Insurer-provider arbitration process would enhance consumer protections, transparency
As a physician, I have spent over 30 years taking care of patients. I know the worry and stress medical expenses can cause. That stress is magnified when the expense comes in the form of a large, unexpected medical bill.
Typically, surprise billing occurs when patients are treated by an out-of-network physician at a facility they believe is covered by their insurance. These bills are a financial burden for many; for some, they can cause financial ruin. President Donald Trump has rightly put attention on this issue, and I’m glad to see both parties working together passionately in order to resolve it.
What some may not know is that surprise billing is usually the result of a breakdown in negotiations between providers and insurers on how much to pay for these services. When this occurs, I believe patients and families should be protected, which is why I am proud to have introduced the Protecting Patients from Surprise Billing Act with Rep. Raul Ruiz, M.D. (D-Calif).
This legislation will ban the practice of billing patients for unanticipated out-of-network care, rightly taking them out of the equation. To resolve the remaining balance, our legislation uses an independent dispute resolution arbitration process when an insurer and provider cannot agree on the cost of care.
This legislation is based on a successful model in New York state. In addition, this bill also sets the goal of improving transparency by requiring health plans to clearly identify in-network providers and patient deductibles.
We have almost five years of data from New York showing that arbitration works for all parties involved — patients, providers and insurers. According to a 2018 study, out-of-network bills declined by 34 percent in just three years. Despite concerns that arbitration would drive up insurance rates, there’s no evidence that has occurred. Also, fewer than 1 percent of all out-of-network claims end up in the IDR process because this process is designed to encourage parties to come to an agreement before arbitration.
The arbitration process is “baseball-style,” where both sides submit proposals to resolve the dispute and the arbiter can only choose one or the other. It is also proven to be fair between providers and insurers: As of October 2018, 618 decisions favored the insurer and 561 favored the provider in New York. It’s clear this model works without favoring one side over another in billing disputes.
There are multiple surprise billing proposals being introduced, but we don’t need to reinvent the wheel when our states have already laid out a path forward for us. Some bills propose setting a payment benchmark at the median in-network rates for healthcare plans to pay out-of-network providers. Our concern — based on what I’ve seen as a provider — is a fixed price system will give an advantage to insurers, leaving physicians with reduced bargaining power for their services and ultimately threatening patients’ access to care.
To make matters worse, rural hospitals and other low-income health facilities are already at a disadvantage, because the Medicare wage index cuts payments by nearly 30 percent to many of those hospitals. Setting a fixed price would tie rates to Medicare and only worsen the situation, putting many rural hospitals out of business and providers out of work, ultimately leaving patients without treatment.
Today, 67 percent of Americans are worried about unexpected medical bills and 37 percent are very worried. The practice of surprise billing needs to end. Everyone in Congress agrees on that. I have been very pleased to see Democrats, Republicans and the Trump Administration all work together on this serious issue. I am hopeful that Congress will find common ground on this issue that is fair to all parties, but most importantly patients.