Proposing action to limit out-of-pocket (OOP) expenses for health care is politically popular. Not surprisingly, Presidential candidates and Congress often do so. During the last Presidential campaign, Democratic candidates proposed to limit Medicare OOP expenses. As Congress currently focuses on rising prescription drug prices, one solution has been to cap OOP expenses for medications. There have also been calls to limit overall OOP expenses as high-deductible plans proliferate. While it helps people with high health expenses, it does not solve the underlying problem of health care inflation and leads to higher premiums in the future. According to the Kaiser Family Foundation, from 2006 through 2016, OOP expenses have risen54%, primarily driven by higher deductibles in all plans including HSA-qualified high-deductible plans. During the same period, wages grew only 29%.
The growth in OOP expenses does not reflect balance billing for out-of-network services. Increasingly, people may receive “surprise bills,” bills from out-of-network (OON) physicians even though they sought care at in-network hospitals. Most concerning, facility-based physicians (emergency room physicians, anesthesiologists, surgical assistants, radiologists, and pathologists), generally not chosen by patients but provided by hospitals, are the most common sources of surprise bills. As a result, Congress has considered enacting legislation to ban balance billing in these situations and mandate a process and rate schedule for provider payment by plans in these situations. The Administration is also considering action to require hospitals and other facilities to take steps to reduce the occurrence of surprise billing.
Congress and the Administration should act to:
- Prohibit balance billing by emergency providers and OON providers at in-network facilities
- Patients and consumers have a right to be adequately informed of potential health care charges, including OON charges, and to have the ability to authorize any non-emergency service by an OON physician at an in-network hospital. Facility-based physicians, and the facilities, should disclose price and quality data so patients can make informed choices about treatment.
- Solutions to surprise billing should serve to lower, not increase, premiums and costs for consumers.
- Policymakers should not incentivize providers to reject network participation.
- We are concerned that mandated arbitration would raise costs and undermine network participation. It would also be an inefficient and ineffective method of addressing surprise billing.
- Since facility-based providers are the most common source of surprise bills, and they are not generally selected by patients but rather have contracts with in-network facilities, and the value and financial protections afforded by in-network facility status are diminished when these providers remain out-of-network, NBGH believes that hospitals and other facilities must play a key role in solving the issue. For example, solutions should require that hospitals also require that these providers either contract with the same insurers they do or prohibit separate billing by these providers apart from the hospital bill.
- Any legislation should ensure that value-based payment arrangements, which depend on provider participation in networks, are not hindered through unintended consequences of the law. These programs and benefit designs help reduce costs and improve patient outcomes.
- ERISA provides the framework that allows employers and employees to benefit from reduced costs that come from uniformity in plan design and administration without the burdens of a patchwork of state and local laws. Self-insured plans must not be subject to state laws relating to surprise OON billing, including with respect to state mandatory binding arbitration or payment requirements.
WHY IT MATTERS
- As provider consolidation increases, surprise billing is likely to be an increasing occurrence without legislative or Administration action. This will raise costs for employees and employers and undermine the value of in-network status, and the financial protections of seeking care in in-network facilities.
- Unfortunately, early legislative proposals being considered were heavily influenced by the provider community and risked enshrining into law mandatory arbitration and the use of rates that would benefit providers who surprise bill.
- Hospitals and other facilities are at the center of the solution. Some hospitals already require that providers in their facilities have contracts with the same insurers they do. Other hospitals prohibit separate billing by facility-based physicians. In cases where these physicians balance bill, often there are contractual arrangements between the physicians and hospitals with financial guarantees and it benefits the hospital for these physicians to balance bill.
- As we move away from fee-for-service toward accountable care and more global payment, peeling off these services from the bundle of emergency care or other services works in the opposite direction, reinforces fragmentation, and makes it difficult to manage the costs of care.
Also of Interest