by Artemio Muniz
Last month, Texas became the latest state to offer relief to patients slammed with unexpected medical expenses – a practice known as “surprise billing.”
This new law will protect some patients, but not all – only about 40% of Texans have a health plan regulated by the state. For others regulated by the federal government, Congress is working on it, having released several legislative proposals to curb surprise billing. One thing is already clear: Conservatives can’t sit on the sidelines in this debate because Democrats are already trying to use the opportunity to advance their view of socialized medicine.
Ending the practice of surprise billing is one of the few policy goals that both sides can support. But, like most of the problems Washington gets involved with, there is a right way and a wrong way to go about fixing it. First and foremost, the final legislation must protect patients and remove them from the middle of disputes between doctors and insurers. It should not be a vehicle for greater government involvement and price fixing that will hurt quality of care and make it harder for patients to see their doctors.
So what causes surprise billing? When someone goes to the emergency room with a heart attack, stroke, serious injury, or other medical emergency, getting the patient in the hands of medical professionals can be the difference between life and death. Emergency room doctors and nurses are professionally obligated to treat every patient, regardless of their insurance plan.
But if patients visit an out-of-network hospital, get treated by out-of-network doctors, or have tests performed by out-of-network specialists, and their insurance company refuses to pay the out-of-network charges, those patients can find themselves on the receiving end of a massive medical bill. In these circumstances, patients have little say in where they are treated and which doctors they see but are punished by insurance companies for having a medical emergency.
Surprise medical billing has many root causes, including narrow insurance networks, denied coverage, and high deductibles. In the end, patients pay costly insurance premiums every month, only to discover their plans fail to protect them from the cost of care, particularly in emergencies. When insurers and doctors fail to agree on reimbursement for services provided, the patient is stuck in the middle – and stuck with the bill.
Some lawmakers, like Democratic Rep. Frank Pallone, have already proposed legislation that purports to end surprise billing through government rate setting. This approach would be damaging for our healthcare system and counterproductive to the idea of making sure patients can see doctors when they need to. Rate setting is essentially government price fixing, capping the amount that doctors can charge for medical care. Not only does this fail to take into account the role insurance companies play in shrinking networks and denying payments, it would put many doctors out of business. Rate setting would be catastrophic for rural areas, which are already experiencing doctor shortages.
Some proposals are attempting to pass off the idea of capping reimbursements at a median in-network rate in order to bring Republicans along. This is billed as a “market-driven” solution when, in reality, it is just another way to artificially set prices for healthcare without addressing the role insurance companies play in causing surprise billing. Rate setting is rate setting by any name, and it gives insurers incredible leverage with in- and out-of-network providers. This approach would still shrink networks and make it harder for patients to receive the care they need.
A better path to protect patients and end surprise billing would be through an independent dispute resolution (IDR). (This is the path Texas took in its own recent state legislation.) Unlike price fixing schemes and rate-setting proposals, IDR would prevent further government interference in the economics of healthcare. IDR is essentially an arbitration process overseen by a neutral healthcare expert. It resolves billing disputes before they ever reach the patient.
This model has already reduced the frequency of surprise billing while lowering the cost of emergency care in a handful of states (New York has handled nearly 2,000 cases in a couple of years under this system). On the other hand, rate setting has been tried in California and has failed to address the underlying problems behind surprise billing. An arbitration system, combined with requirements for insurance companies to maintain adequate networks that actually allow patients to find a doctor who is covered by their plan, is far more favorable than a government-driven concept that fails to account for basic economics.
Surprise billing can have disastrous consequences for patients and President Trump should be applauded for tackling the problem head-on. But we must be skeptical of any proposal that caps rates and opens the door for Democrats to further embrace socialized medicine. Conservatives must oppose rate setting — and fix surprise billing with policies that protect patients and preserve their ability to see a doctor.
About Artemio Muniz:
The Wall Street Journal called Artemio “Temo” Muniz “part salesman for the GOP and part agitator within it.” Muniz is co-founder and chairman of the Texas Federation of Hispanic Republicans, Outreach Committee chairman for the Young Republican National Federation and board member of the Center for Latino-Jewish Relations.
The greedy health insurance industry put us on this path some 30 years ago with HMOs, PPOs, networks, and “managed care.” They effectively destroyed affordable health care in the USA. If the health industry cartel does not reform and clean up its act (highly unlikely), government takeover of healthcare is inevitable. It probably is already too late.
I have simply drawn up a Family Financial Policy that I give to all medical providers that state I am offering my insurance and agree to pay all co-pays and deductibles. However, I state my intent to only agree to utilization of in network providers and if they and the insurance company agree to a discounted rate they will have to accept that as full payment. I sign it and Mark up their financial policy to incorporate it. if they try to use electronic forms that cannot be changed to incorporate it I sign in stead of my name the phrase See XXXXXX family financial policy and let them rely on my signature on the financial policy. I have only had one urgent Care facility refuse to treat my wife because of it. I had to do this after having a in network physician at an in network hospital call into surgery a out of network surgical assistant. We got charged a $7500 bill and it was subject to a separate out of network deducible. Nobody should be forced to sign a blank check that could bankrupt them just to keep a love one alive. Where the current system is broke is the patient no longer knows what the cost is or what the insurance will pay. Both of those parties are negotiating with each other to the detriment of the patient. My financial policy at least gives me a seat at the table.
Surprise billing is a bit more complicated than you think. Insurance companies negotiate deals with providers, including hospitals, for deep discounts of regular fees in return for placing the provider in the “network.” Policyholders have to go to a network provider or the insurance company won’t pay.
By way of example, M.D. Anderson Cancer Center. It’s probably the best cancer center in the world. If I get cancer, that’s where I want to go. But many insurance companies have excluded it from their networks so a lot of insurance doesn’t cover treatment and hospitalization at M.D. Anderson.
But what happens if you take sick and go to the emergency room in a network hospital covered by your insurance. That’s fine but the ER doctor is an independent contractor and if he isn’t in network, your insurance won’t pay his bill.
Or, you have an in network doctor doing surgery in a network hospital. If the anesthesiologist isn’t in network, guess what your insurance company will do. Right, refuse to pay him.
There’s ways to fix the problem. For instance, network hospitals can be required to ensure that all independent contractors are part of all of the networks the hospital is in or have immediately available an in network professional. Or, insurance companies can be required to cover claims in emergencies regardless of whether the provider is a network provider or not.
It’s not unreasonable for insurance carriers to establish networks of providers with whom the company has made financial arrangements at least for relatively routine care. But it’s usually in emergencies or special situations like the anesthesiologist who is out of network that causes the problem. I have never heard of a patient choosing his gas passer for surgery or the radiologist to read his X-ray.
People pay a lot for health insurance, they should get the coverage they pay for and they should’t get nasty surprises. How would you like it if you are in a traffic accident that’s your fault and your insurance company refuses to pay the repairs of the car you hit because the owner wants the work done in a dealership body shop rather than some cheap shot chosen by your insurer. You’d be pissed as hell.
As for socialized medicine, that is exactly what the AMA said about Medicare in the 1960s. I haven’t heard of anyone in the US supporting a socialized medical care system where the providers are government employees. Not even Bernie Sanders’ Medicare for all suggests that.
What people are talking about is changing the way the medical care financing system works. And, no one I know of has taken a really good look at what other countries do for health care financing. Most European countries have some form of government-private insurance system and in most of those countries they spend a lot less of their gross domestic product on medical care and get better results on almost every measure.
In Switzerland, for example, insurance companies have to offer a standard plan on a no profit basis. They make their money on add-ons. In The Netherlands, employers are required to provide employees who make more than a certain amount with health insurance that meets certain standards. Employees who don’t make the minimum salary get free or subsidized insurance paid by the government.
No one wants to tackle the big issue on medical care financing. Why does France spend 9 percent of its GDP on medical care versus about 20 percent in the US and still get better results in terms of everything from life expectancy to maternal deaths than the US? I don’t know the answer and I sure don’t want to say France has the absolute answer to anything but someone should be looking and doing the research. A health care system that is 20 per cent of the economy simply isn’t sustainable.
A visit to the emergency room can put you in the poor house!
As for Tom’s comment, it is spot on in all aspects.
My heavens. For the second time in two weeks, Howie and I agree.
Scary.
Sorry Tom, I did not intend to frighten you
We already have socialized medicine.
1) CDC, NIH, and other grants help pay for new drugs and procedures.
2) Most of our hospitals have governmental operating subsidies, such as Certificate of Need funding.
3) Most doctors have had massively subsidized education and training. Yes Med school is expensive but it isnt at cost. Especially residency training. Many doctors have the taxpayers subsidize their workplace (the hospital where they have admitting rights).
Unregulated capitalism only works when Demand is reasonably price elastic. As the price of staying alive goes up….people will still consume the same amount of it. And thats why medical prices keep going up. The market cannot clear because it isnt efficient. Or would only be efficient at astronomical rates.
I say, just allow everyone to buy into Medicare. Allow medicare to negotiate with pharmaceutical companies. Bar doctors who dont accept medicare from admitting/treating rights at taxpayer funded hospitals, bar any NIH, CDC, or other grant money to facilities that dont take Medicare and require insurance companies to assign reserves to insured based upon years paid into the system and be required to send those reserves to Medicare if a current insured leaves them for Medicare.
Well, it’s a good plan except for the fact that Medicare doesn’t actually cover doctors costs. Your idea (which, frankly, is simplistically naive) would effectively give us a single payer government controlled medical system.
But, hey, you’ve go Bernie Sanders on your side!