Patients usually do everything right. They choose an emergency department, a hospital, or an obstetrician in their health plan’s network. Yet they often receive care at some point from an emergency room doctor, anesthesiologist, or another clinician who is an “out of network” provider. Weeks later, a bill arrives asking for the difference between what the health plan covers and the doctor’s actual fee. Patients rightfully feel blindsided and infuriated.
A bipartisan group of senators recently introduced a measure called the Protecting Patients from Surprise Medical Bills Act. These efforts aim to limit how much a patient must pay out-of-network doctors, specify how much the insurer has to pay out-of-network doctors or both. Such efforts will certainly help.
Here’s an idea:
Combine the payments to the physicians and the payment for the rest of the care into a single payment. There is a need to help eliminate surprise bills by passing legislation mandating that Medicare combine physician payments with other payments. A single payment for care will decrease paperwork and increase price transparency. Equally important, it will protect patients from the often catastrophic financial damage of surprise bills. It is the right thing to do for more reasons than one.
The 6-point proposal
- Prohibit balance billing by barring providers from asking patients for payments for out-of-network emergency care;
- Take patients out of insurer-provider billing disputes by requiring insurers to pay coinsurance, copayment, and deductible directly to the provider and collect any additional payments from the patient;
- Ensure patients do not pay more out-of-pocket for out-of-network emergency care than they would pay for in-network care;
- It requires insurers to convey plan details for members clearly;
- It requires insurers to convey patients’ rights related to emergency care; and
- We need to establish an arbitration process to settle network issues to exclude patients from billing disputes between insurers and providers.
How to work it out?
- Protecting consumers from unexpected out-of-pocket expenses while requiring insurers to pay a high payment for involuntary out-of-network services won’t reduce prices. It will simply split the bill among all consumers in the form of higher premiums.
- On the flip side, establishing a lower payment standard may have cost-containing effects by reducing both direct payments for out-of-network services and physicians’ leverage in contracted rate negotiations.
- These proposed solutions to surprise bills share a common mindset: They take providers’ out-of-network status as a given and do not attempt to bring them in-network. But network status is critical. In-network providers cannot engage in surprise billing.
- Moving providers from out-of-network to in-network status could solve the surprise billing crisis without requiring policymakers to set benchmarks, arbitrate or otherwise stroll into the minefield of provider payment rates.
- To bring more providers in-network, policymakers could make failure to agree on network payment rates less attractive for both providers and insurers.
Changes to out-of-network practices could have a dynamic effect on contracting between insurers and physicians. It is in consumers’ best interests to let those effects err on the side of cost containment. If the spirit of the policy is consumer protection, then look to Medicare and average contracted rates as benchmarks for physician price.