Congress could soon be on the verge of ending a longstanding billing practice contributing to the high cost of medical care in this country—and not a moment too soon. Surprise medical billing, as it is commonly known, happens when a patient receives out-of-network care at an emergency room or hospital. The patient is later hit with the “surprise” of sky-high bills for treatments and services they had assumed would be covered by insurance. To end this pressing problem, some lawmakers have proposed the government price-setting of physician rates. That would only make the problem worse. Instead of doubling-down on failed federal “solutions,” policymakers can (and are) looking for a balanced approach that relies on negotiation and transparency to end surprise billing.
There is nearly unanimous support by all parties involved, including medical providers, insurers, and patients, for protecting Americans from surprise billing. However, differing legislative tactics to achieve this goal underscore some serious rifts that must be bridged.
Unfortunately, even some supposed conservatives in Congress seem to be championing a dangerous proposal that would put the government in control of key payment decisions. Legislation introduced in both the House of Representatives and the Senate would put in place a government-mandated benchmarking approach to settle payment disputes between insurers and physicians. On the surface, this may solve one problem by protecting patients from “surprise billing.” But this “solution” would merely give rise to an entirely new, and much more serious, set of problems that would seriously compromise medical care for patients nationwide.
Benchmarking would lead to government rate-setting and amount to price controls in which Washington, D.C. bureaucrats would be charged with determining and setting rates for physicians across the country. This would be a national healthcare nightmare.
By basically ignoring the huge differences in difficulty and cost for providing medical care in different parts of the country—and even among different types of health care facilities—benchmarking would create an artificial imbalance in the marketplace that would add up to insurmountable financial losses for some of the very healthcare institutions that are serving our nation’s most at-risk, hard-to-reach rural communities.
Additionally, bureaucrats with an agenda could tinker with different definitions of specialties and services to engineer prices that they deem to be fair. Similar sounding procedures can have very different outcomes and should come with different price tags. The federal government doesn’t have the best track-record in understanding these nuances, and there’s little reason to think that any new surprise billing bureaucracy would be any different.
Patients don’t need the government to be any more involved in healthcare than it already is. Instead, Congress should work to incorporate a market-based approach into legislation that addresses surprise billing issues. Fortunately, one such approach has already been outlined in the STOP Surprise Medical Bills Act, S. 1531. The legislation calls for an Independent Dispute Resolution (IDR) system that would empower doctors and insurers to negotiate openly, fairly, and transparently in order to resolve out-of-network payment disputes.
IDR is the only solution in Congress that has a winning track record. New York implemented a similar system back in 2015, and it has not only protected patients from “surprise billing,” but also helped increase network participation and decrease out-of-network rates and billing. All of that while keeping costs stable for care provided by emergency room doctors. It has been so successful, in fact, that a handful of other states, including Washington and Texas, have passed similar measures.However, this remains a national problem that warrants a national solution. Federal legislators should look to replicate the success New York has seen and ensure that whatever bill Congress ultimately passes to resolve this issue once and for all incorporates the IDR framework. Lawmakers should put benchmarking on the backburner, and use a proven method grounded in competition and transparency to end surprise billing.
