Federal law does not prohibit balance billing in self-funded health plans, which 61% of privately insured employees have.
This article first appeared September 19, 2018 on Kaiser Health News.
By Rachel Bluth
With frustration growing among Americans who are being charged exorbitant prices for medical treatment, a bipartisan group of senators Tuesday unveiled a plan to protect patients from surprise bills and high charges from hospitals or doctors who are not in their insurance networks.
The draft legislation, which sponsors said is designed to prevent medical bankruptcies, targets three key consumer concerns:
- Treatment for an emergency by a doctor who is not part of the patient's insurance network at a hospital that is also outside that network. The patients would be required to pay out-of-pocket the amount required by their insurance plan. The hospital or doctor could not bill the patient for the remainder of the bill, a practice known as "balance billing." The hospital and doctor could seek additional payments from the patient's insurer under state regulations or through a formula established in the legislation.
- Treatment by an out-of-network doctor or other provider at a hospital that is in the patient's insurance network. Patients would pay only what is required by their plans. Again, the doctors could seek more payments from the plans based on formulas set up by state rules or through the federal formula.
- Mandated notification to emergency patients, once they are stabilized, that they could run up excess charges if they are in an out-of-network hospital. The patients would be required to sign a statement acknowledging that they had been told their insurance might not cover their expenses, and they could seek treatment elsewhere.
"Our proposal protects patients in those emergency situations where current law does not, so that they don't receive a surprise bill that is basically uncapped by anything but a sense of shame," Sen. Bill Cassidy (R-La.) said in his announcement about the legislation.
Kevin Lucia, a senior research professor at Georgetown University's Center on Health Insurance Reforms who had not yet read the draft legislation, said the measure was aimed at a big problem.
"Balance billing is ripe for a federal solution," he said. States regulate only some health plans and that "leaves open a vast number of people that aren't covered by those laws."
Federal law regulates health plans offered by many larger companies and unions that are "self-funded." Sixty-one percent of privately insured employees get their insurance this way. Those plans pay claims out of their own funds, rather than buying an insurance policy. Federal law does not prohibit balance billing in these plans.
Cassidy's office said, however, that this legislation would plug that gap.
In addition to Cassidy, the legislation is being offered by Sens. Michael Bennet (D-Colo.), Chuck Grassley (R-Iowa), Tom Carper (D-Del.), Todd Young (R-Ind.) and Claire McCaskill (D-Mo.).
In a statement to Kaiser Health News, Bennet said, "In Colorado, we hear from patients facing unexpected bills with astronomical costs even when they've received a service from an in-network provider. That's why Senator Cassidy and I are leading a bipartisan group of senators to address this all-too-common byproduct of limited price transparency."
Emergency rooms and out-of-network hospitals aren't the only sources of balance bills, Lucia said. He mentioned that both ground and air ambulances can leave patients responsible for surprisingly high costs as well.
Lucia said he was encouraged that both Democrats and Republicans signed on to the draft legislation.
"Any effort at the federal level is encouraging because this has been a challenging issue at the state level to make progress on," Lucia said.
Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.