“Because we can.” That was the statement from an executive leader at one of the nation’s largest health insurers as he explained why his company was arbitrarily reducing its reimbursement for emergency physician services by more than 50% and preparing to terminate in-network agreements across the U.S.
He was justifying a notice of termination delivered in anticipation of a new federal law that aims to end surprise medical billing but also gives insurers major incentives to unilaterally drive down reimbursement rates.
Therein lies the biggest problem with proposed surprise medical billing legislation that allows insurers to unilaterally determine their out-of-network reimbursement by benchmarking it to their median in-network rate, which the insurer controls. These proposals, known as rate-setting, give insurers sole power to terminate contracts with hospital-based physicians and dictate new payment rates. That isn’t just a bad deal for doctors—it will also make it harder for patients to access potentially life-saving services across the country.
Unfortunately, insurers have been allowed to dominate this debate. On Capitol Hill, they have framed the fight to end surprise billing as a choice between their preferred, financially beneficial outcome and taking no action at all. This is, of course, a falsely constructed choice and it comes with serious consequences. In addition to driving down reimbursement to unsustainable levels, increasing costs for patients, and potentially forcing hospitals and doctors out of business, the insurance industry-backed plan threatens the social safety net that is at the core of emergency medicine.
TeamHealth doctors treat more than 12% of the country’s emergency department patients. We operate at a net margin of less than 1%, and 75% of our patient encounters are unprofitable and reimbursed by Medicare, Medicaid or uninsured patients at less than our cost per encounter (or not paid for at all).
This social safety net is a fragile system that must be supported by both doctors and the commercial insurance industry. Any reduction in emergency medicine reimbursement will force clinician pay cuts and result in hospital subsidies, but the 20% reduction in payments forecast to result from proposed rate-setting legislation would threaten the sustainability of the entire emergency medicine system.
TeamHealth maintains a strict discipline of keeping patients out of the middle of reimbursement disputes with managed-care organizations. When we are arbitrarily underpaid by commercial insurance carriers, we will not balance-bill our patient, even though insurers openly invite us to pass this cost on to their members. We refuse to do so and have instead initiated litigation across the country to challenge these arbitrary underpayments.
As an industry, we have never faced such a threat to the future of emergency medicine. The insurance industry recognizes the lever it is being given. One insurance company’s executive leader has warned that, because of this provision, emergency medicine providers should expect “a rush to push physicians out-of-network” and to expect “rapid rate reductions.”
Ending surprise medical billing is good policy, but Congress must also protect physicians and patients from arbitrary insurance underpayments. TeamHealth and other provider groups have actively supported proposals in both the House and Senate that would end surprise billing and remove patients from the middle of disputes without giving outsized leverage to insurers. This is accomplished by establishing an independent dispute resolution system in which an arbitrator would balance negotiations between insurers and providers rather than giving insurance companies the ability to set their own rates.
In America’s emergency departments, we’re providing lifesaving healthcare 24 hours per day, seven days per week, 365 days per year. We primarily treat heart attacks, strokes, trauma, auto accidents and other serious and even life-threatening conditions. About 1 in 5 Americans visit an ED every year. It’s hard to imagine a scenario where that option might not be available to all—especially when we’ve all invested hard-earned monthly premiums to ensure that it is.