We have been reading and hearing a lot about "Surprise Billing" these days and imagine that you all have too. It is a topic that has garnered the attention of the media, lawmakers, patients, and health systems. But what is "surprise billing," and why is it so controversial? Let's take a closer look at both of these questions.
Surprise billing, also known as balance billing, occurs when a patient inadvertently receives care from a health care provider who is not in their insurer's network. Frequently, the patient may not realize that they have used an out-of-network provider until they are "surprised" by a health care bill sometimes months after the encounter. Although some health insurers cover partial costs of out-of-network providers, many do not. This disconnect can result in staggering bills that can impose an insurmountable debt on a household.
Surprise bills are most common in emergency room visits when patients have little choice of provider and no time to do their research. It's even possible for patients to end up with surprise bills even when they choose an in-network facility for their care. For example, a surgeon may be in-network, but the anesthesiologist assisting with the surgery may not be. Unfortunately, however they originate, surprise bills are a significant cause of financial strain on patients.
However, policymakers and stakeholders have differing views on how to resolve this issue in an equitable and sustainable manner. There is no disagreement that surprise billing is a practice that requires reform, but how to address both the consumer's needs and those of our health industry is the nexus of disagreement.
Congress has put forth a variety of legislative options to address the complexities of this issue. They are highly technical solutions which are beyond the scope of this blog but in short, Congress would impose rate control measures ("benchmarking") on the insurance industry to create uniformity and consistency with regard to out-of-network costs and, establish a more effective arbitration system when there is disagreement between providers, consumers, and insurers. Most consumer protection groups have endorsed these solutions as practical approaches to a compromise.
Other stakeholders, however, disagree. Physician and hospital advocacy groups have voiced strong opposition to these proposed legislative solutions, especially benchmarking. They claim that a federally set rate will never be able to account for all the varying factors that determine the price of care. They argue that the benchmark would be especially harmful to rural hospitals, which are already financially challenged by the high need and low-income patients that they serve. Similarly, opponents contend that sizeable public health care systems offering high rates of uncompensated care will be further challenged by rate setting and perhaps be unable to deliver additional charity care.
Another critical concern for physicians is the negotiating power a benchmark would give to insurers. Currently, physicians who are unsatisfied with the terms offered by insurers can decline to go in-network and still get paid through standard billing systems. However, if the ability to negotiate goes away, it may drive more and more physicians out of the system based on the lack of reimbursement received for their services. Obviously, if this were to happen, the health care industry as a whole would feel the impact, and it's hard even to predict what that impact might result in for both consumers and providers.
The takeaway message is this; surprise billing is a complex confluence of issues that are at the very heart of our health care system. How do we pay for healthcare? How can consumers access quality care in a manner that they can afford-even under emergency circumstances? How does cost relate to the quality of care if we create a situation that is not financially sustainable for providers?
Congress is attempting to legislate in this space, but to what end, no one really knows. Both chambers have bills to address this issue, but neither has been able to gain enough support to pass. Additionally, these bills address this problem in differing ways, adding yet another layer of concern regarding the ability to obtain a legislative fix any time soon. So, while we wait to see how both the public and private sectors negotiate this challenging issue, we hope that this blog has at least provided a better understanding of the problem itself and why it might matter to you.
*Contributing author: Thomas Roades