I participated in a Capitol Hill panel discussion yesterday along with leading consumer and business groups and policy experts to urge Congress to advance policy reforms – such as a local, market-based benchmark payment rate – to protect patients from “surprise” bills from out-of-network providers. The event was organized by The Coalition Against Surprise Billing and was moderated by Katy Spangler of Spangler Strategies.
I presented first and my job was to make it clear that the issue of surprise billing is not just about the providers versus insurance companies and drive home the central point that employers are actually the biggest stakeholder as providers of coverage to 161 million Americans at a cost of $668 billion dollars a year. Also, everyone refers to health coverage as health insurance, but according to Mercer survey data, 75% of all employers are self-insured. Even when we look at groups of 50 employees or more, the average is 73% self-insured. Employers are footing the majority of the bill. I also shared that on average 95% of the claims in a group plan occur in-network. Even when we look at emergency claims, most of them are in-network. Of the 5% of claims that are out of network, only 2.4% are for emergency care (or 0.13% of all claims). When we think about the local, market-based benchmark that 20 of the 23 members of the HELP committee voted for in recently passing the Lower Health Care Costs Act, it is important to note it would only apply in the case of surprise medical bills for out-of-network emergency claims and when patients go to in-network hospitals but are seen by an out-of-network provider.
We need to be very careful not to confuse surprise medical bills with consumers fears of not being able to afford needed medical care. Frequently the two concerns are conflated. For example, Kaiser Family Foundation polling revealed that two-thirds of Americans say they are either “very worried” (38 percent) or “somewhat worried” (29 percent) about being able to afford their own or a family member’s unexpected medical bills. The surprise billing legislation would only address the former issue. Full repeal of the Cadillac tax would help address the other concern.
Loren Adler, Associate Director of USC-Brookings Schaeffer Initiative for Health Policy, made several important points. The surprise billing is coming predominately from ancillary providers who don’t get patients from an insurance company’s network. They tend to be the providers who can charge a very high list price for purposes of driving the starting point of the negotiations with insurance companies (which is a problem because then employers pay a percentage of the negotiated savings to the carrier). In addition, private equity companies have been purchasing the ancillary provider practices, cancelling their network contracts, raising prices and aggressively balance billing patients. His suggested fix: Make balance billing illegal (get the patient out of the middle); treat the expense as in-network for patient cost sharing and set a limit on the payment. Another reform imperative for Adler: avoid using billed charges for any payment calculation.
Chuck Bell, Programs Director, Advocacy for Consumer Reports focused his remarks on the consumer and at times waded into the broader definition of surprise medical bills. He did share a specific case where a patient was billed $474,000 for air ambulance service. This prompted Katy to ask the panelists for a show of hands on who thought air ambulance should be addressed in surprise billing legislation (all were affirmative) as well as ground ambulance charges (again, all were affirmative).
Elizabeth Mitchell, President and CEO of Pacific Business Group on Health stole the show with her remarks that she was surprised that employers are finally seeking policy intervention for the current broken system and also surprised (pleasantly) with how the HELP committee responded with legislation addressing not only surprise medical bills but transparency and prescription drug costs as well. She went on to share examples of major employers committed to providing better value care but hindered by a lack of transparency. The top priorities of PBGH members, said Mitchell, are to end surprise medical bills and reject arbitration which will lock in high prices with no relationship to value and fairness. “Surprise billing is not an accident, it is a business model,” she noted.
Lee Goldberg, Health Policy Analyst for the ADFL-CIO also shared his concerns with using arbitration as it would add additional cost, uncertainty and a lack of transparency.
The final speaker was Andy Chasin, AVP of Federal Policy at Blue Shield of CA. He shared the experience in California with a recent state law that tackles surprise billing in a manner similar to that proposed in the Lower Health Care Costs Act. The California law takes the consumer out of the middle and sets a benchmark reimbursement rate for surprise bills at 125% of Medicare. Blue Shield of CA actually saw more providers come in-network after the law’s enactment. The benchmark ended up raising compensation for underpaid providers and cut the outliers at the top end. Most importantly, it helped consumers.
But specialty doctors and provider groups are pushing back – hard. In fact, the day before our panel discussion on the Senate side of Capitol Hill, House lawmakers added an arbitration “backstop” to a surprise billing measure that previously embraced a median in-network benchmark rate for settling payment disputes. The employer voice is an important one on this issue. Outreach to your members of Congress and support for employer advocacy groups is so very important. We will continue to keep you updated.