billing would see the government setting rates for physicians performing out-of-network care. This ties an out-of-network doctor’s compensation to the insurers’ in-network average reimbursement rate, creating a huge incentive for insurers to race to the bottom. Insurers would lower their reimbursement rates to drive down costs throughout the healthcare system. In turn, these arbitrary low rates would result in enormous financial burdens and losses for hospitals and emergency rooms, as they are forced to choose between picking up the slack between driving away qualified doctors and filling the gap between market prices and what insurers will pay.

While large hospitals would be able to absorb this burden, it would be catastrophic for the smaller, regional hospitals that serve lower-income urban and rural areas. These hospitals are already struggling, further compounding their fiscal woes could drive them into bankruptcy.

There is a better way. Congress should pass a legislative solution based around Independent Dispute Resolution (IDR). Under IDR, physicians and insurance companies would enter into a negotiation process in which each party is able to submit their most reasonable payment offers during out-of-network billing disputes. Within 30 days, a neutral, third-party mediator would determine a final amount to ensure a fair outcome is reached

Most importantly, IDR is known to work. In New York, which passed a state law that uses IDR to settle out-of-payment billing disputes in 2015, patients are now protected from surprise bills. Moreover, in-network participation has increased, out-of-network billing rates have dropped drastically, and emergency care costs have dropped as well. According to a study by Georgetown University, both insurers and healthcare providers think the arbitration process is fair - a small miracle for two fundamentally opposed interests.

Surprise billing is a problem that has been allowed to fester for too long. Federal lawmakers should support the IDR process to stop surprise medical bills. Any bill passed by Congress should include it, protecting vulnerable patients while preserving access to care for low-income communities.

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Ray Rickman is the co-founder of the non-profit Stages of Freedom and heads the public affairs firm — The Rickman Group. He is a former State Representative and Deputy Secretary of State for Rhode Island.

 

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