The Surprise Medical Billing Epidemic: Does a Magic Fix Exist?

What is Surprise Medical Billing?

Surprise medical billing occurs when a patient with insurance receives medical care from a provider who isn't contracted with that patient's health plan for services the health plan would normally pay for. It occurs in situations where the patient fairly assumes that the provider would accept a payment from the health plan, and it's more common than you might think. It often happens when patients receive emergency care and cannot choose the hospital or ambulance service. It also happens when they get care at a hospital that is in their insurance network but in which the specific physician caring for them (often specialists such as anesthesiologists or radiologists) is out-of-network. Despite a patient's best efforts or intentions, they can get ambushed with these unforeseen charges, which for many, can lead to severe financial distress and anxiety. A recent Kaiser Family Foundation survey found that more than 3% of all people with insurance will receive a surprise medical bill in any given year. In ER cases, the average bill that the patient is stuck with is more than $3K. That's a lot of people suffering a great deal of financial hardship in any given year. Over the span of a lifetime, almost everyone is likely to get hit at least once.

What's being done to fix the issue?

The health care industry agrees that this is a major issue, but providers and health plans are in disagreement on how the solutions should work. Each stakeholder believes that the primary onus is on the other and this disagreement has led to government intervention.

Many states have begun addressing the issue of surprise medical billing but results have been mixed and incomplete in some cases due to a lack of authority on self-insured plans. Nationally, Congress has been working on several different bills to address the issue and is currently in the process of combining those bills to gain consensus. While there is bi-partisan support on the issue, there are specific differences in the solutions including payment resolution process and payment benchmark standards. The aforementioned private sector is wary of potential Congressional regulation and lobbying efforts are in full force.

President Trump has stated that fixing Surprise Billing is one of his major priorities and a set of guiding principles was released by the Administration in May. In an executive order released on June 24th, the President further instructed Health and Human Resources to submit a report, within 180 days of the order, with additional steps the Administration can take to address the issue. Even before the new rules are released and finalized, the private sector (health plans, patient advocates, and provider trade groups) has an opportunity to try and fix this problem.

What can health plans do unilaterally on this issue?

The patient is caught up in the middle of these conflicts. In advance of the big steps needed for health plans to solve the problem, there are some simple things that can be done to ensure members have a seamless customer experience.

  1. Map out the member touch points in a common surprise billing case.
    • What questions did the member ask or not ask when seeking care?
    • What information was or was not provided every step of the way?
    • Who provided the information?
    • Was it accurate or misleading?
  2. What are the hot-spots in surprise billing?
    • Who are the providers creating surprise bills?
    • What are the barriers to contracting?
      1. Will the provider not contract?
      2. Is the provider demanding too much payment?
      3. Is the provider of dubious quality?
  3. What factors might reduce surprise bills?
    • Contract with uncontracted providers?
    • Change of internal payment policy rules and restrictions?

Collecting and analyzing data not only helps with the root-cause analysis but also provides opportunities to increase transparency. There are ways to improve the policies, processes, and systems of the health plan and mitigate and minimize the effect of surprise bills.

Receiving a surprise bill adds significant stress to an already stressful situation. The question to ask is, "how can the health plan guide the member through the resolution process with care and kindness?" The worst thing that can happen is the member gets tossed back and forth between the health plan and the provider with no resolution or answers. When this happens, more often than not, the health plan gets blamed. Health plans have an opportunity to take a leadership and advocate role on this issue that can create real differentiation in the market.