Health Plans Ask Congress for Unified Action on Surprise Billing

March 21, 2019 - Health plans are asking Congress to take swift action on surprise billing, which can leave consumers with enormous out-of-pocket expenses for unexpected or out-of-network services.

In a letter to leaders of both the House and the Senate, payer trade groups representing the majority of the nation’s health plans asked lawmakers to capitalize on public outrage about surprise billing and pass federal laws to reduce the practice.

“As the cost of health care in the United States continues to rise, we are committed to finding solutions to protect the financial stability of American consumers and patients,” wrote the groups, which include AHIP, the ERISA Industry Committee, and the BlueCross BlueShield Association, among more than a dozen others.

“A significant driver of high costs are exorbitant bills that millions of patients with comprehensive insurance coverage receive every year, demanding arbitrary fees for treatment by certain specialty medical doctors they did not seek out for care and, often, never even knew treated them. In fact, at least one in five Americans receives a surprise medical bill every year.”

Consumers deserve to be protected from unanticipated costs, especially when the rates set by hospitals and physicians “bear no relation to the actual cost of care or market rates,” the payers said.

READ MORE: AHIP, Payer Groups Agree to Focus on Nixing Surprise Billing

A 2016 study published in the New England Journal of Medicine found that an out-of-network anesthesiologist bill averages 580 percent of the Medicare reimbursement rate, the letter noted. 

Patients often have little choice about their anesthesiologist, and may be completely unaware that the clinician assigned to their case does not accept his or her insurance.

Emergency medicine physicians inflate their rates even higher: the average bill for an out-of-network ED visit could total a whopping 798 percent of what Medicare would pay for the same set of services.

“These excessive bills distort health care markets, create tremendous financial hardship on families and drive up premiums for everyone enrolled in commercial coverage,” the letter states.

The groups acknowledge that some state laws do attempt to address surprise billing, but too many consumers are left unprotected.

READ MORE: Retail Clinics, Surprise Bills Changing Healthcare Purchasing Patterns

“For the more than 100 million Americans covered by a self-funded health plan, these state laws provide no protection and underscore the need for federal action,” says the letter.  

A unified federal approach to outlawing surprise billing would ensure that consumers receive the same protections no matter where they live.

AHIP and the other signatories are urging lawmakers to take several key steps, including prohibiting providers from sending surprise bills for emergency care or other involuntary situations.

Care facilities should provide clear information on the coverage status of every provider, and should tie billing rates to accepted market factors, such as regional averages or a percentage of the Medicare reimbursement rate.

These “common sense solutions” to the widespread problem of surprise billing could help to control skyrocketing spending and ensure that healthcare is accessible and affordable for all consumers.

READ MORE: 86% of Consumers Blame Insurers for Surprise Healthcare Bills

Insurance plans have good reason to take a stand against surprise billing.  A recent study by NORC at the University of Chicago found that 86 percent of consumers blame their health plans when they receive an unexpected invoice.

Health plans with complicated network requirements – and those with poor member communication strategies – may be particularly at risk of customer attrition if surprise billing isn’t addressed.

“There's widespread confusion among consumers about their insurance. Plans with higher out-of-pocket costs, including deductibles, cause more issues. And as insurance designs become more complex, that confusion is likely to grow,” said Caroline Pearson, a senior fellow at NORC.

“We know people feel a high degree of confidence and trust in their physicians and hospitals, but there is rarely a similar level of trust associated with the insurance company. Insurance companies are viewed as entities that send bills, or as an 800-number, and they don't have the same level of credibility and trust in the minds of a patient.”

Clarifying the laws around surprise billing would allow payers to understand how to better communicate with their members – and potentially push some of the blame back onto the healthcare facilities that issue the exorbitant bills.

Lawmakers, for their part, seem willing to tackle the problem.  In February, a bipartisan group of senators sent a letter to the insurance industry requesting more information on the problem and its scope.

The senators asked for details about average out-of-network costs, comparisons to Medicare rates, and how surprise billing has impacted member premiums.

“Surprise medical billing is a complex problem, and crafting bipartisan, effective legislation to address it will require greater engagement from the private sector,” said the letter. “We want to protect patients from costly surprise bills while preventing undue disruption in the healthcare system.”

The exceedingly rare alignment between Congress, the payer industry, and consumers may bode well for patients at risk of receiving surprise bills.

“We applaud the recent, bipartisan attention this issue has received from members of both chambers, said the health plans in their letter. “We ask that Congress take action this year to pass legislation that will protect patients from surprise medical bills and reign in out-of-control health care costs.”

“By working together and putting the best interests of patients first, we can improve health and reduce costs. We look forward to working with you to advance common-sense solutions to this national problem.”