Different Approaches in Tackling the Surprise Medical Bill Problem
By
Clive Riddle, May 5, 2017
Surprise medical bills – from out of network physicians affiliated with
network hospitals, and other similar situations – have been a long
standing problem vexing consumers, providers, plans, employers and
regulators. This simmering issue began boiling over the past few years
as growth in narrow networks and ever increasing retail charges
exacerbated the problem.
Arizona last week had Senate Bill 1441
signed into law: “The legislation, which takes effect in 2019, will
allow a consumer with an out-of-network bill exceeding $1,000 to contact
the Arizona Department of Insurance to request the appointment of an
arbitrator. The insurer and health-care provider must try to settle the
dispute through an informal telephone conference within 30 days of the
consumer's arbitration request. The case advances to arbitration if the
two sides cannot agree to an amount, with the insurer and health-care
provider splitting the cost. Either party would have the right to appeal
an arbitrator's decision to the county Superior Court.”
Oregon,
Texas and
Nevada, to name some states, currently have legislative activity of
different kinds on this front.
Gastroenterology & Endoscopy News ran a nice April 20th 2017
article, Out-of-Network Billing: ‘Surprise
Billing’ or ‘Surprise Gaps In Insurance Coverage’? that included a
great summary of state level initiatives addressing these surprises.
Included in this discussion was:
·
A number of states are linking
reimbursement to rates determined by the independent third-party
database.
·
In New York
“Hospitals must disclose which health plans they accept and list
standard charges for services. Perhaps most important, they must alert
patients that physicians working at an in-network facility may not
actually participate in the insurance network and can therefore bill
patients directly.”
·
“California recently passed a law that
settles out-of-network billing disputes by using one of two benchmarks.
Providers will be reimbursed the greater of either 125% of Medicare
rates or the insurer’s average contracted rate for the same or similar
services in the same geographic region.”…but “not surprisingly, the
California law is already being challenged in court.”
·
“Florida’s new law sets reimbursement for
out-of-network claims at the lesser of: the provider’s charges; the UCR
provider charges for similar services in the community where the
services were provided; or the charge mutually agreed to by the insurer
and the provider within 60 days of the submittal of the claim. The key
in Florida moving forward will be how UCR is defined.” The
American Journal of Managed Care
has just issued a release discussing an article in their current
issue:
Battling the Chargemaster: A Simple Remedy to Balance Billing for
Unavoidable Out-of-Network Care, in which “two doctors and two
lawyers say they have a solution that doesn’t require legislation:
better use of contract law…..Authors Barak D. Richman, JD, PhD; Nick
Kitzman, JD; Arnold Milstein, MD, MPH; and Kevin A. Schulman, MD, say
the problem starts with the ‘chargemaster,’ a hospital’s master list of
prices for billable services. The authors say the defining feature of
the chargemaster is that it is ‘devoid of any calculation related to
cost,’ and has no relation to local market conditions.”
They release continues that “acontract law solution empowers the very
parties who currently are being exploited by out-of-network charges,”
they write. An emerging consensus, supported by a key court ruling,
finds that providers are not entitled to ‘chargemaster’ rates, because
neither the patient nor the payer agreed to them. Instead, the authors
write, the law “entitles providers to collect no more than the
prevailing negotiated market prices” for out-of-network care. In other
words, rates already negotiated by hospitals, doctors, and area payers
are the norm, not those artificially inflated on the ‘chargemaster.’
This leads to a stark conclusion, the authors find. ‘Providers have no
legal authority to collect chargemaster charges that exceed market
prices for out-of-network services, nor are payers under any obligation
to pay such chargemaster prices.’ The authors make their case in a legal
analysis available online.” So
while “the authors praise state legislators for trying to end surprise
medical bills, they say the courtroom is the proper place for these
disputes. Other remedies, like bans on out-of-network bills, don’t
encourage cost-saving steps or competition.” |
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