Provider and health plan advocates appear far from agreeing on the best legislative solution to the issue, say industry watchers.
Feb. 4—The lead federal healthcare official pledged Monday to stop surprise medical bills—one of the few healthcare issues garnering bipartisan support in Congress.
Alex Azar, secretary of the U.S. Department of Health and Human Services, told attendees at the AcademyHealth annual meeting in Washington, D.C., that the administration has pledged “ending surprise bills.”
Azar’s promise followed a January roundtable—to which members of the healthcare industry were not invited—for select patients with President Donald Trump at the White House. Azar recounted some of the billing stories patients shared at the meeting.
“The president, like so many Americans who’ve heard these stories or had such an experience themselves, was shocked and outraged,” Azar said. “He’s committed to making fair, accurate, and transparent prices a key part of his healthcare agenda.”
However, industry watchers said the issue is most likely to be resolved by Congress because regulatory approaches would be unlikely to provide comprehensive solutions. The issue already has drawn unusual bipartisan pledges of action in Congress, and the administration’s commitment could give the effort greater momentum.
In the last Congress, legislative proposals included a bipartisan draft measure by Sen. Bill Cassidy (R-La.), a Democratic bill by Sen. Maggie Hassan (D-N.H.), and House versions by Reps. Lloyd Doggett (D-Texas) and Michelle Lujan Grisham (D-N.M.). The approaches of the bills vary in fundamental ways, and legislators are working on updated versions for the current Congress.
“Given that the issue of surprise bills is one of the few things that anyone in Congress can agree upon as being a bad thing that needs to stop, this to me is a bipartisan issue, and I would expect that both sides are probably looking to do something productive and consumer-centric,” said Chad Mulvany, FHFMA, director of healthcare finance policy, perspectives and analysis, for HFMA.
It remains unclear what specific approach Congress will use to protect consumers from unexpected healthcare bills, and providers and payers have urged starkly different federal requirements. However, a meeting of congressional staff last week with various industry representatives indicates legislators will advance bills to address the issue in the coming months, said Wade Symons, practice leader at the Regulatory Resource Group of Mercer.
Differences in Approach
The American Hospital Association (AHA) and the Federation of American Hospitals (FAH) wrote a letter to members of Congress in December, stating that any federal approach must prohibit balance billing and limit patients’ cost-sharing to an in-network amount.
“We appreciate that this is a high priority issue for Congress, as it is for us, and we intend to provide more specific feedback to policymakers early in the new Congress,” wrote Richard Pollack, president and CEO of AHA, and Charles Kahn, president and CEO of FAH.
For its part, America’s Health Insurance Plans (AHIP) has urged hospitals and other inpatient facilities to engage in “good-faith efforts” to ensure that their hospital-based physicians contract with the same health insurance providers as the hospital.
“This would go a long way to reduce and prevent consumers from receiving a big surprise balance bill,” AHIP wrote on its website.
Anders Gilberg, senior vice president, government affairs for the Medical Group Management Association (MGMA), raised concerns about any federal approach that would “force a physician into a contract with a health plan that has none of the protections of a contract” yet requires them to accept contracted rates.
“We could see this an easy way for health plans to manipulate the market to not have to contract with emergency physicians or anesthesiologists or radiologists; that has to be carefully balanced as well,” Gilberg said in an interview.
Even more concerning would be any proposal to force out-of-network physicians to accept some share of Medicare rates, which are typically far lower than commercial plan rates, Gilberg said.
AHIP recently launched a coalition with other insurer advocates, consumer groups, and business advocates committed to advancing policies that address surprise bills.
Physician advocates have begun to offer specific approaches. In January, the American College of Emergency Physicians (ACEP) released a framework of proposed approaches that included:
- Prohibiting balance billing for out-of-network emergency care
- Requiring insurers to pay any coinsurance, copay, and deductible for emergency care to the provider
- Limiting patients’ out-of-pocket costs to in-network amounts
- Requiring insurers to more clearly convey beneficiary plan details
- Creating an arbitration process to settle network issues
A Possible Model
An increasing number of states have enacted laws focused on unexpected medical bills. As of December 2018, 25 states have laws offering some balance-billing protection to their residents, and nine of them offer “comprehensive protections,” according to a Commonwealth Fund analysis.
“I think something is going to happen [nationally], and I would look for it to look something like arbitration, like what New York is doing,” Mulvany said.
New York’s law went into effect in 2015 and includes:
- Holding patients harmless for emergency services
- Requiring disclosures to new patients by hospitals, health plans, physicians, and other health care professionals
- Creating a dispute resolution process for surprise bills and emergency services
- Extending network adequacy requirements to all comprehensive health plans
- Creating new out-of-network coverage requirements
- Definingusual and customary cost (the rate a health plan agrees to pay for out-of-network care) as the 80th percentile of all charges for a particular specialty provided in the same geographic area
- Creating out-of-network referral denials and expanding patient appeal rights
“We love it because hospitals are not in the crossfire anymore,” said Jeffrey Gold, JD, senior vice president for the Healthcare Association of New York State (HANYS). “It has been very helpful in dealing with the issue by keeping patients out of the middle.”
Hospitals have been surprised by the unexpectedly small number of billing disputes between health plans and providers that have gone to the arbitration process under the law, Gold said in an interview.
New York’s independent medical claims database, which is used to define usual and customary costsfor local specialists, also drew praise from Gilberg as being “considerably more preferable than any kind of benchmark off of Medicare.”
In the meantime, the bipartisan Cassidy approach, which would bar balance billing and require insurers to pay clinicians 125 percent of usual and customary charges for out-of-network care, appears to remain viable in Congress, Symons said in an interview.
“That seems to be the type of thing that they are looking at,” Symons said.
Neither health plans or providers are likely to readily support that approach because it would pay providers less than they now can collect and require plan to cover a cost they do not now cover.
“You’re going to have to look at where is the middle ground, and I’m not sure that we’ve gotten there yet,” Symons said.
Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare