Congress sides with insurers over patients on ‘surprise billing’
Theresa Tassey, MD, MPH
Balanced billing - or “surprise billing” - happens when a patient visits a doctor that does not contract with their health insurance plan or is “out-of-network.” This can occur when patients are seen by specialty physicians (emergency medicine, radiology or anesthesia physicians, for example) in emergency situations or if a patient has an out-of-network specialist during a surgery or hospital stay. Since the medical care is not covered by the patient’s insurance, a bill may be sent by the hospital or physician staffing group directly to the patient - typically without the physicians’ knowledge. Patients may be faced with an unexpected medical bill that can be financially devastating or impossible pay.
The practice of balanced billing is not new but has become more common in the last decade. Health insurance marketplace and private health insurance plans have limited coverage of hospitals and doctors by narrowing their networks. Patients, physicians and lawmakers all want to end surprise billing. However, proposed legislation in Congress has been heavily influenced by insurance companies and if passed as written threatens to disrupt and even shutter parts of our nation’s emergency medical system.
Emergency rooms (ERs) and departments and their specially trained physicians, nurses and staff are ready to care for anyone at any time. They are open round the clock, every day of the year, and equipped to handle everything from traumas, heart attacks and strokes to cold and flu season. A study published in 2017 estimates that ERs provide over half of the medical care in the U.S. Since January 2010, at least 161 rural hospitals* and their ERs have closed. One study showed a 5% higher death rate in hospitals nearest to the closed ERs likely due to decreased and delayed access to care.
The Emergency Medical Treatment & Labor Act (EMTALA 1986) ensures all patients are treated in an emergency regardless of ability to pay. Emergency physicians pride themselves on caring for all without having to worry about insurance and billing, but this also makes funding emergency care unique. The government provides no financial support to ERs, and insurance companies, aware of the mandate, now limit or refuse to pay for emergency care.
Due to the large amounts for free and uncompensated medical care ERs provide, many operate as a loss to hospitals, some barely able to stay open. Around 66% of patients seen in ERs are covered by Medicare and Medicaid, but payment rates have not kept up with inflation. According to data from the Medicare Trustees’ Report, Medicare inflation-adjusted pay to physicians declined by 19% between 2001 and 2018. Payments from patients who are self-pay and those with private insurance keep ERs afloat. However, even this stream of “funding” for ERs has decreased. Insurers, aiming to increase their billions in annual profits and please their shareholders discourage patients from seeking emergency care, have narrowed networks (refuse to enter contracts with hospitals and physicians), and deny coverage for emergency care.
Once surprise billing came into national focus, insurance companies wasted no time in pointing fingers at physicians as the cause. Insurers spend more than $35 million a year lobbying Congress and favor a solution called “benchmarking” or rate-setting. This solution allows insurers to set payment rates without negotiating with hospitals or physicians. Overtime, insurers plan to drive down payments for medical treatments so low that many ERs will not be able to survive. Lawmakers should heed the chorus of warnings from physicians that serve on the front lines of our country’s safety net and consider how this will affect availability and quality of emergency medical care. Patients nationwide, especially those in rural areas, will suffer the most and may experience further hospital and ER closures.
An alternative solution called independent dispute resolution (IDR) has proven effective in many states, like New York. It has eliminated surprise bills and not increased costs and is considered a fair solution by patients, physicians and insurers. Despite being a reasonable solution, Congress has instead chosen to side with the deep pockets of insurers.
Emergency physicians understand the already strained emergency medical system and believe that “benchmarking” will harm patients by decreasing emergency medical access. Smaller, rural ERs will be forced to reduce staffing or close. Patients will experience longer wait times and decreased quality of care that could lead to permanent disability or death. Congress should consider solving surprise billing without harming patients and without putting our nation’s health care at risk. Otherwise, ERs may have to say: “Sorry, we’re closed.”
*The original article stated that 108 rural hospitals had closed, since numbers have been update through 2019 and show that 161 hospitals have closed.