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March 06, 2020 02:13 PM

Reimbursement benchmarks will exacerbate surprise billing problem

Dr. William Jaquis
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    Dr. William Jaquis is president of the American College of Emergency Physicians.

    For more than two years, emergency physicians have consistently supported federal legislation that protects patients from surprise bills without compromising access to care.

    However, setting a reimbursement benchmark based solely on what insurance companies choose to pay only serves their interests, not patients'. Insurance companies already have a long history of eroding or even outright denying coverage of emergency care. Rewarding them for that effort with such a benchmark will only enable them to drive their rates lower, resulting in even narrower networks and even more canceled contracts with higher quality physician groups.

    Narrow networks and high-deductible health plans are the true root causes of surprise bills, and an approach that favors rate setting or benchmarking, as several proposals passed by Congressional committees do, exacerbates rather than solves the problem.

    Giving more leverage to insurance companies would compound cost and access hurdles for millions of patients and factor directly into hospital closures that hit rural areas particularly hard. Thirty-one states have seen a total of 119 rural hospitals close in the last 10 years and many of those facilities cite reimbursement issues among their top challenges.

    Modern Healthcare is right to raise concerns in a recent editorial that benchmarking will diminish incentives for fair negotiations. Consider California, a state that enacted a benchmark for state-regulated insurance plans. A survey revealed that 88% of physicians said the California law allowed insurers to shrink physician networks, decreasing patient access to in-network physicians in their community.

    In direct contrast, the state of New York enacted an independent dispute resolution (IDR) mechanism rather than a benchmark to settle out-of-network payment disputes, and has not only slashed surprise bills, but has also saved consumers $400 million in four years without impacting costs or raising premiums, according to the New York State Department of Financial Services.

    A workable IDR process at the federal level should not include a qualifying threshold, which some congressional proposals incorporate. Despite the life-saving treatment emergency physicians provide, the median in-network rates for even our highest-level services fall below $750 in all but the highest-cost areas in only a few states. The reality is that instituting such a threshold would put IDR out of reach for the vast majority of emergency services, leaving us with a de facto benchmarking approach at the federal level with an impact that would be very similar to what has happened in California.

    With the recent introduction of the thoughtful approach from the House Ways and Means Committee, Congress has an opportunity to protect patients from surprise bills without endangering people's access to care. With support from emergency physicians, hospitals and patient advocacy groups, H.R. 5826, the "Consumer Protection Against Surprise Medical Bills Act," presents our best chance to solve surprise bills in a way that ensures access to emergency care for patients can be maintained in the long term, encouraging fair negotiations and without favoring physicians or insurers.

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