WASHINGTON (CN) – House Democrats and Republicans joined forces Tuesday to tackle ways to rein in surprise medical bills that are fueling anxiety about health care costs.
Testifying before a House Education and Labor subcommittee, health care experts told lawmakers during a two-hour hearing that the issue will likely worsen without legislative intervention.
According to a 2018 Kaiser Family Foundation survey, 40 percent of insured adults ages 18 to 64 received a surprise medical bill in the 12 months prior to polling.
The poll also showed that concern about surprise bills topped the list of worries about growing health care costs. Of those polled, half said their bill was under $500. But 13 percent owed more than $2,000.
Two-thirds of those polled said they were either very or somewhat worried about being able to afford a surprise medical bill.
That concern is a valid one, according to Frederick Isasi, executive director of nonprofit Families USA.
Isasi told the Subcommittee on Health, Employment, Labor and Pensions that Americans are more scared now about the cost of health care than their actual health.
Because nearly half of Americans have less than $400 in savings, surprise medical bills can result in missed car payments, a missed mortgage payment, or a dip into retirement savings, he said.
“Families, despite enrolling in health insurance, paying their premiums, doing their homework and trying to work within the system, are being left with completely unanticipated – and sometimes financially devastating – health care bills,” Isasi said. “And this is happening partly – and I want to say this really clearly – because hospitals, doctors and insurers are washing their hands of their patients’ interest.”
Surprise bills happen most often when patients unknowingly see an out-of-network physician that their insurance provider won’t cover. This happens most often when such providers work at in-network hospitals.
According to Christen Linke Young, a fellow with the USC-Brookings Schaeffer Initiative on Health Policy, 20 percent of emergency room visits and 10 percent of hospital stays involve an out-of-network provider. And roughly half of ambulance rides are out-of-network.
Young noted that these types of interactions involved physicians that patients play no role in choosing. She pointed the finger at market failure as the biggest factor underlying surprise bills in these cases.
Emergency doctors and anesthesiologists, she said, receive a steady volume of patients regardless of whether they belong to an insurance network.
“Because volume does not depend on the prices set by providers in these kinds of specialties, going out-of-network frees them to bill patients at essentially any rate they choose,” Young said.
That disparity is reflected in the charges.
Most physicians charge about double what Medicare would pay for the same service. But anesthesiologists and emergency room doctors charge five times the equivalent Medicare payment, Young said.
Ilyse Schuman, senior vice president of health policy at the American Benefits Council, echoed Young.
“This is a fundamental market failure that I believe will only worsen if action is not taken to restore competition and choice,” Schuman said.
Many patients wrongly assume that any services provided by ancillary physicians – like radiologists, pathologists or anesthesiologists – would be covered by their insurance at an in-network hospital.
And patients have little recourse when they get a surprise bill. That’s because they generally sign a contract prior to service requiring them to pay in full. Providers, Schuman said, use that as a basis for surprise billing.
Schuman recommended capping emergency services at out-of-network hospitals at 125 percent of the Medicare in-network rate. In-network hospitals meanwhile need to ensure that their providers will pay an in-network rate.
“That would remove the disincentive for these specialties, these hospital-based specialties, not to join the network,” Schuman said.
Several states, including Texas, California, Florida, New Jersey and New York, have enacted legislation to protect patients from surprise bills, but Schuman said no state has yet developed a comprehensive solution that gets it right for everyone.
Representative Van Taylor, R-Texas, interjected. A perfect solution is not likely, he said. His aim is to get a bill on President Donald Trump’s desk that will realistically address some – but not all – of the problems with surprise medical bills that the president will actually sign.
“The problem is a perfect solution that doesn’t go anywhere is of no help to the people that we’re trying to help,” Taylor said.
Jack Hoadley, a researcher professor emeritus at Georgetown University’s McCourt School of Public Policy, said that New York’s effort, which has been in effect for several years, has resulted in a degree of satisfaction among stakeholders across the spectrum.
“That’s an encouraging sign,” he said.
But similar efforts in Florida, California and New Jersey are too new to determine their effectiveness yet.
“And so that’s really the challenge in trying to learn the lessons,” Hoadley said.