"While the medical profession struggles most with administrative barriers to patient-centered care, cost transparency is at the root of the general population's distress," writes Ross E. Weber.
Based on a partnership with Urology Times, articles from the American Association of Clinical Urologists (AACU) provide updates on legislative processes and issues affecting urologists. We welcome your comments and suggestions. Contact the AACU government affairs office at 847-517-1050 or email@example.com for more information.
Even as calls to repeal the Affordable Care Act quieted in 2019, health care remains the issue Americans list as their greatest concern. Physicians would likely say the very same thing, but while the medical profession struggles most with administrative barriers to patient-centered care, cost transparency is at the root of the general population's distress. Most of these troubles stem from the fact that from 2013 to 2016, while the percentage of uninsured Americans fell from 14.8% to 8.6% of the under-65 population, health insurers deployed new products that limit the number of network providers and increase patients' out-of-pocket costs.
As a result, barely a week goes by without a congressional hearing on drug pricing or a state legislature considering how to shed light on the true cost of health care services. Patients frequently blame providers, while providers point to payers. "Fixing" these high-profile problems requires a careful and nuanced approach-not a strong suit of the people and institutions responsible for making and enforcing the law.
One such issue is the payment of services by out-of-network physicians that are provided at in-network facilities. This most often occurs in an emergency department. A study published in the New England Journal of Medicine (2016; 375:1915-8) reported 22% of emergency room visits included care from an out-of-network provider. Urologists' understanding that these charges are not uncommon in elective inpatient admissions is backed up by a 2017 analysis that found 9% of scheduled stays at in-network hospitals led to an unexpected bill from an ancillary physician (Health Affairs 2017; 36:177-81).
Addressing so-called "surprise billing" is made even more complex because it requires action at the state and federal levels. States regulate commercial health insurance plans, but 61% of privately insured employees are in self-insured employer plans, which are administered by the federal government.
The well is further poisoned by the insurance industry's deceitful declarations. In a statement to Congress, America’s Health Insurance Plans, the trade group representing payers said, "The problem of surprise medical bills tends to be concentrated among certain medical specialties where providers are likely to charge substantially more than their peers in other specialties and not accept private insurance." It’s widely understood that nobody wants to saddle patients with unexpected bills, particularly when the services are provided during an emergency.
Surveying this landscape, AACU President Mark Edney, MD, MBA, pointed out, "Arriving at solutions that are acceptable to patients, providers, and payers is complex from an advocacy perspective because it requires advanced negotiating skills.
"We must understand and appreciate the positions of the other parties at the table - patients and payers," Dr. Edney said. "Threading the needle to get to a solution that is perceived as fair by all is a challenge but ultimately doable as long as we all continue to negotiate from an informed position and in good faith."
The most complicated questions within surprise billing that policymakers must face are how to determine a fair reimbursement rate for out-of-network services and whether to initiate an independent arbitration process if the payer or provider disputes that standard charge. There is cause for physicians to be concerned. The three most common reimbursement benchmarks-Medicare rates, billed charges, and contracted rates-fail to truly cover the cost of providing a service. What's more, in state after state and in the legislation progressing through Congress, insurers have resisted the inclusion of a dispute resolution process.
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On June 26, a bipartisan majority of the Senate Health, Education, Labor and Pensions (HELP) Committee approved the Lower Health Care Costs Act (S.1895) by a vote of 20-3. The current bill is opposed by most organizations representing physicians because it ties out-of-network payments to average in-network rates and does not include an independent payment arbitration process. The latter provision was strongly supported by Sen. Bill Cassidy, MD (R-LA) and a handful of colleagues, but the Trump administration has opposed arbitration. The sponsor of the legislation expects extensive debate and amendments when it's considered by the full Senate in mid-to-late July.
Separately, Congressman Raul Ruiz, MD (D-CA) introduced bipartisan surprise billing legislation in the House of Representatives that is based on a New York law that contributed to a dramatic decline in the number of consumer complaints about balance bills. That model imposes "final-offer" arbitration in which both the payer and provider submit offers to an independent arbitrator who selects one or the other. The logic behind this approach, according to FireceHealthcare.com, is that the threat of the arbitrator choosing the other party's offer incentivizes each party to submit a reasonable offer or settle before getting to that point.
States offer solutions
Similar arbitration solutions have been pursued by other states including Illinois, New Hampshire, and New Jersey. Indeed, states are playing a leading role in addressing unexpected out-of-network billing. Four additional states have taken action this year to prohibit balance bills, institute arbitration processes, and promote pricing transparency among providers, payers, and patients "to avoid situations that lead to balance bills," according to the National Academy for State Health Policy.
In Washington, for example, long-contesting parties came together to support an independent database to set out-of-network prices, followed by a procedure of binding arbitration between a provider and a carrier. "If you don't like [the reimbursement]," said Insurance Commissioner Mike Kreidler, "challenge it and go to binding arbitration… It's at your own peril."
In Texas, the lead sponsor of a new law asserted, "We wanted to try to take the patients out of the middle of it because really it's not their fight." Instead, state officials will oversee arbitration between insurance companies and medical providers to negotiate a payment. This expands a law they already had on the books concerning emergency services.
Generally, when it comes to surprise billing, providers urge policymakers to consider binding arbitration to determine a fair payment. Payers say that will increase costs and slow the claims process and instead favor an approach based on rates defined as what similar providers accept as payment for their services. Policy and political questions abound, including the notion of Paul Clement, a former Republican solicitor general who said proposals to cap out-of-network rates would violate the takings clause of the Fifth Amendment.
The AACU, for one, will be keeping close tabs on all of these issues, promoting solutions based on principles outlined in a Feb. 7 letter to the House Committee on Ways and Means which concludes, "The problem of unanticipated out-of-network bills is complex, and requires a balanced approach to resolve. In addition to providing strong patient protections, we believe the principles set forth above would improve transparency, promote access to appropriate medical care, and avoid creating disincentives for insurers and health care providers to negotiate network participation contracts in good faith."