Surprise-billing proposals an increasing social risk for hospitals, Moody's says

Federal proposals to end surprise medical bills pose an increasing social risk for hospitals and healthcare staffing companies, particularly those that treat a large share of out-of-network patients, according to a newly issued report by Moody’s Investors Service.

Federal lawmakers have been ramping up efforts to address surprise billing that occurs after insured patients unintentionally receive care from out-of-network providers. This often happens in emergency situations.

Surprise-billing proposals include banning out-of-network deductibles in emergencies and establishing an arbitration process to settle out-of-network payment disputes between health plans and providers.

But Moody's said a bundled billing proposal — which would require one bill for emergency care or have hospitals pledge that their affiliated physicians and service providers are not out-of-network — would have the most negative effect for hospitals and healthcare staffing companies.

"This is because many hospitals completely outsource the operations and billing of the emergency department to a staffing company," the agency wrote. "Bundling the services would require a significant change in the relationship between these entities. Further, an in-network guarantee would add significant complexity because many physicians and ancillary service providers are not employed or controlled by the hospital."

Moody's said it also projects that the largest providers would be the least affected by the proposals due to their notable negotiating leverage with insurers.

Changes could also lead to more consolidation as smaller providers with high out-of-network exposures would likely be more willing to join a larger group, the agency said.


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