How New York's 'baseball-style' arbitration process reduced surprise bills: 7 notes

A New York state law — and its "baseball-style" arbitration process — has captured the attention of federal lawmakers as they work on legislation to prevent surprise medical bills, according to a Vox report.

Seven things to know:

1. Surprise medical bills occur when patients receive a bill from a healthcare provider who is out of network and the patient is responsible for the difference. Often, the bill comes as a surprise to patients because they visit an in-network facility, but are seen by an out-of-network provider.

2. New York passed a law to protect patients from surprise billing situations in 2015. The law includes a binding arbitration process that is inspired from professional baseball, according to Vox.

3. Major League Baseball's arbitration process is reportedly used to settle salary disputes between newer players and their teams. The player and team both name an appropriate salary, and an arbiter makes one binding choice.

4. New York's law uses this baseball-style arbitration to settle price disputes between physicians and insurers. Jeffrey Gold, a senior vice president with the New York Hospital Association, who helped work on the law, told Vox the process incentivizes physicians and insurers to choose an amount that is reasonable because "whoever is closer to reality wins."

5. Over a two-year period, New York's law has helped settle about 2,000 billing disputes, according to the report. Research published in 2018, cited by Vox, also showed that out-of-network bills fell nearly 35 percent statewide after the law was implemented. Additionally,  prices charged by in-network emergency room physicians declined 9 percent, according to the research.  

6. New York's law has been inserted into the national debate about federal surprise billing legislation. It reportedly inspired proposed legislation from Sen. Maggie Hassan, D-N.H., who is working with colleagues in the Senate on an approach to prevent surprise emergency bills.

7. Vox notes that federal legislation inspired by New York's law would address unexpected bills patients receive from out-of-network providers but would not significantly address the rising cost of healthcare.

Access the full Vox report here.


More articles on healthcare finance: 

Insurers, hospitals spar over surprise billing: 8 things to know
MedPAC reports to Congress: 8 takeaways
Trinity Health CFO Ben Carter talks markets, mission and sustaining momentum

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