Experts talk surprise billing: 4 key takeaways

Federal lawmakers are considering various legislative fixes to protect patients from unanticipated out-of-network medical bills, known as surprise bills.

All the proposals include patient protections, such as prohibiting balance billing and ensuring patients’ cost-sharing is based on their in-network amount. To determine out-of-network payments from insurance companies to healthcare providers, some proposals would use an independent third-party to settle payment disputes, an approach known as arbitration, while others would use a benchmarking approach that would set a rate to determine payments.

As proposals move through Congress with rare bipartisan support, a debate has erupted between physician groups, hospital groups, patient advocates, employers, and insurers regarding the mechanism to determine out-of-network payments included in the proposals.

During a panel discussion at Becker's Hospital Review's 5th Annual Health IT + Revenue Cycle Conference in Chicago Oct. 10, three policy and industry experts spoke about surprise billing to dispel some myths about the debate and discuss unintended consequences of the proposed legislations.

The panelists included:

  • Anthony Gabriel, MD, COO and co-founder of Radiology Partners and chair, Physicians for Fair Coverage
  • Robb Walton, BGR principal and former senior health policy counsel to Sen. Bill Cassidy, R-La.
  • Erin Richardson, vice president and associate general counsel of the Federation of American Hospitals

The session was moderated by Ed Gaines, vice president of regulatory affairs and industry liaison for Zotec Partners, LLC.

Here are four topics discussed:

1. The dispute is not about the patient. The panelists agreed that the patient should be protected from surprise medical bills, some of which can be quite large, which occur when an out-of-network physician treats a patient at an in-network hospital. Mr. Gaines pointed out that the debate has shifted as each side agrees that the patient should be removed from reimbursement disputes—it has instead become a debate over whether physician reimbursements should be benchmarked to a standard, e.g. in network median rates, whether or not there is a mechanism for physicians to dispute the reimbursement formula used.

"Protecting patients is key, and everyone agrees on that point. The disagreements about balance billing come in the back-end reimbursement process between physicians and insurers, Ms. Richardson said.  

2. Rural healthcare may be most at risk from some of the proposed changes. The benchmarking approach could be devastating for health care providers, particularly rural physicians and hospitals, or worsen access issues, according to Ms. Richardson. 

"We are concerned about the impacts a benchmarking approach will have across health care providers, and particularly in the underserved rural communities where some hospitals are already struggling to recruit physicians and keep their doors open, " Ms. Richardson said.

3. Hospitals, provider groups argue without a third-party dispute resolution process in place, payers have an advantage. One of the main points of concern for hospitals and physicians is ensuring an independent dispute resolution process is in place to resolve payment issues between insurers and providers, the panelists explained. Without an independent dispute resolution in process, payers would only reimburse providers the median in-network rate in the event one of their enrollees receives out-of-network care, cutting reimbursement rates for physicians and hospitals. From the provider perspective, an independent dispute resolution would allow for a more balanced negotiation process, the panelists said.

"What a surprise billing [solution] is really about is changing the playing field for how payers and providers negotiate with each other… [and if] there's no dispute resolution process in place it really gives a huge advantage to the payer in those negotiations," Dr. Gabriel said.  He continued that with a “median in network formula” half of the physicians by definition would be above the median and those rates would be adjusted down over time to the median. Mr. Gaines stated that the non-partisan Congressional Budget Office determined that over 80 percent of the potential "savings" from benchmarking physician rates would indeed come from the decline in in-network rates as they are managed downward to the median rates.

4. Multi-million-dollar ad campaigns made the debate largely pro-provider or pro-health plan. A group called Doctor Patient Unity on the pro-provider side and the Coalition for Surprise Medical Billing on the pro-health plan side spent tens of millions on advertisements and direct-to-consumer mailing with very aggressive messaging. These campaigns have led to a public relations fight, pinning legislation to be either pro-provider or pro-insurance, said Mr. Walton.

"While there is definitely a compromise solution, the way that it's perceived in the narrative is either you choose health plans winning or the providers winning," he said.

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