The need to address surprise medical bills is one of the few issues upon which there is bipartisan consensus in Congress, especially as it relates to rising health care costs. However, as with most legislative issues, the devil is in the details, and Congress may be on the verge of unintentionally making the problem worse.
Surprise medical billing happens when patients seek care at a hospital thinking the facility is in-network for their health insurance plan, only to find out weeks later when the bill arrives that the various doctors who treated them were deemed to be out-of-network by the insurance company. The cost of these physicians can run in the thousands of dollars, as emergency doctors, anesthesiologists, surgeons, OB-GYNs and others involved in the patient’s care can be labeled by the insurance company as being outside of its contract network. To make matters worse, the most egregious cases often occur as part of an unplanned medical emergency, when patients are unable to make decisions about their own care.
Thankfully, Congress is finally making progress toward addressing this issue. Unfortunately, one of the potential “solutions” being debated would actually make things worse for patients, especially those who receive care at America’s “safety net” hospitals.
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Currently being considered in the Senate, S. 1895 — the Lower Health Care Costs Act — would institute a plan drafted by insurance companies to take them off the hook for the cost of surprise medical bills. And unfortunately, the House Energy and Commerce Committee is about to follow their bad example at a markup today.
Known as “benchmarking,” the proposal is a form of federal rate-setting that would result in doctors being paid one mandated reimbursement rate for care, without regard to the cost of providing that care or regional variations in medical pricing. This would mean many doctors — particularly those working in hospitals that operate in rural and underserved communities — would end up holding the bag as insurance companies leverage the set rates to lowball physicians and tie reimbursement to the lowest levels within their networks, regardless of quality or procedural differences. This race to the bottom would result in costs being further shifted to local hospitals and emergency departments, many of which are already struggling to survive.
While this would impact all providers, the hardest hit will be the health care facilities that treat a disproportionately higher rate of uninsured, Medicaid and Medicare patients, limiting access to care for some of our nation’s most vulnerable patients. In a state like Kentucky, where one-third of the population receives care through Medicaid, the consequences could be devastating.
According to a recent Washington Post piece, trips to the emergency room in rural hospitals have increased by greater than 60 percent over the past decade. These are the hospitals that are most at risk of folding in the midst of doctor shortages and historically low operating margins.
Emergency departments are required by law to provide treatment irrespective of the patient’s ability to pay, which already contributes to lower reimbursements for these safety net hospitals and health care centers. Underpaying doctors even further by using federal benchmarking to lowball payment rates will only compound this problem.
Rather than taking this unwise approach, Congress should look to a proven mechanism that will protect patients from surprise medical bills without jeopardizing access to or quality of care for America’s at-risk and undeserved patients. The approach that is currently working in over a dozen states and counting is called — independent dispute resolution.
The magic behind IDR is that it incentivizes both sides — health care providers and insurers — to negotiate fairly, openly and transparently. Each party would bring their most reasonable offer to the table, where an independent mediator would work to establish the fairest possible rate.
In the meantime, physicians would be paid an interim reimbursement, helping keep hospitals financially solvent and protecting hospitals in underserved communities from financial losses that would impact their ability to effectively treat their patients. The IDR has been shown at the state level to ensure a reasonable negotiating balance between insurance companies and health care providers, rather than giving insurers unilateral control as would be the case with benchmarking. Equally important to health care consumers, IDR removes them completely from the negotiation between plans and doctors, and through the online portal, the whole process gets resolved in 30 days or less.
Congress is to be commended for approaching this critical issue in a bipartisan way. But in doing so, let’s be sure not to reform the system in a way that does more harm than good. Congress must not use a benchmarking methodology that would further threaten patient access to care, especially in America’s most underserved communities.
Congress should scrap the benchmarking proposal and instead move forward with the tried-and-true IDR process that will protect patients while preserving access to quality and affordable health care. Let’s not miss this opportunity to pass a bipartisan bill that will make a real difference for all Americans.
Jason Altmire served in the U.S. House of Representatives from 2007 to 2013, and he has been a senior executive for large companies in both the hospital and health insurance industries, and currently serves as a strategic partner for Integrated Strategy Group.
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