- - Monday, August 19, 2019

ANALYSIS/OPINION:

Has this happened to you? You visit the hospital for a procedure or perhaps for an emergency. You have insurance and while your deductible is higher than you’d like, you think you’re going to be okay, financially speaking. Then later, when you’re recuperating at home, you get an enormous bill in the mail. Turns out one of the providers who attended to you was “out-of-network.” And you’re on the hook. 

If this has happened to you, you’re hardly alone. A new study out of Stanford University shows that almost 40 percent of people who have visited the hospital between 2010 and 2016 have been stuck with a bill for medical services they believed were covered under their plan.

If you tune out the Medicare For All debate between the presidential aspirants and focus on the debate in Congress, you quickly learn this “surprise billing” issue is the hot button health care issue in Washington. It’s about time. 

While members of Congress from both parties are motivated to fix the problem, they aren’t all on the same page in terms of the solution. 

One measure, sponsored by Sen. Lamar Alexander, Tennessee Republican, would empower the government to set reimbursement rates at levels it deems fair to both providers and the insurance companies. This so-called “benchmarking” approach would inevitably result in putting more control in the hands of the insurance companies at the expense of provider pay, which in turn would inevitably result in fewer providers. 



“This approach would result in an unprecedented transfer of market power to insurers by sanctioning government-mandated price-setting,” argues the American Academy of Orthopaedic Surgeons in a letter to congressional leaders.

Another approach would require all providers to accept in-network rates, even if they are operating out-of-network. It’s not hard to see what would happen in this scenario. Providers would simply stop working on patients who aren’t covered. 

These two approaches have an additional drawback in common: Both would disproportionately hurt rural communities, where most Americans have only one choice for their health coverage, and where many hospitals are struggling to survive. A recent study by Navigant “suggests 21% [of rural hospitals] are at high risk of closing based on their total operating margin, days cash on hand, and debt-to-capitalization ratio. This equates to 430 hospitals across 43 states that employ 150,000 people.” 

If out-of-network providers see their reimbursements slashed, they will be forced to go elsewhere to earn a living. 

There is a third option that makes much more sense. The “STOP Surprise Medical Bill Act” sponsored by Sen. Bill Cassidy, Louisiana Republican, would establish benchmark rates of reimbursement and it would also allow providers and insurance companies to hash out differences before an independent arbitrator. This Independent Dispute Resolution (IDR) approach gives providers a fighting chance against insurance companies and promotes greater cost transparency. 

The approach is already working in the big Democratic state of New York, which has seen a decline in consumer complaints about surprise medical bills since it implemented IDR. It also received the endorsement of the Republican Party of Louisiana, a conservative state. Perhaps that’s why the STOP Surprise Medical Billing Act has broad bipartisan support and a growing list of cosponsors.

Congress should be commended for taking on such a widespread and vexing problem. Let’s hope they do it right and push Sen. Cassidy’s bill through the finish line.

• Robert Graham is the former chairman of the Republican Party of Arizona and served as a senior adviser to the Trump presidential campaign in 2016.

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