By Mark Sickles and George Barker
Many Virginians have experienced confusion and distress after receiving an unexpected bill from a health care provider following medical treatment. Despite having health insurance and even visiting a hospital that is in-network, they sometimes face paying the remaining balance for their care that was not covered by their health insurance because one or more services or treating physicians were outside of their insurer’s network.
Instead of focusing on recovery, they are now stressed by a bill that exceeds their financial means. This problematic practice by out-of-network providers is referred to as “surprise” or “balance” billing and is contributing to escalating health care and insurance costs for many Virginians.
Unlike many health care policy debates in Richmond, this is not a squabble between insurers and health care providers. Rather, this is a fight for fair and reasonable treatment of patients. Patients ultimately pay all the bills — from insurance premiums to out-of-pocket costs.
We have to find ways to make health care costs more transparent, understandable and predictable. Few of us understand there is a possibility that physicians administering care in an emergency room, for example, might not take insurance, despite the fact that the hospital emergency department does. However, Virginians should be able to assume every service provided at in-network hospitals will be covered by their health insurance plan.
Unfortunately, some private-equity backed companies that own physician practices and staff emergency rooms are gaming the health care system and capitalizing on the practice of surprise billing. They have funded an advocacy group that spent $53.8 million to try to stop federal legislation that would have prohibited balance billing. That is one reason why we need to take action now at the state level.
Virginians already concerned about escalating health care and insurance costs shouldn’t have to be burdened by surprise billing. Together, we have developed commonsense legislation to provide greater consumer protections against surprise billing for health care services, all without increasing health care costs.
Senate Bill 767 and House Bill 901 would provide financial protections to all who receive coverage in the commercial marketplace, including fully-insured individual, small and large groups; self-funded employer-sponsored plans; the self-funded state employee benefit plan; and self-funded local government employee benefit plans. Our bills allow the vast majority of the commercial marketplace — more than 3 million Virginians — to opt-in through their employer-sponsored, ERISA plans. To be clear, this opt-in only works in a surprise billing solution that does not cost the employer more money to provide health insurance coverage.
The legislation prohibits surprise billing in the event of an emergency, or when a patient receives services performed by an out-of-network provider at an in-network facility. In such situations, out-of-network providers would be fairly compensated at a rate established at the lower of the median amount that in-network providers would receive, or 125% of what Medicare would reimburse for that service.
Setting a higher rate would reward providers at the expense of Virginia patients, and that is unacceptable. We believe our approach is fair both to providers and patients because it reflects actual market rates to which in-network providers have agreed and does not rely upon third-party databases to aggregate data on all paid claims, including exorbitant out-of-network charges. The Congressional Budget Office cited the type of benchmark we use could save consumers $25 billion dollars over the next 10 years.
Furthermore, our solution removes the perverse incentive for providers to remain out-of-network since they will not be able to charge higher prices to patients who have limited or no choices, such as in emergency cases.
Our legislation has already gained support from a large, diverse coalition of consumer groups and employers, including the AFL-CIO, the Virginia Bankers Association, the Council of Independent Colleges in Virginia, the ERISA Industry Committee and others.
We appreciate that providers play an important part in everyone’s lives. That is why we include protections for providers, including a mechanism for payment validation with annual monitoring and reporting on provider participation in health insurer networks and provider reimbursement rates. This allows us to assess annually any adverse impact on providers and adjust accordingly.
Enacting these proposed consumer protections against surprise medical bills and setting an appropriate benchmark to pay providers is a reasonable solution that will help lower health care costs, encourage providers to participate in health plan networks and eliminate the uncertainty in health care pricing for all Virginians.