State and federal laws that feature dispute resolution processes involving health plans and providers are needed to protect patients from surprise out-of-network medical bills, according to a paper from the Brookings Institution (PDF).
The paper released Thursday suggests holding patients harmless in surprise medical bill situations but not putting the financial burden entirely on either plans or providers. One approach would be a limited form of rate regulation such as a prescribed fee schedule or a rate cap for out-of-network providers, similar to legislation recently enacted in California.
The authors said this would best be combined with an efficient form of dispute resolution outside the court system that involves providers and health plans, including self-insured plans.
Mark Hall, a senior fellow at the Brookings Institution and one of the authors of the paper, said the issue is complex and will require a complex public policy solution. “There isn't a magic bullet,” he said. “We can't simply say: 'Health plan, fix it.'”
Betsy Imholz, special project director at Consumers Union, said the issue has traction in Congress and she hopes to see legislation addressing it next year. Policy action is needed because “the market incentives are not there for the providers and payers to fix this.”
The issue of surprise out-of-network medical bills has gained growing attention from state and federal policymakers as health plans increasingly move to limited provider networks. Surprise medical bills occur when patients go to an in-network facility and unwittingly receive services from an out-of-network provider, such as an emergency physician, assistant surgeon, or anesthesiologist. A recent national survey showed that 20% of adults have at some time received a surprise medical bill, which can total hundreds or thousands of dollars.
Several states including California, Florida, New York, and Connecticut have passed bipartisan legislation to shield patients from surprise bills and establish a process for health plans and out-of-network providers to work out payment issues.
But these state laws don't apply to self-insured employer plans, which are protected from state rules by the federal ERISA law. Federal legislation would be needed to address surprise bills for the millions of patients in self-insured plans.
One of the toughest political issues is setting rates for out-of-network care that both providers and plans will accept. Some medical groups, including the American Medical Association and emergency medicine, anesthesiology, and radiology groups, have opposed such legislation, arguing that the problem is that insurers aren't offering doctors adequate rates to join their networks.
The CMS has issued a proposed rule suggesting that health plans count enrollee cost sharing for out-of-network care received in an in-network facility toward the enrollee's annual deductible.
The Brookings authors laid out six principles for resolving surprise medical bill issues, urging a comprehensive approach that considers emergency situations as well as other common hospital scenarios.
They said federal action is needed in addition to state action. Patients need more than just improved information and should be held harmless when a surprise cannot be avoided. Hospitals should increase physician participation in networks. And they argued that lawmakers should determine how much health plans should pay out-of-network providers delivering care in in-network facilities.
Jeffrey Plagenhoef, president-elect of the American Society of Anesthesiologists, said the problem involves gaps in insurance coverage. Physicians want to participate in plan networks but insurers sometimes do not make that viable.
“It's not that we won't come to the table to negotiate,” he said. “We're not being allowed at the insurance-controlled table in many cases.”
