Austin American-Statesman | Ted Shaw | April 15, 2019
Patients should never be surprised by unexpected bills for out-of-pocket costs for emergency or unplanned health care services.
That’s something health plans, hospitals, physicians and lawmakers agree on.
Unfortunately, in Texas, many patients are experiencing that financial surprise after a hospital stay. Typically, these bills come from hospital-based physicians, such as anesthesiologists, emergency room physicians and pathologists, who care for hospitalized patients but do not work for the hospital. These physicians negotiate their own contracts with health plans, and sometimes the physician and the hospital do not share the same insurance contract, which means a patient can receive in-network hospital care but the physician component of that care is out-of-network.
To some, that is a bug in our health care system. But, it actually is a long-standing component of the health care system in Texas that has a strong legal prohibition against the corporate practice of medicine and employment of physicians by hospitals.
Hospitals themselves are rarely out-of-network. Yet, they recognize that surprise billing is a practice that should be eliminated. Receiving an unexpected bill, and the shock, distress and anxiety that it can cause undermine a patient’s road back to good health. And it contravenes the covenant that hospitals and their care providers forge with their patients to first and foremost, do no harm.
Several lawmakers in Austin from both sides of the aisle currently are working together on legislation to ensure patients are not financially crippled by unexpected medical bills. They are to be applauded for this work, and hospitals unequivocally support protecting patients.
But, as with any policy solution, even the most well-intentioned, there can be unintended consequences if the complexities and full scope of the problem are not fully understood.
The proposed legislative solution currently being debated would require hospitals and physicians to enter into a “baseball-style” arbitration process with a patient’s health plan to settle on a payment amount for an out-of-network health care claim. It also would give the government authority over the acceptable payment amounts. The arbitration requirement would replace the current system of mediation where the Texas Department of Insurance works with the parties to settle on a payment amount. Under mediation, the government does not set parameters for payment amounts and allows each party to negotiate towards a compromise.
Arbitration works differently. And it would not work for hospitals.
It would not work for hospitals because it could undermine hospitals’ ability to negotiate with health plans to be in-network providers. The proposed policy actually could have the very opposite effect of what it is trying to accomplish. If health plans would rather pay hospitals for an out-of-network claim because the government has set that amount lower than what would be paid for an in-network claim, they have little incentive to negotiate with hospitals to be in-network providers.
Narrow insurance networks for hospitals are a relatively new phenomenon and are mostly limited to Obamacare plans. These plans have not worked for patients and have impeded access to care. They are a cautionary tale to heed as we work toward a patient-friendly and free market solution to surprise billing.
As with everything in medicine and health care, a one-size-fits-all approach isn’t the best or most effective remedy. Arbitration of out-of-network claims may work for physicians and be an appropriate tonic for the challenges they experience. But it isn’t a cure for hospitals. And it might very well end up being bad medicine that makes a problem worse.
Precision, targeted solutions are the future of medicine. And they’re what is needed for policy as well. Texas hospitals support protecting patients from surprise bills and a fair and balanced process of mediation.
Shaw is president and CEO of the Texas Hospital Association.