I am proud that Texas is one of 25 states that have passed laws to protect patients from surprise medical bills resulting from unexpected gaps in health insurance coverage. But two-thirds of people with private insurance still could receive a surprise medical bill because the federal government—not the state—regulates their health plans.
Texas hospitals applaud the U.S. Congress’ work on a legislative solution to protect patients nationwide from surprise medical bills.
Hospitals, physicians and health plans alike support this work. Everyone agrees that patients should never be surprised by unexpected bills for out-of-pocket costs for emergency or unplanned health care services.
But how to settle the medical bills that arise from out-of-network services without unfairly advantaging health plans or unraveling existing network agreements that ensure patients’ access to essential hospital care is a widely debated issue with significant implications for patients.
Texas hospitals support a fair negotiation between health plans and hospitals for both network participation and out-of-network payment. Whether the process for determining out-of-network payment is arbitration or mediation, it is essential that a legislative solution limits government interference in private negotiation and does not unfairly advantage health plans.
Typically, surprise medical bills arise when patients are treated by an out-of-network provider in emergencies or other situations that cannot reasonably be avoided. Hospitals rarely are out of network. Most often, surprise bills result from care delivered at in-network hospitals by out-of-network hospital-based physicians, such as emergency physicians, anesthesiologists and radiologists.
To resolve out-of-network payment disputes between health plans and hospitals, recent federal solutions propose setting in statute minimum amounts health plans could pay hospitals for out-of-network care. Under these rate-setting proposals, payments for out-of-network providers would be based on the amount health plans pay their network providers in the area.
Texas hospitals oppose this kind of government overreach.
Currently, hospitals engage in private negotiations with health plans to determine whether they will participate in a certain plan’s network and how much the plan will pay for health care services. Hospitals are successful in these negotiations — the vast majority are in-network with all major plans.
Inserting government-set rate parameters into a private negotiation could unravel carefully negotiated networks between health plans and hospitals by disincentivizing health plans from including hospitals as in-network providers and paying them fairly, ultimately limiting patients’ access to care.
If health plans would rather pay hospitals for an out-of-network claim because the government has set that payment at the same or a lower amount than what would be paid for an in-network claim, they have little incentive to negotiate with hospitals to be in-network providers.
A default rate could become the payment ceiling and further disincentivize health plans from offering comprehensive networks with adequate access to physicians and hospitals.
Other federal proposals could limit patients’ access to care by unfairly advantaging health plans in contract negotiations with physicians. Under network matching proposals, the government would require hospital-based physicians to contract with the exact same health plans as the hospital.
Every contract negotiation with a health plan would be a take-it-or-leave-it proposition for physicians. Physicians could choose to accept unsatisfactory contract terms to participate in a health plan’s network or risk losing their clinical practice.
Unilaterally tipping the scale in health plans’ favor could disincentivize physicians from providing care in hospitals.
While the ban on surprise medical billing aims to protect patients with private health insurance, the proposals being discussed in Washington could jeopardize the stability of the health care system and limit access to care for all patients.
Congress should limit government interference in its proposals prohibiting surprise medical bills to allow health plans and providers to privately and independently resolve payment disputes for out-of-network health care bills.
Additional information is available from THA’s Surprise Billing Web page.