SIIA Policy Statement on Surprise Medical Billing:
Protecting Patients, Providing Transparency

Surprise medical billing has become a serious issue for patients and their families, who deserve network transparency and access, appropriate notification and, most importantly, protection from unexpected costs. In many cases of surprise billing, a provider or specialists may not choose to participate in a negotiated, efficient and lower cost in-network option provided by a patient’s insurer. In these situations, the provider may charge a much higher rate than in an in-network setting, thus exacerbating the cost and true surprise of a billing situation. In a self-insured arrangement, where the employer takes on the direct responsibility of providing employee health benefits, these unexpected costs hurt both employees and employers in the form of higher health care costs and overall plan funding. Requiring an employer sponsoring a self-insured health plan – or an insurance carrier in the case of a fully-insured plan – to pay a portion of the unpaid “balance bill” eligible charges is leading our health care system down a path toward unnecessary excess spending.

Focusing policy proposals solely on cost-shifting from the patient to the employer plan, versus addressing the provider cost to charge ratio driving, these high “surprise medical bills” would miss a crucial opportunity to prevent these bills from occurring. Rather, federal policy guidelines should seek a balance while curbing the practice of surprise medical billing for patients in appropriate provider settings.

Our nation’s healthcare system is comprised of unique out-of-network and in-network dynamics. Considering these dynamics, billing practices should provide due notice to patients and strike an appropriate balance between providers, physicians, the self-insured employer, their employees and dependents. In considering the prevention of surprise medical billing practices, the following policy principles can help create a health care environment in which patients continue to receive high quality care while ensuring the transparency and affordability they deserve:

  1. Implementation of Patient Protections to Prevent Surprise Billing Practices

Patients who receive emergency medical and other services can face situations in which they subsequently receive bills that exponentially exceed what the patient’s health plan may pay. To protect patients who are seeking in-network care but are unknowingly cared for by out of network providers, the implementation of patient protections are needed. For instance, the practice of balance billing patients in these types of in-network situations be curtailed. At the same time, the cost of balanced billing should not be put squarely on employer sponsored self-insured health plans at the benefit of providers, specifically out-of-network providers operating within in-network settings.

Such patient protections may take the shape of a variety of federally recognized benchmark payment standards between providers and insured entities, further outlined below.

  1. Approach to Reimbursement – Private Sector Benchmarks

For surprise medical billing in out-of-network situations, a private sector benchmark based on in-median network rates by geographic location is a known and feasible manner for reimbursement. Any benchmark option should avoid offering advantages to a specific private pricing provider. Rather, federal policymakers should consider putting forth a set of multiple option pricing benchmarks requiring out-of-network providers, especially those that choose to operate outside of a particular health plan’s network, to accept amounts made at a fair, reasonable, and transparent level based. This method of assigning a reasonable payment provides for a predictable and understood payment rate for providers, and has shown to be used in state surprise medical bill laws, and more widely in workers compensation fee schedule establishment throughout the country.

In late 2018, Dr. Cassidy (R-LA) and a bipartisan group of Senators introduced legislation that sought a pure arbitration approach to surprise billing. In the spring of this year, the Senate Health Committee passed legislation that focused on a pure benchmark approach based on an in-network median rate. Several weeks later, the House Energy & Commerce (E&C) Committee passed legislation that provided a hybrid approach between the two, creating a benchmark rate up to $1250. All bills for specific services above the threshold of $1250 would qualify for arbitration.

Recent committee discussions have indicated consideration of what is termed a “90-day cooling off period” during which time providers can only arbitrate a single general procedure once every 90 days. This ‘cooling off period’ will reduce the number of cases eligible for arbitration every year, encouraging providers to only arbitrate complex, high profile cases. While such a cooling off-period would work for large fully-insured groups, that would not be so for small and medium sized self-insured groups under 500 employees or beneficiaries where having two types of procedures under a single CPT or medical code would be few and far between.

For this reason, and considering the unique nature of small and medium sized self-insured plans, SIIA supports a carve-out for small health groups under 500 from arbitration, whereby such groups could utilize a private sector benchmark for appropriate provider reimbursement.

  1. Ensuring Transparent & Quality Networks

Patients deserve access to understandable information on how to appropriately identify in-network and out-of network providers within their insurance plan’s coverage. Likewise, medical professionals that choose to remain outside a particular health plan’s network should not be rewarded for choosing to be such. Requiring out-of-network providers, especially those that choose to operate outside of a particular health plan’s network, to accept payment benchmark amounts made at a fair, reasonable, and transparent level based is needed. We believe certain exceptions can be made in instances where a particular provider is excluded from a plan’s network for arbitrary reasons. For example, in these limited cases, any payments of an unpaid “balance bill” could be based on Medicare rates. Focusing the legislation solely on cost-shifting from the patient to the employer plan versus addressing the provider cost to charge ratio driving these high “surprise medical bills” would miss a crucial opportunity to prevent these bills from occurring.

At the same time, insurers should provide updated and accurate information about provider networks, in-network care, as well as clear information regarding out-of-network health care benefits.

  1. Additional Patient Protections

As part of protecting patients from surprise billing practices, federal policymakers should review air ambulance charges in such situations and prohibit air ambulance providers from charging consumers more than in-network costs. This is particularly needed in rural areas.

Prohibit specific providers (those performing anesthesiology, radiology, emergency medicine, or pathology services) from balance billing a consumer for services in cases where the provider is out of the consumer’s network but delivers services at a hospital or ambulatory surgical center that is in the consumer’s network.

Lastly, to safeguard resources and help the patients in the most need, a federal minimum standard billing amount should be established in order to qualify for surprise billing protections, for instance those bills in excess of $5,000.

  1. Provider and Insurer Protections for Patients Deciding to Utilize Out of Network Care

While patients can utilize out-of-network providers of their own choosing, opting out of in-network providers as at their own choosing and insurers should not be penalized because of that choice.