by Virginia Delegate Lamont Bagby
Surprise medical bills have long been a painful and unwelcome burden for Virginia patients. These unwelcome expenses commonly occur when patients receive medical care from an out-of-network healthcare provider. This can happen in a number of circumstances, such as a visit to the emergency room or even when an out-of-network doctor or diagnostic is part of the care plan for surgery at an in-network medical facility.
Patients pay their insurance premiums, expecting to be covered in these cases. Instead, the insurance company refuses to pay for the cost of care and passes it directly onto the patient. Patients recovering from surgery, a medical emergency, or any number of other medical issues receive the bill in the mail weeks later. This is the sign of a broken system and it needs to be fixed – the right way.
As a Member of the Virginia House of Delegates, I co-patroned legislation to solve this problem at the state level by removing patients from the middle of these billing disputes and directing insurers and healthcare providers to reach an agreeable reimbursement rate for the care provided. That legislation provides real relief to patients, but it only applies to healthcare plans regulated by the Commonwealth of Virginia. To protect every patient, we need a federal solution as well.
Fixing the problem is more important now than ever. With the coronavirus pandemic still escalating throughout Virginia and across the country, patients need to be able to get medical care if they get sick. With the nation in the throes of an unprecedented health emergency, insurance companies announced they would continue surprise billing for COVID-19 patients. That is unconscionable and the surest sign yet that the problem has spiraled out of control.
Insurance companies are responsible for surprise medical bills. Giving them even more power over patients, doctors, and healthcare choices is the worst solution on the table. But somehow, this idea has gained real momentum in Congress. Under the proposal endorsed by the big insurance companies, insurers would only have to reimburse for out-of-network care at the median in-network rate for their network.
That gives insurance companies the ability and the incentive to manipulate their rates, set their own prices, and maximize their financial gain. Unsurprisingly, this is a terrible deal for patients. It could cause doctor shortages, hospital closures, narrower coverage networks, and more out of pocket expenses.
Some lawmakers lobbied hard to have this language written into the recent emergency coronavirus legislation. The very possibility that we would have made it more difficult and more expensive for patients to receive care during this pandemic is unacceptable. Meanwhile, doctors and other healthcare professionals are on the front lines of the crisis, sacrificing their own health to care for others. Adopting the insurers’ so-called solution now would have been the equivalent of cutting pay for first responders after 9/11.
There’s a better way forward. The legislation I co-patroned created an arbitration process to help negotiate out-of-network payments between doctors, hospitals, and insurers. It’s similar to a model already working in numerous states, including Texas and New York. A bipartisan group of lawmakers in Congress has introduced legislation based on this idea. At its core is a system called independent dispute resolution (IDR), which fundamentally protects patients from surprise bills and creates an arbitration system similar to the one in my own bill.
A federal bill with real, meaningful IDR is the best way to hold insurance companies accountable for surprise medical bills. It’s a fair and proven system that protects patients and does not give outsize power to either party in a billing dispute. It avoids doctor shortages and hospital closures – a necessity even in the best of times, but especially now. A New York Department of Financial Services report found that it saved patients more than $400 million, decreased out of network billing by 34 percent, and drastically reduced consumer complaints about surprise bills.
Unexpected healthcare costs can be financially disastrous for many families. Insurers compound the problem when they refuse to pay for care. Now more than ever, patients need to know they can see a doctor when they need one – without a surprise bill showing up later.