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Analysis

Emergency Care Providers Mobilize as Congress Explores Surprise Billing

By Jack O'Brien  
   September 19, 2019

Emergency providers remain opposed to benchmark rates set to median in-network rates for a geographic area.

Surprise billing is an expensive conundrum for patients, which is one of the few things both insurers and providers agree upon.

According to the Kaiser Family Foundation, just over a quarter of ER visits result in a surprise bill, pushing lawmakers to act on growing consumer concerns about out-of-network billing practices.

In late June, the Lower Health Care Costs Act of 2019, a proposed solution to surprise billing by Sen. Lamar Alexander (R-TN), passed the Senate Committee on Health, Education, Labor, and Pensions. Shortly thereafter, the House Committee on Energy and Commerce (HEC) passed its own legislation, the No Surprises Act.

In mid-July, the Congressional Budget Office estimated that the Lower Health Care Costs Act would save the federal government $7.5 billion over the next decade.

However, as Congress has returned from its August recess, both pieces of legislation now face an uncertain future in the face of multimillion-dollar efforts to stifle the plans.

Related: Payers, Providers Butt Heads on Surprise Billing Solutions

Late last week, The New York Times reported that Envision Healthcare and Team Health, two organizations that staff emergency rooms across the country, were major funders for a new mysterious dark money group producing commercials opposed to surprise billing legislation on Capitol Hill.

The key element included in both the Lower Health Care Costs Act and the No Surprises Act that has driven the opposition is a proposal to have benchmark rates set to median in-network rates for a geographic area.

"Not only will there be decreased access to physicians, but the hospitals are at risk also," Dr. Rebecca Parker, chief medical affairs officer at Envision Physician Services, a subsidiary of Envision Healthcare, and former president of American College of Emergency Physicians (ACEP), told HealthLeaders. "[For] any hospital that is in that safety-net [space], barely making it, if those rates gets dramatically cut, the hospitals will have to supplement and hospitals will close."

This week, leaders on the HEC announced a bipartisan investigation into KKR & Co. Inc., Blackstone Group, and Welsh, Carson, Anderson, & Stowe, the private equity firms that own Envision and Team, regarding their role in surprise billing activities.

"We are concerned about the increasing role that private equity firms appear to be playing in physician staffing in our nation's hospitals, and the potential impact these firms are having on our rising healthcare costs," Reps. Frank Pallone (D-NJ), and Greg Walden, (R-OR) wrote in a statement.

What's at stake for providers?

Parker said she takes issue with setting the benchmark rate based on median in-network rates in a geographic area, arguing that it will provide health insurers with a cap when negotiating with providers.

"Our concern is that if you set that as a rate, what we'll see is everyone that's above that rate will have their contracts cancelled," Parker said. "The insurance [companies] will start to come back with lower reimbursement [rates] and the median network rate becomes the ceiling." 

Emergency room providers remain concerned about the potential unintended consequences of Congress passing such legislation, such as limited healthcare access for patients and hospital closures in vulnerable areas.

"We're in a sort of scary time, potentially, on the federal level," Parker said. "The healthcare system is flawed and we have work to do, but there are potentially better ways to do things."

While many states have taken action on surprise medical billing, Parker says emergency physicians prefer how New York state has approached the issue with its independent dispute resolution (IDR) process, or 'baseball-style' arbitration.

Baseball-style dispute resolution allows patients who receive a surprise medical bill to have their insurers pay providers and enter into the IDR process if the cost is either too high or too low, with the patients spared of any responsibility.

According to ACEP, there were 7.5 million eligible emergency claims in New York state in 2018, but only 849 went through the IDR process.

In 2019, several other states have taken a different approach to the issue.

Washington passed a proposal that will limit the amount an out-of-network provider can be paid by an insurer to a "commercially reasonable" amount, effective at the start of 2020. 

Meanwhile, Texas Governor Greg Abbott signed SB 1264 into law in June, which prevents surprise medical billing for patients in situations where they have no choice which provider they see and establishes an arbitration process under state regulatory authority.

Juli Forde, chief marketing officer at Gryphon Healthcare and an ACEP member, told HealthLeaders that another issue emergency providers have with laws passed in several states is that the statutes do not define 'usual and customary'—the fee that an insurer deems reasonable for a medical procedure. 

Forde said that insurers would control the median in-network rate and emergency providers would experience further erosion of reimbursement rates, adding that some markets are currently facing "unsustainable" circumstances.

"We are completely on board with the idea that the patient should be out of the middle," Forde said. "But we advocate that all of these legislative efforts should be tied to a minimum payment standard, an independent database, or the minimum payment standard to a percentage of Medicare based on the past year." 

Related: 'Network Matching' Offers Surprise Billing Solution

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.


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