Despite rising health insurance premiums, patients across the country continue to find themselves receiving surprise medical bills, while big insurance companies reap record profits. That is why it was initially encouraging to hear that Senators Lamar Alexander (R-TN) and Bill Cassidy (R-LA), who had previously laid out two very different proposals to address surprise medical billing, announced they have reached a compromise on the issue. While their efforts should be applauded, healthcare providers have significant concerns about their newest proposal.
America’s front-line doctors have been fighting the COVID-19 pandemic for months, and they will continue to do so well into 2021. Unfortunately, this so-called compromise puts both doctors and patients at risk by continuing to rely on a “benchmark” or government rate-setting solution that would lead to doctor shortages and hospital closures at the worst possible time.
Congress has been debating a legislative fix to surprise billing for more than a year. Sen. Alexander has been pushing for a government rate-setting solution that gives health insurers one-sided power to set their own prices by paying doctors a “median-in-network” rate. Meanwhile, Sen. Cassidy has supported an independent dispute resolution (IDR) mechanism which brings insurers and providers to the negotiating table to work out fair payments with arbiters. A fair and accessible IDR system takes patients out of the middle of disputes by forcing insurers and providers to negotiate fair reimbursements. These negotiations are based on previous contracting history, in-network rates for a given geographic area, and other reasonable factors. IDR has been successful at the state level in places like New York and Texas.
As an emergency physician and former president of the Tennessee chapter of the American Academy of Emergency Medicine, I have warned lawmakers about the dangers of rate-setting — and make no mistake, this “compromise” is a thinly disguised rate-setting bill. Under this system, insurers are incentivized to cancel their contracts with doctors in order to drive down the median in-network rate for reimbursements. The Congressional Budget Office calculated that Sen. Alexander’s rate-setting proposal amounts to a 20% pay cut for physicians, whether they are in or out of network.
The “compromise” bill explicitly writes rate-setting into law for a full year before its watered-down IDR system even takes effect. After IDR kicks in, the law creates massive hurdles for doctors to receive fair payments for the critical care they provide patients.
Under this proposal, arbiters must first consider ‘in-network’ rates when making judgments This would allow insurers to game the system by kicking doctors out of their networks to artificially reduce the in-network rate. The bill also applies the median-in-network rate as the initial interim payment, forcing rate-setting on doctors at both ends of the process. At the end of the day, this proposal still amounts to a massive pay cut for front-line providers, which would lead to doctor shortages and hospital closures in vulnerable rural and under-served communities.
A recent study from the healthcare consulting firm Guidehouse found that 19 rural hospitals across Tennessee are at high risk of closing. This amounts to 68% of all rural hospitals in the Volunteer State, which is the highest percentage of rural hospitals at risk of any state in the nation. Rural physicians and patients here in Tennessee and in many vulnerable communities across the country cannot afford this so-called compromise.
As a doctor, I appreciate that Congress is still working to pass a surprise medical billing solution that protects patients, holds insurers accountable, and preserves access to care. Unfortunately, the Alexander-Cassidy “compromise” accomplishes none of those goals.
Lawmakers should push for a true IDR system that takes patients out of the middle of disputes, incentivizes insurers to maintain adequate networks, and directs arbiters to give equal weight to all payment factors. Doctors should also be able to access IDR as soon as the law is passed, instead of being forced to deal with insurance companies that will use rate-setting to game the system in their favor as they threaten access to care.
Sen. Cassidy was right at the outset. A true IDR mechanism protects patients and doctors. Congress should go back to the drawing board to get this policy right. America’s front-line doctors and the millions they care for deserve it now more than ever.
Dr. Andy Walker is a Tennessee-based emergency physician, former member of the board of directors of the American Academy of Emergency Medicine, and former president of the Tennessee chapter of AAEM.