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Payer Accountability Key for Surprise Medical Bill Legislation

Industry groups penned a letter to Congress offering recommendations for impending surprise medical bill legislation.

surprise medical bill

Source: Thinkstock

By Sara Heath

- Draft legislation addressing surprise medical bills must include provisions to hold healthcare payers accountable for narrow networks and limited transparency, according to a group of industry organizations led by the American Academy of Family Physicians (AAFP).

In a February 7 letter to Congress, the group, which consisted of over 100 medical groups and state organizations, provided support and recommendations for Congressional leaders drawing up legislation to put an end to surprise medical bills.

A surprise medical bill is a set of healthcare charges a patient was not expecting to receive or did not expect to be so high. Surprise medical bills often occur when a patient unwittingly receives care at an out-of-network facility or from an out-of-network provider.

Surprise medical bills also occur when a patient did not anticipate that a certain treatment would be so expensive or that their insurer would cover more of the treatment costs.

The healthcare industry has come out strongly against surprise medical bills, wrote the signatories.

READ MORE: Senators Seek Payer, Provider Data on Surprise Medical Bills

“Patients, physicians, and policymakers are deeply concerned about the impact that unanticipated medical bills are having on patient out-of-pocket costs and the patient-physician relationship,” they wrote.

The fundamental issue lay with payer organizations, the letter continued. Payers host extremely narrow networks which make it difficult for patients and providers to keep track of when care will be in- or out-of-network.

“Health insurance plans are increasingly relying on narrow and often inadequate networks of contracted physicians, hospitals, pharmacies, and other providers as one mechanism for controlling costs,” the letter reads.

“As a result, even those patients who are diligent about seeking care from in-network physicians and hospitals may find themselves with unanticipated out-of-network bills from providers who are not in their insurance plan’s network, simply because they had no way of knowing and researching in advance all the individuals who are ultimately involved in their care.”

Physicians, too, are disadvantaged by this system because it demands them to be privy to information that is often difficult to obtain during medical crises, the letter pointed out.

READ MORE: Complex Health Plan Benefits Give Rise to Surprise Medical Bills

Currently, 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), are working on potential bipartisan legislation to address the issue of surprise medical bills. AAFP and the other signatories offered a list of recommendations for the bill.

Specifically, the group would like the bill to include insurer accountability and stricter network adequacy standards. Additionally, the bill should require insurers to maintain updated physician directories, the group wrote.

Finally, insurers should be required to revise their prudent layperson clauses, which in many cases are making patients responsible for exceptional emergency medical costs when the insurer deems an encounter “avoidable.”

Additionally, the bill should place limits on patient financial responsibility, improve healthcare transparency, and set benchmark payments. Legislation may also include language that would make it easier for patients to settle disputes with payer organizations and hospitals.

Each of these provisions should be applicable to all health plans and hospitals.

READ MORE: Bipartisan Proposal to Protect Patients from Surprise Medical Bills

Current iterations of the bill call for better healthcare transparency and patient protections. Specifically, the bill would call for better transparency and financial protections when patients receive care from an out-of-network provider in an in-network facility.

These provisions are essential for addressing surprise medical bills, the AAFP letter asserted, but must also go further.

“In addition to providing strong patient protections, we believe the principles set forth above would improve transparency, promote access to appropriate medical care, and avoid creating disincentives for insurers and health care providers to negotiate network participation contracts in good faith,” the group concluded.

Surprise medical bills have gotten considerable attention as of late. As healthcare professionals work to reduce medical spending and out-of-pocket patient costs, they are turning to address some of the exceptional costs many patients face.

A September 2018 poll from the Kaiser Family Foundation revealed that 67 percent of patients are worried about surprise medical costs. Unexpected medical bills are the biggest healthcare and financial issue on consumers’ minds.

Surprise medical bills are an increasingly prevalent issue in the healthcare industry, the survey noted. Forty percent of insured adults ages 18 to 65 said they have received a surprise medical bill in the past 12 months. Of those respondents, 10 percent said their bill stemmed from out-of-network care.

In addition to this most recent letter, industry groups have been speaking out against the practice of surprise medical billing. Additionally, the Congressional leaders working on the bipartisan bill have recently requested more information regarding medical billing practices from payers and providers.

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