Over the last few years, a battle has been brewing in Washington over a problem known as “surprise billing,” which is when someone goes to an emergency room, and later gets a massive medical bill because the ER doctor is not covered under that person’s insurance plan. It’s a surprise bill because the insured patient incorrectly assumed that because they were going to an “in-network” hospital, their ER visit would be covered.
But, many ER doctors, and oftentimes anesthesiologists and radiologists, working in a hospital are not covered under that hospital’s agreements with health insurers. This creates a situation where the patient gets a massive bill directly from the doctor.
Some estimates are that nearly 20 percent of ER visits result in a surprise bill. Surprise medical bills can run in the tens of thousands of dollars and cause untold grief. This is especially true if the patient was the family breadwinner and is no longer healthy enough to work. As someone who spent nearly a lifetime in elected office, I still get calls from former constituents asking for help with surprise medical bills.
Like myself, my former colleagues on Capitol Hill were inundated with heart-wrenching complaints about surprise billing, and Congress decided to act. Working together, doctors, hospitals, insurance groups, patient advocates, consumer groups, and many other healthcare stakeholders came together late last year and Congress passed bipartisan legislation to end surprise billing.
According to the new law, if the doctor, hospital, and the insurer cannot agree on a fair reimbursement for the services provided to the patient, the negotiation automatically goes to arbitration. What is negotiated in that arbitration process is what the doctor gets paid and what the insurer must cover. This process resolves the matter and the insured patient does not get a surprise bill.
But how the current administration is interpreting this law – set to go into effect in 2022 – creates a situation that gives insurers an upper hand in their negotiations with doctors and hospitals during arbitration.
The problem is that the current proposed rule completely ignores the law as it was written and intended. The rule specifically laid out intentions that the arbiter is to weigh each factor without giving one any special consideration; but the current rule gives additional weight to one factor, median in-network price. This means that over time, the insurer can learn the median in-network price for any procedure, like setting a broken arm or a neck x-ray, which will give them leverage during negotiations because they will know their floor price.
Now, not surprisingly, doctors and hospitals have filed suit against the federal government for this matter, and it is surely going to be tied up in the courts for years. It’s also going to be an additional hardship for hospitals and doctors who are already struggling.
Understand, across the nation, hospitals and doctors are currently bearing the brunt of the pandemic, dealing with both massive stress loads, and a loss of revenues due to COVID-19. In many rural areas, hospitals are closing because they cannot afford to stay open, which is a serious problem in my home state of Mississippi. In fact, since 2010, according to the Cecil G. Sheps Center for Health Services Research, 136 rural hospitals have closed across the nation.
So, how are health insurers fairing during the pandemic?
According to recent news reports: “U.S. health insurance companies beat analyst expectations and reported billions in profits in the first quarter of 2021, after making a windfall in the first year of the COVID-19 pandemic.”
It seems pretty clear to me that health insurers are thriving and hospitals are closing. Therefore, why should the American government be asking doctors and hospitals – the people who are actually providing the patients the medical treatment – to take on this additional financial strain to resolve surprise billing? The Biden administration needs to fix this mess, and reconsider the value that arbitrators put on reimbursing hospitals and doctors for “median in-network price.”
