If you’ve ever found yourself unexpectedly in the hospital or the emergency room, you know that sinking feeling in your gut when the bills start to arrive, usually weeks or sometimes months later.
But if you’ve confirmed that the hospital is in your network for your insurance plan, then everything should be covered, right? Wrong. Just because the hospital is in-network doesn’t necessarily mean that all of the doctors involved in your care are in-network as well.
The medical staff at a hospital includes a wide range of specialists (ER doctors, surgeons, hospitalists, radiologists, etc.), each of whom may or may not have a contract with your insurance company. Who provides your treatment, reads your X-rays, studies your biopsy specimen, or assists in your care in any way is largely a function of who is on duty when you arrive, not who is in-network with your insurance plan.
If any of these doctors are out of network, then the insurance company can pay — or not pay — basically whatever it wants for these services and then the patient is billed for the rest. This is essentially how “surprise medical bills” are born. And this has become more common as insurance companies have narrowed their health plan provider networks.
Most doctors want to be in network because it is simpler and easier for the patient. But the only leverage they have in negotiating fair payment with insurance companies is the ability to walk away. You don’t want this because if your insurance plan drops your physician from the network, then you will have to either pay more out of pocket or change your insurance.
And while insurance companies don’t want their networks of providers to be so small that they can’t attract potential customers, they actually benefit from surprise medical bill situations. Most of the time, the patient is not able to choose the doctors involved in the care and doesn’t even know the doctor is out of network until after the fact. By then, it’s too late; the insurance has no incentive to come to the table and negotiate the payment.
Something has to change here, and several proposed solutions have recently been introduced by members of Congress.
The Lower Health Care Costs Act, co-sponsored by Sen. Lamar Alexander, R-Tenn., would put all the power squarely in the hands of the insurance companies by essentially allowing them to set payment rates. If it passes, insurance companies will be incentivized to drop all of their network contracts except the lowest-cost providers so they can use that figure as the basis for physician payment and increase their own profits.
It would actually worsen the problem of narrow insurance networks and most likely make it harder for patients to access the care they need. Some hospital-based doctors, such as radiologists or pathologists, will stop covering hospitals that contract with insurance companies that won’t negotiate with them, and eventually there will be no doctors who are willing to provide essential services at that hospital. Having a local hospital in your insurance network doesn’t really mean much if there are no doctors to staff it.
Fortunately, several alternative pieces of legislation have been introduced in the House, including the Protecting People From Surprise Medical Bills Act, co-sponsored by Dr. Phil Roe, R-Tenn. Like the Senate bill, this plan would protect patients from out-of-network charges, but it would also create an independent dispute resolution process using a third party to determine appropriate payment rates without involving the patient.
It is modeled after a system that has proven to be successful in New York. Doctors prefer this approach because it maintains some balance of power in the marketplace and gives us a fighting chance to get paid appropriately for the services we provide.
Another proposal, the No Surprises Act, is less appealing since it still relies on benchmark in-network rates determined by the insurance company, although recently a provision was added allowing for an appeals process (albeit only for claims above $1,250).
Congress is on a brief recess but will be back in Washington, D.C., in early September to resume this debate. Whatever solution passes should include some means to ensure standards of network adequacy for all health plans so that insurers promising coverage of care are incentivized to negotiate with the doctors who actually provide it.
Eliminating surprise medical bills is a noble goal. But we cannot and will not solve the problem by giving insurance companies more control. Without any checks and balances, such a change would have devastating consequences on the practices of hospital-based physicians and would threaten to further restrict patients’ access to quality medical care.
Dr. Amy Suppinger is a board-certified internal medicine physician with Williamson Medical Group and the regional physician representative on the Tennessee Medical Association Board of Trustees.