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A common example of this is when patients go to an in-network hospital but are treated by a provider who is a contractor, not a hospital employee, and not part of the same insurance networks as the hospital.
The Kaiser Family Foundation analysis found about 18% of emergency visits and 8% of in-network hospital stays in Ohio had at least one out-of-network charge in 2017.
Ohio lawmakers that have just returned from the holiday break will grapple with the issue as they consider two different ideas, from both a House and Senate bill.
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The two main options being considered in Ohio, as well as in Congress and in other states, are arbitration and benchmarking.
Employers and insurers generally favor benchmarking, where out-of-network physicians get paid based on a benchmark of the average of what other in-network doctors in the area are paid. This approach is used in California.
Doctors groups and investors in doctors groups tend to favor arbitration, where a third party arbitrator sides with either the provider or insurer. This approach is used in New York.
The arbitration approach, Ohio Senate Bill 198, was supported by the groups like Ohio State Medical Association, American College of Emergency Physicians Ohio Chapter and Ohio Society of Anesthesiologists.
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Dr. Bryan Graham, American College of Emergency Physicians, had testified in November that SB 198 “guarantees that a patient can access life saving care anywhere, anytime, anyplace, by not only removing the fear of surprise billing from patients but also stabilizing the market to ensure these critical access points remain open and staffed appropriately to deliver this care.”
In Ohio, different parties involved in the debate sat down Wednesday and had “very spirited discussion on each side,” said state Sen. Steve Huffman, a Tipp City Republican, who sponsored an arbitration proposal, Senate Bill 198. State Rep. Adam Holmes, R-Nashport, is sponsoring a benchmarking proposal called H.B. 388.
Huffman said they want to find a solution that gets the best out of the House and Senate bills.
“We’re trying to figure out the best of benchmarking and how there can be meaningful arbitration without high costs,” Huffman said.
A bipartisan group of Congressmen are working to include a benchmarking proposal in a May spending package, after lawmakers were unable to get the measure into the year end funding package, The Hill reported. The report said $54 million was spent last year on advertising against the the proposal , spent by Envision and TeamHealth, which are private equity-owned firms that contract with hospitals to staff the emergency room physicians in the hospital ERs.
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Huffman said the federal effort still matters. because the proposals at the Ohio level would only cover 14% of the insurance plans, because the law would not apply to employers that are self-insured.
“Many of us thought it would be solved at the federal level before Christmas,” Huffman said.
Loren Adler, associate director with the USC-Brookings Schaeffer Initiative for Health Policy, who studies surprise billing, had previously reviewed the original arbitration proposal and said it would likely lead to a few percentage points increase in commercial insurance premiums in Ohio.
He had said that’s because the arbitration proposal would help some patients avoid surprise balance bills, but only by greatly inflating those costs and shifting them into everyone’s health insurance premiums because it ties the payment to provider charges. Charges are the sticker price, which Adler said “tend to be extremely high and are largely untethered by market forces.”
When reviewing the House benchmarking proposal, he had said the median in-network rate benchmark is still the “most reasonable benchmark we tend to see out there in viable legislative proposals.” The benchmark proposal still has an arbitration measure, but the proposal is still different than the other bill.
“Arbiters in this instance can only weigh in on whether the insurer accurately calculated their benchmark requirement and can’t just decide that doctors should be paid much more than the benchmark, which is the fear consumer advocates and economists tend to have with the arbitration proposals that typically get bandied about,” Adler said.
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Carly Sternberg, health policy associate with ERIC, which represents large employers, said as Congress continues to debate, states should step in to protect consumers in fully-insured, state-regulated plans, with market-based solutions.
“States that have found positive results in implementing a fair, benchmark solution, like California and hopefully Ohio, are leading the way for federal legislators who are in the process of deliberating the best solutions to remedy surprise bills for ERISA covered plans,” Sternberg said.
Ohio Association of Health Plans, which represents insurers, was a part of the interested party meeting Wednesday and said in a statement that the group “wants to ensure doctors are paid for their services, but we don’t believe these doctors should be financially rewarded for providing undisclosed, out of network services to Ohioans.”
What is “surprise billing”?
When people need medical care, they normally seek providers that are in-network for their insurance. But there are situations where patients are unable to choose which provider treats them.
While patients typically select an in-network hospital and lead doctor for planned hospital care (like a scheduled surgery or the birth of a baby) and sometimes even choose a hospital in emergency situations, they do not choose every member of their care team.
Instead, hospitals direct contractors like plastic surgeons, anesthesiologists, radiologists, and emergency room doctors, to play a role in the care that the patient receives. These providers may be out-of-network even though the hospital is in-network. And in other emergency situations, patients may be taken to the nearest hospital, whether or not that hospital is in-network, and ambulance transportation may also be out-of-network.
Source: Brookings Institute
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