April 02, 2020
It is increasingly common for patients to receive “surprise bills,” bills from out-of-network (OON) physicians and other providers even though they seek care at in-network facilities or for emergency care. According to a study published in JAMA (Chhabra et al., February 2020), over 20% of patients receiving care for 1 of seven common procedures at in-network hospitals received an out-of-network bill. Most concerning, facility-based physicians (emergency room physicians, anesthesiologists, surgical assistants, radiologists, and pathologists), providers generally not chosen by patients but by hospitals, are the most common sources of surprise bills. As a result, Congress has considered enacting legislation to ban balance billing of patients in these situations and mandate a process for settling provider payments that may include a benchmark local rate based on in-network prices and potentially arbitration. The Administration has conditioned aid to hospitals for pandemic relief with the requirement that they not balance bill patients for care related to COVID-19. More recently, the President issued an executive order requiring the HHS Secretary to act if Congress does not enact a legislative solution to surprise billing by the end of 2020.
Congress and the Administration should:
- Prohibit balance billing by emergency providers and OON providers at in-network facilities;
- Require hospitals and other providers to adequately inform patients and consumers of potential health care charges, including OON charges, and to obtain informed consent for any non-emergency service by OON providers at in-network facilities;
- Assure that solutions to surprise billing will lower, not increase, premiums and costs for consumers and group health plans;
- Not incentivize providers to reject network participation;
- Avoid mandated arbitration, which would raise costs and undermine network participation;
- Ensure that value-based payment arrangements, which depend on provider participation in networks, are not hindered by unintended consequences of the law; and
- Maintain and protect self-insured plans’ preemption from state laws relating to surprise billing.
Why It Matters
- As provider consolidation increases, surprise billing is likely to be an increasing occurrence without legislative or Administration action. This will raise costs for employees and employers and undermine the value of in-network status, and the financial protections of seeking care in in-network facilities.
- The Congressional Budget Office estimates the savings to the private sector of a legislative solution will range between $18-25 billion over ten years depending on the solution enacted.
- As we move away from fee-for-service toward value based care and more global payment, peeling off these services from the bundle of emergency care or other services works in the opposite direction, reinforces fragmentation, and makes it difficult to manage the costs of care.