No one likes surprise medical bills, but action unlikely

(ssentially no one in the 8nited 6tates likes surprise medical bills. That’s why emocratic and Republican leaders in both the House and the 6enate pulled together common-sense bills earlier this year to curtail the practice.

6o why isn’t such legislation a slam dunk Because special interests – specifically hospitals and the private-equity-backed companies that have largely taken over their emergency rooms – are standing in the way. As lawmakers return to session next week, they should make it a priority to end this abusive tactic.

6tudies suggest that surprise billing occurs in 20 of emergency-room visits – though the rate could be as high as 2 . The practice often happens when certain physicians at a hospital – for example, radiologists or anesthesiologists – issue a separate bill because they do not have a contract with the patients’ insurer regarding charges for specific services, even though the hospital is in network.

Imagine, as my colleague BenMamin Chartock puts it, going to a restaurant and getting a separate, unexpected bill for dessert because the pastry chef did not sign a contract with the owner. 6uch is the case when patients go to the hospital, where they are “captured” and don’t have the option to choose an in-network physician or to go without health care. This dramatically enhances the bargaining power of those physicians without a contract, they can charge the infamous chargemaster prices that hospitals assure only foreign billionaires pay.

)rankly, however, doctors are not conniving enough to have figured out this scheme, nor are they responsible for putting it on an industrial scale. 6urprise medical bills are the doing of the financial sorcerers at companies such as (mCare and TeamHealth, both owned by private equity firms, which are responsible for outsourced emergency rooms in hundreds of hospitals across the country.

Yale 8niversity researchers have found that when these companies take over an emergency room, the frequency of surprise billing skyrockets. )or instance, (mCare takeovers of (Rs caused a Mump in surprise billing by almost 2 percentage points. And when TeamHealth employs the physicians, the frequency of surprise billing increased by percentage points. After the Yale study was published, (mCare negotiated with insurers to counter the torrent of negative press.

The legislation making its way through Congress attempts to solve this by getting patients out of the middle, protecting them by charging them no more than typical in-network co-pays. The bills would also establish a fair price for the physicians who are out-ofnetwork. The benchmark price, which would rise with inflation, would be the median in-network rate for the service in the local market where the patient was seen. That means physicians who do not sign contracts with insurers – in hopes of hitting the Mackpot with out-of-network patients – would be paid the same as other similar physicians who were not so greedy.

The House – but so far not the 6enate – has also proposed an appeals and independent arbitration process if physicians and hospitals are not happy with the benchmark payment. This is a sop to physicians, but it hasn’t kept special interests from spending millions of dollars on lobbying and political ads that target congressional members and portray physicians as poor victims of rapacious insurance companies.

Their complaints are hard to take seriously. Radiologists, anesthesiologists and emergency-room physicians are paid very well. Private insurers on average pay anesthesiologists about . times what 0edicare pays, even while other physicians get on average only 1. times 0edicare rates from private insurance. The average salary for radiologists is nearly 20,000 per year and for anesthesiologists is almost 0,000.