July 22, 2019
Area(s) of Interest: Payor Issues and Reimbursement Out of Network Billing
Last week, the U.S. House Energy and Commerce Committee approved the “No Surprises Act,” which is intended to protect patients from the financial hardship and emotional stress of surprise medical bills when their insurance fails them. While the California Medical Association (CMA) is committed to working towards a solution that protects patients from surprise medical bills, we continue to oppose the underlying bill (H.R. 3630).
The “No Surprises Act” mirrors California’s failing law in that insurers are not incentivized to contract with physicians and offer an appropriate network of physicians to ensure access to care. Like the California law, H.R. 3630 would establish an extremely low payment benchmark for out-of-network physicians and do not have an effective dispute resolution process with an independent database of rates.
While patients in California have been protected from surprise medical bills, the rest of the law has not worked. Under California’s surprise billing law (AB 72, 2017), insurance company physician networks are diminishing, patient access to in-network physicians is declining, patient access to emergency physicians and on-call physician specialists is in jeopardy, patient deductibles for out-of-network care are increasing, and patient complaints about access to care have increased by almost 50%.
CMA is urging Congress to develop a more balanced approach that ends balance billing but does not give insurers unilateral control of the market that causes more out-of-network care. CMA believes that Congress should adopt a system modeled after the successful New York law that has been in effect since 2015. The law has helped keep insurance rate hikes in New York well below the national average.
The New York system is a more balanced model that encourages physicians and insurers to be more reasonable, resolve their disputes and enter into contracts to ensure patients have an appropriate choice of physicians in their insurance company networks. There has been a 34% drop in out-of-network billing because networks have stabilized.
CMA and the American Medical Association have secured some amendments to the federal “No Surprises Act,” including a provision that add an appeal process for resolving out-of-network payment disputes. The addition of an appeals process, albeit imperfect, represents progress. We will continue to work with Congress to make further improvements on this and other elements in the legislation.
“CMA looks forward to continuing to work with the committee and others to further improve this legislation,” says CMA President David H. Aizuss, M.D. “We must protect patients from surprise medical bills, while also making sure rates paid by health plans are sufficient to ensure there are providers available in hospitals, emergency rooms and clinics to treat patients who need care.”
CMA and AMA are backing an alternative approach to end surprise billing—“Protecting People from Surprise Bills Act of 2019”—introduced by four physician congressman physician congressmen Raul Ruiz, M.D., (D-CA), Phil Roe, M.D., (R-TN), Ami Bera, M.D., (D-CA) and Larry Bucshon, M.D. (R-IN), as well as Joseph Morelle (D-NY), Van Taylor (R-TX), Donna Shalala (D-FL) and Brad Wenstrup (R-OH).
Based on New York state’s successful law, this proposed legislation creates incentives for physicians and insurers to contract and resolve their differences. It also addresses the underlying cause of the problem – the insurance industry’s oligarchic market dominance – that has allowed insurers to narrow their physician networks so patient access to physicians is limited.
The CMA-backed proposal requires insurers to give patients a robust choice of physicians, including hospital-based emergency physicians, and on-call surgeons and anesthesiologist, who will be there for patients in life and death emergencies. It allows insurers to pay commercial rates for out-of-network care but if parties disagree, the proposed “baseball arbitration” system encourages insurers and physicians to resolve their disputes without costly lawsuits.