Healthcare industry leaders are speaking out against proposals to use bundled billing to address surprise medical bills, stating that patient-centricity will be more effective.
The push for healthcare policymakers to pass legislation protecting patients from surprise medical bills is essential, but that legislation should not include bundled billing in the emergency department, according to the American Hospital Association, American Medical Association, and Federation of American Hospitals.
In a letter following the April 2 House hearing on surprise medical billing, the three organizations asserted that the medical community must pursue other avenues to remedy the surprise medical billing issue.
“Our organizations support a federal legislative solution to protect patients in these scenarios that limits patients’ cost-sharing obligations to the in-network amount, and prohibits balance billing when the opportunity for health plans and providers to arrive at a fair payment rate is ensured,” the three wrote in a letter to the House Energy and Commerce committee.
Bundled billing in the emergency department would ideally eliminate issues with ancillary providers, such as anesthesiologists or emergency department doctors, testified Christen Linke Young, JD, a fellow at the USC-Brookings Schaeffer Initiative on Health Policy, who was a witness at the House hearing.
Currently, these ancillary providers spur surprise medical bills because there are limited incentives for them to join a payer network. When these providers do join networks, they are able to charge extraordinary prices due to the nature of their work.
“One way to understand these very high in-network rates is that these physician types exploit the fact that they could remain out-of-network to demand very high payment rates when they do go in-network – payment rates more than double what their peer physicians who cannot realistically plan to stay out-of-network receive,” Young said.
A bundled billing program could eliminate this issue by granting hospitals the ability to set charge rates and then reimburse these providers. Hospitals and payers would negotiate a bundled price for emergency department services, and then the hospital would allocate those payments to the services providers involved in an episode.
But this approach is not ideal for the emergency department, AHA, AMA, and the Federation of American Hospitals said.
“This concept may seem simple and straightforward in theory; in reality however, this approach would be administratively complex, fundamentally change the relationship between hospitals and their physician partners, and alone, does nothing to protect patients from surprise bills,” they wrote. “We strongly oppose such a model.”
Bundled payments have been tested by some industry players, including the Center for Medicare & Medicaid Innovation. These tests have revealed that bundled payments are most effective when a clinical care pathway is well-defined and predictable, such as with some joint replacements, the three said.
Emergency care is different because it is unpredictable and involves several moving parts. There is diagnostic care, tests to confirm diagnosis, following treatments, and other interventions to mitigate unexpected bumps in the road to recovery.
In a bundled billing situation, payers are able to transfer their responsibility to pay for these services onto the hospital, which can be financially crippling, the three groups contended.
Instead of implementing bundled billing in the emergency department, AHA, AMA, and the Federation of American Hospitals advocate for better defining of reimbursement rates between payers and providers.
“Surprise bills are a direct result of a lack of negotiated contract between the patient’s insurer and the hospital and/or physicians that provided their care. We support solutions that focus on arriving at a fair payment from an insurer to a provider while protecting patients from the consequences that can arise when an insurer lacks adequate contracted providers.”
AHA, AMA, and the Federation of American Hospitals do agree with several of the other proposals offered at the April 2 hearing. For example, some witnesses proposed arbitration processes that consider both payer and provider rates for certain services. These processes take patients out of the negotiation process and remove their liability for high bills.
“We should remain focused on taking patients out of the middle of standard negotiations between insurers and providers and protecting them from ‘surprise bills’ when they have not had the opportunity to choose who provides their care, while rejecting unproven proposals that would up-end the foundation of relationships that hold the health care system together,” AHA, AMA, and the Federation of American Hospitals concluded.
These types of solutions were on the table at the House hearing. For example, several witnesses advocated for better healthcare transparency by which providers would be required to disclose whether they are a part of a patient’s insurance network before delivering care. This would give the patient the opportunity to select another provider.
In other instances during which patients may not be able to select another provider, healthcare policymakers should prohibit these out-of-network providers from charging patients anything but the in-network reimbursement rates.
Other proposals included setting emergency department prices at 125 percent of the Medicare rate.
Additionally, witnesses agreed that proposals should include all patients with all health plans receiving care at any hospital.
Date: April 08, 2019