On Sept. 24, 2018, the bipartisan Senate Health Care Price Transparency Working Group released draft legislation to address surprise medical bills.
Senators Bill Cassidy, MD (R-LA), Michael Bennet (D-CO), Chuck Grassley (R-IA), Tom Carper (D-DE), Todd Young (R-IN) and Claire McCaskill (D-MO) issued a preliminary version of the “Protecting Patients from Surprise Medical Bills Act” in hopes of soliciting greater feedback from affected stakeholders. The American College of Radiology (ACR) is reviewing the draft legislation in advance of submitting detailed comments.
Surprise medical bills, or charges assessed to patients after receiving care from out-of-network physicians and hospitals, occur in a variety of situations. For example, surprise bills might be issued for medical services performed on an unconscious or incapacitated patient at an out-of-network hospital for emergency services performed by out-of-network emergency room (ER) physicians.
Surprise medical bills also arise from individuals experiencing emergency health events and being transported to in-network hospitals, yet the emergency room physicians are not within the beneficiaries’ network of providers.
A third possibility for surprise medical billing is when patients can experience unexpected medical bills stemming from scheduled care that requires services rendered from ancillary specialists, such as radiologists, pathologists, anesthesiologists and even surgical assistants. Under this scenario, beneficiaries receive care at an in-network hospital but their ancillary physicians are deemed out-of-network by the insurer.
Patients who see out-of-network physicians at in-network facilities may be subject to relatively higher cost-sharing rates and balance bills that require them to pay the difference between the physician’s usual charges and the discounted rates insurers pay to contracted members of their provider network.
The preliminary draft of the “Protecting Patients from Surprise Medical Bills Act,” attempts to mitigate the negative impact of the most common surprise medical bill scenarios. In addition to banning balance billing, patients are only required to pay in-network cost sharing rates when receiving either emergent or scheduled care from out-of-network physicians.
For emergency services provided by an out-of-network provider at an out-of-network facility, the ER physician must be paid in accordance with limitations established by existing state law. If a state does not regulate out-of-network emergency services, the ER physician can only receive the greater of the median in-network amount negotiated by the applicable health plan (the bill is silent regarding what data is used to calculate the median rate) or the usual, customary, and reasonable rate (UCR). The bill defines UCR as 125 percent of the average allowed amount for the service provided by a physician in the same or similar specialty practicing in the same geographical area available from a “statistically significant benchmarking database maintained by a nonprofit organization.” The UCR could also be calculated from a state’s all-payer claims database if administered by a nonprofit.
If patients require more treatment in the ER after being stabilized, the hospital or provider must notify the beneficiary in writing that they may be required to pay higher cost-sharing than if they received these services at an in-network facility. Patients must provide written consent before receiving additional services and be given the option to transfer to an in-network facility.
The bill also defers to existing state law for scheduled care performed by out-of-network providers at in-network facilities. In the absence of any state laws, the bill restricts reimbursement for ancillary physicians, as well. The draft legislation states that out-of-network ancillary physicians can only bill for an amount based on the greater of the median in-network amount negotiated by the health plan (the bill is silent regarding what data is used to calculate the median rate) or a UCR. The legislation defines UCR as 125 percent of the average allowed amount for the service provided by a physician in the same or similar specialty practicing in the same geographical area available from a “statistically significant benchmarking database maintained by a nonprofit organization.” The UCR could also be calculated from a state’s all-payer claims database if administered by a nonprofit.
In follow-up comments to the bipartisan Senate Health Care Price Transparency Working Group, the ACR will express support for patients only paying in-network cost-sharing and for obtaining written consent prior to administering additional care within an ER after the beneficiary has been stabilized.
Yet, the College will highlight how insurers often attempt to shift the blame to physicians for excessive out-of-network bills, when surprise bills are better understood as “surprise gaps in insurance coverage.” As a result, it’s more accurate to associate surprise bills with insurers preying upon consumers’ desire for low-cost insurance and failing to disclose potentially costly flaws in their plans, including the impact of inadequate provider networks. To solve this glaring problem, the ACR will urge the legislation to include robust network adequacy protections.
The ACR will also raise concerns about automatically banning balance billing for both emergent and scheduled care, including in states that have not passed legislation addressing surprise medical bills. The College will urge senators to view states that have already passed legislation banning balance billing differently than states that have taken no action on this policy. In states that ban balance billing, out-of-network physicians delivering scheduled care should have the option of pursuing either alternative dispute resolution (ADR), commonly referred to as mediation, or some other form of UCR.
The ACR supports receiving the greater of either the median in-network rate charged to health plans or a UCR equivalent to the 80th percentile of charges contained in the FAIR Health Database. The FAIR Health Database, an independent collection of more than 25 billion private health care and 20 billion Medicare claims, is typically regarded as the gold standard for analyzing and establishing UCRs for care delivered by out-of-network physicians.
The College will actively oppose the use of the median in-network amount negotiated by the health plans. The ACR will also highlight flaws with existing state laws banning balance billing and prohibiting out-of-network physicians from receiving reimbursement no greater than a percentage of Medicare rates. These laws provide no incentive for insurers to negotiate reasonable payments with providers and exacerbate access-to-care issues.
Traditionally, the ACR’s government relations activities related to surprise medical bills have focused on state legislatures. Although the working group’s discussion draft shifts the topic toward a federal solution, the ACR will continue to work with other affected national medical specialty societies, including the American College of Emergency Physicians, American Society of Anesthesiologists and College of American Pathologists, to improve this draft bill.
To date, there is no companion effort in the House of Representatives and the next steps in the Senate are uncertain. ACR members are urged to closely monitor Advocacy in Action eNews for the latest developments pertaining to surprise medical bills.
Questions may be directed to Chris Sherin, the ACR’s director of congressional affairs at firstname.lastname@example.org.