Texas and numerous other states across the country are debating ways to protect sick Americans from outrageous (surprise) medical bills. The White House and bipartisan Members of Congress all support putting a stop to surprise medical bills. In case you’re ever a contestant on a gameshow and the question comes up: “Name one issue on which House Speaker Nancy Pelosi agrees with President Trump?” The answer: putting a stop to surprise medical bills.
This year Texas is one of the many states struggling to protect patients from the surprise medical bill scam. A bipartisan senate bill (SB1264), sponsored by Republican state senator Kelly Hancock, would hold patients harmless for any fees in excess of in-network cost-sharing. In other words, this bill would remove patients from out-of-network fee disputes that arise between doctors, labs, clinics and patients’ health plans. The Texas senate bill would also force providers and insurers to negotiate and arrive at an agreed upon fee. Failing an agreement, the dispute would be settled by a mediator.
Surprise medical bills occur when patients either unknowingly or cannot avoid receiving medical care from physicians and therapists, or in hospitals, clinics and labs that are not in the provider networks of a patient’s health plan. Why does this happen? It’s a way to game the health care system. Many out-of-network providers have purposely refused to join provider networks so they can charge fees many times higher – double, triple even 100 times higher – than the usual & customary fees reimbursed by health plans. When out-of-network provider fees exceed health plans’ in-network rates, patients often must pay the outstanding balance. The medical establishment refers to this practice as balance billing.
Balance billing has become a strategy many providers – doctors, hospitals, clinics, labs and so on – use to boost revenue beyond what health plans customarily pay. Providers like to blame balance billing on narrow networks and lower network reimbursements. Yet, it is doubtful balance billing would go away even if insurers and health plans were to double or triple the provider fees they pay. Why? Because patients have proven to be a source of additional revenue too lucrative for some providers to ignore. In a recent survey of physician fees published in the Journal of the American Medical Association,individual physicians billed anywhere from the rates Medicare pays to 101 times what Medicare pays. The median fee was 2.5 times Medicare’s (low) reimbursements, suggesting most physicians have fair prices but a few charge fees that are beyond exorbitant.
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It’s to the point that even careful patients find it difficult to avoid surprise medical bills. Who makes a business model out of surprise medical bills? It’s not your trusted direct primary care physician who gouges you. It’s also not your pediatrician or your dermatologist. Patients have the opportunity to ask their primary care physicians whether they accept their insurance and decide to pay cash if they do not. It’s not even your surgeon, who most patients diligently verify works with their health plan.
The culprits who balance bill are those providers whose patients do not personally choose them or have the opportunity to meet them prior to care. Most patients probably select an in-network dermatologist or pay cash for their services if out-of-network. However, when dermatologists order a skin biopsy, their patients do not generally choose the pathologist who performs the service. Neither do patients needing a CT scan personally choose the radiologist who interprets their scans. Consumers also have no discretion over the anesthesiologist on call the day of surgery. Under the surprise medical bill business model, scamming patients who lack discretion is a feature; not a bug.
There is certainly nothing wrong with health care providers declining to join provider networks. Health care providers in competitive markets should also be free to establish fees in accordance with market conditions where they provide care. However, providers should not be allowed to profit from subterfuge and gaming the health care system by intentionally keeping their network status and prices a secret until it’s too late.
Remove patients from the fee disputes that rage between health care providers and health plans is an important step. Sick patients should not be unwitting pawns in a game of Gotcha! Moreover, protecting patients from surprise medical bills does not interfere with the doctor/patient relationship. Nor would it prevent patients from receiving care from independent physicians or the doctors of their choosing while paying cash. Surprise medical bill protection would also not force any doctor to join a network if they preferred not to.
In most other areas of our economy a meeting of the minds (also known as mutual assent) is required to have an enforceable agreement under contract law. Mutual assent should be used to protect patients from excessive out-of-network provider fees they never knew about nor agreed to. Mutual assent should also protect the right of patients to seek care from independent physicians and physicians’ right to practice independently. The ultimate solution to the surprise medical bill scam is to strengthen the doctor/patient relationship through mutual assent and transparency.
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