- Healthcare payers may find that they may no longer have to pass on extraneous costs to their consumers when out-of-network providers send more costly claims their way. New legislation in states like New York and California may soon put an end to surprise medical bills patients face when involuntarily receiving treatment from an out-of-network provider.
Providers, however, may see their revenue dwindle if they cover many patients outside of the health plans they contract with. With narrow networks becoming a more common occurrence among health payers today, more patients than in prior years may receive medical treatment or diagnosis outside of their network.
The Kaiser Family Foundation released a report stating that one-third of nonelderly adults struggling with paying their medical costs had the issue stem from out-of-network surprise medical bills. As many as 70 percent of these individuals did not know that they were receiving care from providers who were outside their network, the report found.
Surprise medical bills often occur after a patient obtains emergency care whether through ambulatory services or within an emergency department where they rarely have an opportunity to choose an in-network provider.
In 2015, the state of New York put in place a new law that puts a limit on the number of surprise medical bills patients face from an out-of-network clinician when receiving treatment at an in-network hospital or medical facility.
The way the legislation in New York works is by ensuring that all patients who receive emergency care regardless of their provider network are only held accountable to costs associated with the cost sharing of their in-network health plans. As for non-emergency care, patients will need to send forms to the provider instructing them to bill the payer directly in order to surpass any surprise medical bills.
Kaiser Health News reported that about one-quarter of all states have laws that prohibit balance billing from out-of-network providers, which is essentially sending bills to patients for any costs that weren’t covered by their health plans. Not all of these laws cover every type of treatment but most consider emergency care as a reason to disallow balance billing or surprise medical bills.
“If we’re mandating that people buy insurance coverage it seems we should also protect them from surprise medical bills,” Mark Rukavina from Community Health Advisors told Kaiser Health News.
One expert - Jack Hoadley, a research professor at Georgetown University’s Health Policy Institute - told the news source that the law passed in New York last year may be the most comprehensive regulatory action against balance billing. Patients are kept from having to pay more than their in-network co-payment or deductible when unwillingly receiving care outside of their network.
“A key element that is really new is that for anyone who gets a surprise out-of-network service or who doesn’t get the right disclosure [beforehand] about it, there’s a way for the consumer to step out of the middle of the transaction,” Mark Scherzer, legislative counsel at New Yorkers for Accessible Health Coverage, told the source.
More recently, the state of California is also looking at passing legislation that would disallow balance billing, which would impact revenue for providers but keep payers from having to pass on additional costs to their consumers. According to the publication STAT News, patients who are treated by an out-of-network anesthesiologist or have their X-rays read by an out-of-network radiologist will not be saddled with surprise medical bills if this legislation is passed in California.
The bill is called AB 72 and must move through the California Senate, the state assembly, and then onto the Governor’s office. State Assemblyman Rob Bonta (D-Alameda) was the first to sponsor this bill.
“This is as important a consumer protection bill as there is today,” Bonta said in a public statement. “Thousands and thousands of Californians throughout the state will benefit.”
While surprise medical bills of this type only affect a small percentage of patients, the resulting costs can total in the thousands of dollars, which many individuals are unable to afford. However, providers in California are not satisfied with the idea of having to take lower reimbursement rates.
“We’re supposed to hire an attorney or go off to a dispute resolution process, spend hours getting ready, and then hours at the process?” Dr. Michael Couris, a San Diego ophthalmologist, told the news source. “You’re telling me this is a tenable position? This is laughable.”
On the other side, this type of legislation may benefit health payers by improving customer relations since insurers will no longer be forced to send unpaid bills to their consumers for out-of-network medical care. Healthcare providers within these states that rely on out-of-network revenue may need to change their business practices in order to keep their revenue stable in the midst of new legislation against surprise medical bills.