Surprise medical billing legislation: So close in 2019!

Jan. 6, 2020 / By Steve Delaronde

Patient advocates thought that 2019 might be the year the U.S. Congress passed legislation to protect patients from surprise medical bills. A divided Congress came together in an unusual display of bipartisan and bicameral agreement to announce legislation on December 8 that would have protected insured patients from unexpected out-of-network charges for emergency room visits, hospitalizations and air ambulance transport. Most thought that it would be included in spending legislation that was approved on December 20. But, surprise. It wasn’t.

How did legislation that had widespread popular appeal, as well as support from both Democrats and Republicans from key committees in the House and Senate, and the White House, not make it to the year-end spending bill? The lobbying efforts of hospital groups, as well as physician staffing groups backed by private equity firms, were effective in getting the House Ways and Means Committee to introduce a counterproposal just days after the bipartisan agreement was reached, thereby splintering the fragile coalition.

A group calling itself Doctor Patient Unity, funded by private equity-backed physician staffing organizations, spent more than $28 million in an ad campaign from July 30 to September 17 that called for “stopping the health care nightmare of rate-setting.” They did not want the out-of-network rates charged by anesthesiologists, radiologists, pathologists and emergency medicine physicians to be pegged to a benchmark rate similar to regional in-network rates, resulting in an estimated average 15-20% pay cut. In other words, they wanted to continue to charge higher prices to unwary patients who did not even know they were being treated by out-of-network providers at in-network hospitals.

Aside from hoping that federal legislation is passed in 2020, patients are not entirely without options. Some states, such as California and New York, have passed their own surprise billing legislation to protect patients. New York’s Out of Network (OON) Law, which was passed in 2014, requires that health plans hold consumers harmless from emergency and surprise out-of-network bills. Disputes are resolved between the health plan and provider using an Independent Dispute Resolution (IDR) process. Patients who are uninsured or have coverage through their self-insuring employers may also submit a dispute. 

Patients who receive surprise bills in states that do not have consumer protections have recourse to the courts, though many are not aware of this option. Medical bills from out-of-network providers are open-price contracts, since the agreement between buyer and seller does not specify the prices to be charged. In these situations, the seller is not allowed to demand more than a “reasonable” amount. 

Patients who receive out-of-network bills can compare the CPT code on their Explanation of Benefits statement to the rates paid by Medicare or private insurance plans using such websites as Healthcare Bluebook or Fair Health. They can then offer to pay the “fair” amount for the service based on this information. This is often the “usual and customary” amount that the health plan is willing to pay.

While the courts may offer some recourse to patients who receive surprise bills, it is not an ideal option. Patients are left to fend for themselves and often do not have the understanding, time, or fortitude to initiate or endure this process. A comprehensive solution that works for all patients is needed. However, unless federal legislation similar to what almost passed in 2019 is resurrected in 2020, patients who are not fully insured in states that have enacted surprise billing legislation will continue to fight this battle alone.

Steve Delaronde is director of consulting for Payer and Population Health Services at 3M Health Information Systems.