Protecting patients from surprise billing—medical bills received from out-of-network providers that were not expected or chosen by the patient—sounds like a no-brainer. After all, unexpected medical bills, including surprise bills, are at the top of the list for Americans worried about unaffordable expenses. Two-thirds of Americans said in a 2018 poll from the Kaiser Family Foundation they were very worried (38%) or somewhat worried (29%) about being able to afford unexpected medical bills. (Sept. 5, 2018; https://bit.ly/3h4GeQW.)
Research has shown that ED visits are particularly fraught with surprise bills. A study found that 20 percent of hospital inpatient admissions that originated in the ED and 14 percent of outpatient visits to the ED led to a surprise medical bill in 2014. (Health Aff [Millwood]. 2017;36:177; https://bit.ly/38niGCV.)
But the issue is complicated. Emergency physicians say the insurance industry has seized on surprise billing as a strategy to cap what doctors and hospitals—emergency physicians, in particular—can bill to the insurance company, not the patient. It's the latest in a series of efforts by insurers to target the ED to reduce costs and improve their bottom line.
Andy Walker, MD, practices emergency medicine in multiple locations in Tennessee and Georgia, and serves as a chair of the American Academy of Emergency Medicine's Government and National Affairs Committee. He said EDs are the wrong villain when it comes to surprise billing.
“We have no interest in price gouging patients for out-of-pocket costs because very few of our patients pay anything out of pocket anyway due to our charity load,” he said. “All we want is that the government, either federal or state, does not prevent insurers from being billed at the usual and customary out-of-network rate. If our out-of-network rates are capped, insurers have no incentive whatsoever to bargain with us in good faith to get us in their networks. This is the only incentive we have left to get a fair rate: to stay out of network and bill at usual and customary instead of their discounted in-network rate. If that goes away, the lopsided relationship we have with the insurers becomes dictatorial. The playing field is already extremely uneven, but if insurers are allowed to cap what we can bill them, then it gets stood on edge.”
Usual and Customary Rates
For some time, the battle over balance billing was waged mainly in the states. “Insurers have had a few victories, but in most states, emergency physicians and hospitals have been able to hold them off,” Dr. Walker said. “And in a few states, like Connecticut, we've had outright victories.”
The Connecticut legislation that took effect in 2017 prohibits health insurers from requiring prior authorization for emergency services and from charging an insured patient more for emergency care from an out-of-network provider than from an in-network provider. Insurers are required to reimburse out-of-network emergency providers at the greater of the in-network rate, the Medicare rate, or the usual, customary, and reasonable rate. The legislation defines “usual, customary and reasonable” as the 80th percentile of charges provided in the same region by the same or a similar specialty, per the FAIR Health benchmarks. (Office of the New York State Comptroller. April 2020; https://bit.ly/34uF2By.)
The battle over out-of-network billing has shifted to Washington, DC, Dr. Walker said. “That's largely because Sen. Lamar Alexander [R-TN] is about to retire and wanted to ‘fix’ this problem before he left office,” he said. At present, at least five bills in Congress—four in the House of Representatives and one in the Senate—would require insurance plans to cover surprise bills as though the provider were in-network and not to charge the patient more than the in-network cost-sharing amount.
But the devil is in the details about how the provider will then be paid. Sen. Alexander's bill (S. 1895) sets the default payment amount for surprise bills at the health plan's median in-network rate, with no independent dispute resolution process. “That would leave the insurers free to set unreasonably low in-network rates for emergency care and emergency physicians with no leverage but to accept those rates,” Dr. Walker said. “About 70 percent of most emergency departments' income comes from the 20-25 percent of patients with commercial insurance. For better or worse, federal reimbursement policies have forced us to shift costs on to the minority of patients who have private insurance. If the insurance industry is successful in making that impossible and they are free to pay whatever they choose for care we've already given, more hospitals are going to close and emergency medicine groups are going to go out of business, and that's the end of the nation's medical safety net.”
The burden of high medical costs from an ED visit should not be on the patient or the provider but the insurer, said Maria Raven, MD, an associate professor of emergency medicine, the chief of emergency medicine, and the vice chair of emergency medicine at the University of California-San Francisco. “Because of EMTALA, we don't know if a patient is out of network when they come to us, and we couldn't tell them even if we did,” she said. “If legislators allow caps on usual and customary rates that out-of-network EDs and physicians can bill to the insurer, and the insurer is offering unreasonable low in-network rates, then we as the emergency providers have absolutely no leverage.”
Emergency medicine's best proactive strategy is to put its weight behind legislation that truly protects patients, Dr. Walker said. He pointed to HR 6910, the ER Hero and Patient Safety Act, a bipartisan bill cosponsored by emergency physician Raul Ruiz, MD (D-CA), and Roger Marshall, MD (R-KS), an OB-GYN. Unlike Sen. Alexander's legislation, the Ruiz bill would not establish a default in-network payment amount for surprise medical bills. Instead, insurers and providers would first engage in negotiations over the payment amount. If they can't reach an agreement, the dispute would go to an independent resolution process that would consider the median in-network payment rate and the 80th percentile of the actual billed charges.
“This gives insurers incentives to get physicians in their network, which most emergency physicians and hospitals want since we get paid more reliably, faster, with less hassle and overhead,” Dr. Walker said. “But insurers have so much power that they demand really steep discounts to get us in network, and then they don't bargain—they just say take it or leave it. This legislation would address that.”
Another strategy that insurance companies had tried to use to reduce payments to emergency departments seems to be on temporary hold, but Dr. Walker said the industry is “very patient, not in a hurry, and has a lot of money. They'll come back and put pressure on this again as well.”
He is referring to insurance company efforts over the past several years, which seemed to have reached a peak between 2016 and 2019, to deny claims for emergency department visits deemed nonemergent. A study about one such coverage denial policy—Anthem's—found that “denial diagnosis visits,” those with ED discharge diagnoses defined by Anthem as nonemergent and therefore subject to possible denial of coverage, shared the same presenting symptoms as 87.9 percent of commercially insured adult ED visits from the nationally representative National Hospital Ambulatory Medical Care Survey ED subsample. (JAMA Netw Open. 2018;1:e183731; https://bit.ly/3h3hGrE.)
“We found that if Anthem's policy was adopted by all other commercial insurers, nearly 1 in 6 ED visits by commercially insured adults would have a nonemergent ED discharge diagnosis and could be denied coverage,” wrote lead author Shih-Chuan Chou, MD, MPH, an emergency physician at Brigham and Women's Hospital in Boston, and his colleagues. “Moreover, in up to 9 of 10 adult commercially insured ED visits, patients presented with the same primary symptoms as the visits that resulted in nonemergent diagnoses that could be denied coverage.”
“At face value, Anthem's policy might make sense. But when you think about how patients perceive ED visits, it's really the opposite of that,” Dr. Chou told EMN. “When patients present to the ED, they are faced with a limited amount of information. They have their own experiences in the past with medical history and then the symptoms they're experiencing. They don't have the diagnosis. They don't know if their chest pain is a heart attack or an anxiety attack or if their belly pain is constipation or a bowel blockage. This attempt by insurers to rely on the results of a complete ED evaluation to determine whether a visit was preventable—it's like 20/20 hindsight.”
National attention to the risks of these policies, including a 2018 investigation from the Atlanta Journal-Constitution and a report by then-U.S. Sen. Claire McCaskill (D-MO), put them on ice, but Dr. Walker believed they could be revived at any time. He said state Medicaid programs had considered similar policies.
“A few years ago, the Washington state Medicaid program was considering doing this, paying a small fee for medical screening and excluding diagnoses they saw as nonemergent,” he said. “Here in Tennessee, Tenncare was going to do it too. They would have paid only a $28 screening fee if we saw a patient with chest pain that turned out to be heartburn, for example. Fortunately, these did not move forward, but there is constant pressure on states to find ways to cut their Medicaid budgets, and constant pressure for private insurers to lower their costs, so we could see these again.”
“Emergency medicine is an easy target because of our lack of leverage,” said Dr. Raven. “We are a unique specialty. We see every single person who comes to our doors, and in big cities, rural communities, underprivileged areas, we are trying to do the right thing and serve our communities. With insurers trying to strap groups financially, this puts us all at risk of closing our doors. We are an interesting separate class of physicians that needs to be dealt with much more thoughtfully.”
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Ms. Shawis a freelance writer with more than 20 years of experience writing about health and medicine. She is also the author of Having Children After Cancer, the only guide for cancer survivors hoping to build their families after a cancer diagnosis. You can find her work atwww.writergina.com.