For a few quick turns of the news cycle back in late March, it appeared the Trump administration may have been resetting its sights on the Affordable Care Act (ACA). But it was soon announced that any attempt at fundamental changes to the act wouldn't take place until after the 2020 elections.
In the meantime, Congress has taken up another hot and more specific topic: "surprise billing," a growing phenomenon that impacts employers and employees alike.
"Employers are deeply concerned about the burden unexpected medical bills place on employees and their families," one witness stated at a hearing held by the House Subcommittee on Health, Employment, Labor and Pensions last month.
Although not required to, many employers pitch in by offering some coverage. Thus, "surprise balance billing is a financial burden on the employer plan sponsors as well as individuals," according to Ilyse Schuman, the health policy chief for the American Benefits Council (ABC), a lobbying group representing employers.
The purpose of the hearing was to collect input on surprise billing to shape future legislation. "Only Congress can fully close the gaps and loopholes that leave patients vulnerable to severe financial distress," subcommittee chair Rep. Frederica Wilson (D-Fla.) stated at the outset of the hearing. Several state insurance regulators have stepped in to curtail surprise billing, but their authority doesn't extend to self-insured employers.
While complex, surprise billing "is one of the rare public policy problems that is both bipartisan and in need of a federal solution," according to the Kaiser Family Foundation. The prospect of an eventual resolution to the problem — even amid partisan rancor in Washington — should be warmly greeted by employers who, as mentioned, are often forced to step into the breach when employees are put in an untenable financial position.
"Surprise balance bills" can crop up when patients:
The bills come as a surprise in these scenarios because employees typically lack any knowledge of the network status of these providers. And even if they happen to possess such knowledge, they can't act upon it during an emergency.
The ACA took a stab at giving patients some protection in this area, but it didn't get very far. Under the Employee Retirement Income Security Act's Section 715(a)(1), which was added by the ACA, employers can't obligate employees to share a greater proportion of the bill for out-of-network emergency medical services than they do for in-network emergency medical services.
But that rule doesn't block an out-of-network hospital from billing the employee for the difference between whatever the employer's plan will pay and the hospital's total charge. The following data collected from several studies presented in hearing testimony puts the issue into context:
"Physician excess charge was higher for specialties in which patients have fewer opportunities to choose a physician or be informed of the physician's network status," according to a study cited by ABC's Schuman.
The crux of the problem is that the volume of service provided by medical specialists like those noted above, and thus their income, typically isn't highly price-sensitive. Those providers' service volume is generally determined by the number of employers and health plans that opt to include a particular health care system or hospital in its preferred network, not by the competitiveness of their fee schedule.
That means that those specialists may see no benefit to signing on to a provider network, so long as they're guaranteed business because of their relationship with a hospital. And hospital systems don't appear to have the leverage to require those specialists to join their provider networks. The same principle seems to hold true for ambulance services.
So, what can Congress do about it? One hearing witness, Christen Linke Young, a health policy analyst with the Brookings Institution "think tank," says at least part of the solution is to "get these types of providers [anesthesiologists, etc.] out of the business of billing directly to patients or insurers … instead, they would be paid by the hospital or other facility in which they practice."
ABC offered several recommendations to Congress, including that it:
Another hearing witness, Frederick Isai, executive director of health care consumer advocacy organization Families USA, urged Congress to, among other things, ensure that reforms be equally beneficial to employees whether they're covered by fully insured plans or by self-insured plans.
In a hint of the larger debate that may come over the future of the ACA, freshman subcommittee member Rep. Susan Wild (D-Pa), posed this question at the hearing: "Isn't the real problem that we've turned over our medical system to private market forces?"
Although the hearing has no immediate practical implications for employers who sponsor health care plans, it does indicate an increased level of awareness of surprise billing. So, while the long-term future of the Affordable Care Act remains unclear, there are still plenty of immediate challenges to overcome.
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