Earlier this month, a bipartisan group of Senators announced draft legislation that would address the issue of surprise bills for patients seen by out-of-network medical providers. According to the bill’s sponsors, Sens. Bill Cassidy, MD, (R-La.) Michael Bennet (D-Colo.), Chuck Grassley (R-Iowa), Tom Carper (D-Del.), Todd Young (R-Ind.) and Claire McCaskill (D-Mo.), “The draft bill is intended to jumpstart discussions in Congress about how to best stop the use of balanced billing to charge patients for emergency treatment or treatment provided by an out-of-network provider at an in-network facility.”
The bill addresses three main issues:
- Emergency services provided by an out-of-network provider in an out-of-network facility: The draft bill would ensure that a patient is only required to pay the cost-sharing amount required by their health plan, and a provider may not bill the patient for an additional payment. The excess amount above the cost-sharing amount will be paid by the patient’s health plan in accordance with an applicable state law or an amount based on the greater of the median in-network amount negotiated by health plans and health insurance issuers or 125 percent of the average allowed amount for the service provided by a provider in the same or similar specialty and provided in the same geographical area.
- Non-Emergency services following an emergency service from an out-of-network facility: The draft bill would ensure that if a patient receives an emergency service from an out-of-network healthcare provider or facility and requires additional services after being stabilized, the healthcare facility or hospital will notify the patient, or their designee, that they may be required to pay higher cost-sharing than if they received an in-network service and give the patient an option to transfer to an in-network facility. The patient, or their designee, would also be required to sign a written acknowledgment of that notification.
- Non-Emergency services performed by an out-of-network provider at an in-network facility: The draft bill would ensure that a health plan or out-of-network provider cannot bill a patient beyond their in-network cost-sharing in the case of a non-emergency service that is provided by an out-of-network provider in an in-network facility. The excess amount above the cost-sharing amount will be paid by the patient’s health plan in accordance with an applicable state law or an amount based on the greater of the median in-network amount negotiated by health plans and health insurance issuers or 125 percent of the average allowed amount for the service provided by a provider in the same or similar specialty and provided in the same geographical area.
“Over the last several months, we have evaluated input from health care experts and stakeholders to determine what steps can be taken to lower health care costs for patients. This evaluation revealed that surprise medical billing is an issue we can address right away to have an immediate impact on health care costs,” said Senator Young. “Surprise medical billing occurs when a patient receives an unexpected medical bill from a doctor that is unknowingly out-of-network. This is just the first of several issues that the bipartisan working group will tackle as a result of our review, and I believe it is the right place to start.”
The issue of surprise billing has received growing attention over the years as more and more Americans find themselves stuck with an unexpected bill. In fact, according to a new AmeriSpeak® survey from NORC at the University of Chicago, 57 percent of American adults have been surprised by a medical bill that they thought would have been covered by insurance.
Several states have attempted to address the issue, including New Jersey, Connecticut, and California. Indiana’s own House Bill (HB) 1273, “Out-of-Network Covered Health Services,” which took effect January 1, 2018, takes a small jab at the problem by requiring healthcare providers who make referrals to other providers to give notice to patients of possible out-of-network situations.
But according to Loren Adler, associate director at USC-Brookings Schaeffer Initiative for Health Policy, this proposed federal policy goes further than most state legislation by requiring insurers to make some amount of payment to providers.
“This is 125% of the average allowed amounts in that region for that type of service. More or less, it’s like average in-network rates,” Adler told Healthcare Dive. “It’s easiest to think of it as the average in-network rate with a 25% add-on.”
Adler also said that while the proposed law would affect hospitals’ bottom line, emergency room doctors and anesthesiologists “stand to lose the most and are the two main groups most likely to line up in opposition to this bill if it were to move forward as-is.”
To that end, the American Society of Anesthesiologist (ASA) released a preliminary statement about the proposed legislation, saying, “This payment mechanism language is concerning to ASA because it provides significant deference to insurers and the anticipation of their willingness to engage in good faith negotiations with physicians. ASA and its state components have long advocated for out-of-network payments based on charged amounts.”
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