LinkedIn | Stephanie Limb | April 17, 2019
Yesterday afternoon, the Texas Senate passed a bill, almost unanimously, to protect patients from unexpected health care bills when they unknowingly receive care from an out-of-network provider. This is a huge victory.
What's not cause for celebration, however, is their overreach into the free market. The bill, which now makes its way to the Texas House, would replace the current process of mediation with binding arbitration as the process by which health plans and health care facilities negotiate a fair, reasonable and mutually acceptable payment amount for out-of-network health care services.
As senators themselves acknowledged by voting for an amendment to the bill that would allow the state employees and teachers health care programs to retain mediation, requiring arbitration will drive up health care costs. For everyone.
In addition to increasing health care costs, binding arbitration will not work for Texas hospitals, and, more importantly, will not work for patients. Today, Texas hospitals are nearly always in-network, and they would like to remain so. Arbitration has the very real potential to disrupt negotiations between health plans and hospitals to be in-network providers. If the in-network reimbursement rate is too high compared with what could be paid to an out-of-network facility as determined by binding arbitration, health plans will have less incentive to keep hospitals in-network. The consequence for all Texans will be less choice of in-network health care facilities and, ultimately, less freedom of choice of where to receive health care services.
Lawmakers can ... and should ... protect patients by eliminating surprise billing for out-of-network health care services. But, they also need to protect patients' freedom of choice and their pocketbooks by not introducing the variable of arbitration.
Limb is the vice president for advocacy communications at Texas Hospital Association.