How Can You Stop Surprise Bills? Enforce Network Adequacy Rules

Something remarkable happened when patients in Texas faced the risk of paying higher medical bills recently.

The Texas Department of Insurance fined Humana Inc. $700,000 for putting consumers at risk of surprise bills from out-of-network physicians. “Texas has strict network adequacy standards,” said Insurance Commissioner Kent Sullivan, “and we’re going to hold insurers accountable for meeting them.”

What may have been an unusual enforcement action should become a best practice.

For far too long, insurance regulators across the country have been far too lax when providing oversight to a marketplace where 185 million Americans obtain medical coverage. Insurance companies have narrowed networks of providers and shifted health care costs to the patients they’re supposed to cover. Regulators, at the same time, have done little but approve insurance products with insufficient networks of providers.

Strict network adequacy standards are key to protecting patients from surprise bills. It’s up to regulators, like Mr. Sullivan, whom we applaud for his actions, to enforce requirements ensuring sufficient numbers of in-network physicians such as pathologists practice at in-network hospitals and medical centers.

However, regulators are reluctant to enforce network adequacy standards. A 2014 study funded by the Robert Wood Johnson Foundation found just 14 percent of regulators verified whether insurance plans have contracted with in-network, facility-based radiologists, pathologists, anesthesiologists, and emergency physicians. That percentage is not too surprising given that at the state level there are few state laws or regulations to mandate a significant level of regulatory scrutiny of health plans.

The lack of enforcement is a regrettable reality for patients receiving surprise medical bills. Physicians and patients have called on regulators to be more active and for state legislators to adopt strict and enforceable network adequacy standards. Three physician associations and 10 patient advocacy groups issued a declaration stating patients should have access to in-network physicians at in-network hospitals.

And when health insurance plans fail to contract with hospital- or facility-based physicians, patients should not be expected to pay more than what they’d normally pay for care provided by an in-network physician. These network adequacy requirements would force insurers to maintain sufficient networks and cut down on out-of-network bills.

Regulators and legislators have been reluctant to adopt and enforce network adequacy standards due to pressure from insurers. For instance, in 2015 the National Association of Insurance Commissioners rejected requirements to review insurance plans for hospital-based physician network adequacy. More recently, health plan accrediting agencies – the National Committee for Quality Assurance and URAC – rejected calls by pathologists and radiologists to remedy deficiencies in their health plan network adequacy standards. These accrediting agencies, which issue the standards for routine state oversight of health plans, have said they’d continue to maintain the status quo despite a rise in narrow networks and national outcry over surprise medical bills.

While some insurance regulators and accrediting agencies demur, debate about legislating out-of-network bills and network adequacy will continue in state houses and in Washington, DC. Pathologists and other physicians don’t want patients to receive surprise medical bills. Hospitals agree with physicians and patients and have urged greater oversight of health plan provider networks and the role health plans play in helping patients access in-network care.

In its principles for addressing the surprise bills, the American Hospital Association said it wants patients to have access to user-friendly provider network information, including accurate listings for hospital-based physicians in health plan directories. “Federal and state regulators should ensure both the adequacy of health plan provider networks and the accuracy of provider directories,” the AHA stated.

Physicians, hospitals and patients clearly see the need for greater network adequacy requirements and enforcement. And practicing pathologists like myself will continue to urge lawmakers to fight for patients and ensure regulators enforce network adequacy standards.

Dr. R. Bruce Williams is president of the College of American Pathologists.

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