Across Pennsylvania today, there is an all-too-common practice that is straining family budgets, undermining doctor-patient relationships, and causing many people to delay getting the health care they need. It’s called surprise medical billing.
Surprise medical bills arise when patients unexpectedly receive care from a doctor or other medical professional who is not in their health plan’s network. In most instances, getting out-of-network care is unavoidable for the patient, who may be dealing with a medical emergency, undergoing surgery, dealing with a stressful illness or injury, or following the recommendation of their trusted doctor when getting lab work or a diagnostic test.
In such cases, the patient ends up with a bill for the cost of care that wasn’t covered by their insurance. The amount of these bills can range from a few hundred dollars to thousands of dollars. Many times, the patient is not aware of this charge until the bill hits their mailbox. It often leaves them shell-shocked, struggling to find a way to pay the bill and questioning their faith in the health-care system.
Surprise medical bills are not rare occurrences. Nearly 1 in 3 Pennsylvanians are hit with surprise medical bills in a year, and most don’t know where to go to resolve the issue. State Rep. Tina Pickett outlined just a few instances of surprise medical billing when she introduced a bill to end it last year: The patient from State College surprised by a $2,000 bill for blood tests taken at an in-network hospital but sent for analysis at an out-of-network lab. A Lancaster patient who was billed $1,300 for an out-of-network anesthesiologist during a surgery performed by an in-network surgeon in an in-network hospital. A mother in Scranton confronted with a $750 charge when complications during delivery of her baby required the services of an out-of-network neonatologist, even though the delivery occurred in an in-network hospital with an in-network OB/GYN.
That legislation, the Surprise Balance Billing Protection Act, or House Bill 1862, was voted unanimously out of committee and is awaiting action on the House floor. It is a bipartisan compromise that protects patients from surprise medical bills while paying providers fairly, maintaining patients’ access to their doctors, and controlling premiums and out-of-pocket costs.
While everyone agrees that something should be done to protect patients, some provider groups want to replace Pennsylvania’s proposed system for paying providers fairly with a system of “baseball-style” arbitration, which would allow providers to dispute any payment made by health plans and do so in a way that could drive up costs.
It’s important to ensure that any consumer protection does not come at the cost of increased premiums or out-of-pocket costs. Repeated studies have shown that relying on arbitration can drive up health-care costs overall, meaning that patients pay more in the long term for their care. In New York, where baseball arbitration is used to resolve surprise medical bills, a recent Brookings Institute report shows that the model has resulted in very high out-of-network payments to providers, which in turn contributes to higher premiums and out-of-pocket costs for people in that state.
This is echoed by a recent study by the nonpartisan Congressional Budget Office (CBO), which looked at a model similar to the one proposed in Pennsylvania and found that it would reduce health-care premiums by 1 percent. This is not the first time the CBO has found Pennsylvania’s proposed model to be beneficial. Earlier this year, it looked at a similar proposal in the Senate and concluded the net effects “would be lower insurance premiums.” In contrast, a preliminary CBO report on a different proposal that would include baseball-style arbitration found that it would add $1 billion in new administrative costs alone.
Some providers have suggested that, without arbitration, insurers would be incentivized to drop them out of their network. These concerns are unfounded. California enacted a law in 2017 to end surprise billing using an approach similar to Pennsylvania’s House Bill 1862. Two new reports, including one from state regulators, show that the law is working to protect patients and has not produced the kind of disruption that opponents predicted. In fact, one of the studies found a 16% increase in doctors’ participation in health networks across all specialties since the law took effect. In Maryland, another state to implement a similar approach to Pennsylvania’s, the Maryland Healthcare Commission found no evidence that provider participation in networks had declined.
We must keep the focus on patients and their families and protect them from unfair and financially devastating medical bills, while ensuring they don’t pay the price in higher premiums or out-of-pocket costs. Pennsylvania House Bill 1862 accomplishes that by establishing a fair and transparent process for paying providers while not increasing costs of health coverage. It is poised for passage in the state legislature. As lawmakers quickly wind up their work for the year, they need to pass this important patient protection law so there are no longer any surprises for Pennsylvania consumers.