The Pennsylvania Insurance Department will hold an October hearing in an effort to eliminate or mitigate the impact of unexpected out-of-network bills on consumers.
Pennsylvania is not alone in investigating and regulating surprise medical bills, and more states may follow suit as a national insurance group drafts a law to help states tackle the problem.
Pennsylvania Insurance Commissioner Teresa Miller said the public hearing will take place Oct. 1, and balance billing will be the topic de jour. Balance billing occurs when physicians bill patients for services that the health insurance company will not cover, or only partially cover. Although patients receive emergency or routine care at in-network hospitals and facilities, the physicians may not contract with the insurer and only accept out-of-network rates.
Patients have increasingly filed complaints with state insurance departments, including Pennsylvania, saying they are shocked to receive high out-of-network bills when there was no way they could have known the providers were out-of-network. Narrow networks and high-deductible health plans that put more cost-sharing on patients have fueled the trend.
“It is critical that we address this issue in order to protect consumers from getting an unexpected bill from a provider,” Miller said in a news release. “When someone faces a health issue such as surgery, treatment in an emergency room, or even a routine procedure, they should be free from worrying about facing financial hardship once they return home.”
Experts agree that hospitals, doctors and insurers want to remove patients from the process. But finding an amount that seems fair to the doctors submitting the bill and the insurance companies paying it has been the sticking point. Physicians blame insurers for not paying enough. Insurers argue physicians expect excessive rates.
The Affordable Care Act did not outlaw balance billing, although it did add some protections for emergency health coverage. Several states, such as California and New York, have attempted to quell the fights through regulation. Some prohibit balance billing altogether. Pennsylvania bans the practice from emergency services, according to a Kaiser Family Foundation analysis of balance billing laws.
States that are publicly examining surprise medical bills, such as Pennsylvania and New Jersey, plan to resolve the issue. “It feels like they are the states that have done something and are trying to tweak or fill in some of the gaps in the protections they have,” said Jack Hoadley, a health policy researcher at Georgetown University who has studied balance billing.
More states could potentially address the problem, and at least one other unnamed state will hold a hearing soon like Pennsylvania, Hoadley said. The National Association of Insurance Commissioners also is finishing revisions of its draft model law that addresses provider access and adequacy in health plans. Final comments are due Sept. 22.
The NAIC model calls out balance billing and out-of-network providers who practice in participating facilities. The draft suggests all in-network hospitals should notify patients getting nonemergency care that out-of-network physicians could potentially intervene during treatment. Further, all bills should outline that patients are responsible for their usual cost-sharing amounts, but out-of-network amounts could be sent to their health insurer to go through a remediation process. The NAIC's draft has several similarities to New York's recent law which established an independent review process to resolve payment disputes.
Balance billing has not been felt equally across all states. For instance, Hoadley and his colleagues found that balance billing rarely happened in New Mexico because “the state has relatively few providers, and so health plans tend to have contracts with most providers in the state.”
“How all those market dynamics play out makes a big difference,” Hoadley said.