It’s called “surprise billing.” Here’s a typical scenario: A patient presents to a hospital’s emergency department and requires a surgical procedure. The hospital and surgeon are in-network with the patient’s health insurance. It appears that insurance pays for all the hospital-related charges minus any deductibles and co-pays. All seems fine.
However, weeks later, the patient receives unanticipated separate bills from the emergency room physician, the anesthesiologist, the radiologist and the pathologist, all of whom are out-of-network physicians working in the in-network hospital. The patient is responsible for these charges above what little insurance may have paid. Surprise!
Recently, a family member necessitated a series of expensive procedures at an Indianapolis hospital. The centers performing the procedures, although located in the hospital, were private entities under a contracting agreement with the hospital. I inquired with the centers if they were in-network. They had no idea. I called several hospital departments. No clue. The hospital told me to inquire with the insurance company, which also had no idea. The insurance company told me to ask the hospital.
Wouldn’t it be reasonable to anticipate that the hospital where the procedure is taking place would know if their contractors and physicians are in-network? How about a requirement for agreed-upon out-of-network hospital-related reimbursements between insurance and providers?
Past attempts to correct this problem legislatively in Indiana have been unsuccessful at the expense of Hoosiers seeking medical care. Legislation this year attempts to correct an essential aspect of the problem: patient responsibility for additional out-of-network charges since these providers are commonly paid deeply-discounted insurance rates. Although the patient would be held harmless for charges that exceed the in-network amount, the bills do not contain protections against insurance company non-payment or provider-balance billing up to the in-network amount. The patient is still stuck with a surprise bill.
Resolution of out-of-network charges should be solely between insurer and provider. The bills, however, do not include a mechanism by which the dispute is resolved. Surprise billing was addressed previously in the General Assembly’s Public Health Interim Study Committee, of which I am a member. The clear committee recommendation was to create an arbitration procedure to settle these disputes utilizing an independent review organization.
The medical community favors the very successful and cost-saving New York “independent dispute resolution system” that encourages negotiation to a mutually agreeable compromise. If no resolution can be achieved, an independent arbitrator will pick either the offer from the insurance company or the provider. There is no middle ground, so proactive compromise is incentivized. I would think this free-market approach should appeal to the conservative-minded Indiana Legislature.
The insurance industry supports a predetermined median payment set by regulation based on in-network rates that are already deeply discounted. The insurance industry would be in a position to unreasonably drive down provider reimbursements even further. This would only end in provider dissatisfaction.
Without a negotiated resolution to these payment disputes agreeable to both insurance and provider, the cost of health care will increase and the numbers of willing providers and patient access to care will diminish.
This problem has languished for too long. It’s time for a legislative fix.•
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Feldman is a family physician, author, lecturer and former Indiana State Department of Health commissioner for Gov. Frank O’Bannon. Send comments to ibjedit@ibj.com.
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