Surprise Medical Billing: What the Government Is Doing to Stop It

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Medical care is one of the few things we purchase without knowing the price for it. Imagine walking into a grocery store and filling your cart without having any idea what the food cost, or picking out a new wardrobe and handing over your credit card to the store clerk without knowing the price of the clothing. You probably wouldn’t do it, and if you did, you probably wouldn’t do it again after seeing the bill.

But for medical care, especially emergency medical care, we consent to treatment (and to pay for that treatment) all the time without having any real idea what it will cost. Often, the costs are outrageous, and unavoidable.

One example: a patient, R, was diagnosed with a rare cancer, which only one hospital in the state was equipped to treat. The treatment required a surgery to implant a radioactive device near the tumor, another surgery five days later to remove it, and a hospital stay in between to avoid endangering the public with the radiation. R’s insurance covered the surgeries, but not the hospital stay in between, during which she received meals, medication, and a daily visit from a resident. The bill for those five days? $64,000.

Fortunately, R’s surgeon was willing to intervene and ultimately persuaded the insurance company that the inpatient stay in an out-of-network hospital was necessary. Once insurance covered this aspect of treatment, R’s bill was less than a thousand dollars.

However, the scenario in which many patients are faced with surprise medical bills involves an emergency room visit. They have no ongoing relationship with a doctor who can advocate for coverage for their care, and in fact, may not even remember their treating doctor’s name by the time their (enormous) bill for service arrives in the mail.

Legislation to Address Surprise Medical Billing

So what exactly is “surprise medical billing?” Also known as “balance billing,” it happens when a patient receives medical treatment from a hospital or doctor who is “out of network” for their medical insurance. It is not always obvious when a provider is out of network, and in a medical emergency, it is unlikely that confirming in-network status is going to be a high priority.

Insurers cover less of the bill from an out-of-network provider, or may cover none at all. When a patient receives care from such a provider, they may receive a bill that could cripple them financially. If ever a cause were ripe for bipartisan legislation, this is one.

Insurers cover less of the bill from an out-of-network provider, or may cover none at all. When a patient receives care from such a provider, they may receive a bill that could cripple them financially. If ever a cause were ripe for bipartisan legislation, this is one.

In fact, there have been a number of proposals at the state and federal levels to address this concern. As of January, 2020, twenty-eight states have put in place some consumer protections against surprise medical billing; unfortunately, Michigan is not among them. In order to fully protect consumers, federal legislation is needed, and there are a number of bills aimed at resolving the problem of balance billing. These include S. 1895, which has been approved by the Senate Committee on Health, Education, Labor, and Pensions (HELP); H.R. 2328, from the House Energy and Commerce Committee (E&C); a compromise bill referred to as HELP/E&C, which resolved differences between S. 1895 and H.R. 2838; and a proposal from the House Ways & Means Committee (W&M).

How Will Legislation Solve the Problem?

The fact that there is bipartisan agreement about fixing the problem of surprise medical billing is encouraging. But the devil, as they say, is in the details. Of the four plans that have been floated, S. 1895, H.R. 2328, and HELP/E&C have the most similarities (unsurprising, as HELP/E&C was formulated as a compromise between the other two). These three proposals would base payment for out-of-network care on the median amounts a health plan pays to its in-network care providers. The three plans would apply a ban on balance billing to providers.

There is some variation among the plans as to how disputes would be resolved, and how the law would be enforced; most of the plans involve arbitration for the former issue, and civil money penalties for the latter.

Both Democrats and Republicans seem committed to resolving the problem of surprise medical billing. But there is one group that is concerned about the outcome of potential legislation: doctors. Making sure that patients aren’t crushed by surprise medical bills boils down, in many cases, to a conflict between medical care providers and insurers over how rates will be set and payments reimbursed.

Physicians, understandably, say that they want to be paid a fair amount for their services. They do essential, life-saving work, and have often gone into deep debt in order to become doctors. As lawmakers endure pressure to protect their constituents from outrageous medical bills, doctors are pushing back to protect their compensation. A number of health care provider organizations have put significant resources into lobbying for a result they say will be fair to doctors. This includes directing funds to candidates they hope will help their cause ahead of the 2020 elections.

As of this writing, no federal law has been passed to protect patients from the financial effects of surprise medical billing. Stay tuned to see if any of the proposals for a federal bill to prevent surprise medical billing become law.

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