Lawmakers target 'surprise billing'

Ohio, federal leaders debate arbitration vs. benchmarking.

Political pressure is mounting as both state and federal lawmakers work on a solution to prevent “surprise billing,” which happens when patients are at an in-network health care facility but unknowingly get an outof-network service.

Surprise bills happen when patients are unknowingly seen by an out-of-network provider and then have to pay the difference between what they are charged and what the insurer is willing to pay, which in some cases can be thousands of dollars.

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 who have just returned from the holiday break will grapple with the issue as they consider two ideas, from both a House and Senate bill.

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 groups like Ohio State Medical Association, American College of Emergency Physicians Ohio Chapter and Ohio Society of Anesthesiologists.

Dr. Bryan Graham, American College of Emergency Physicians, 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 congressional group is 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.

Huffman said the federal effort still matters: Proposals at the Ohio level would only cover 14% of insurance plans because the law would not apply to employers who 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 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.”

“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 gets bandied about,” Adler said.

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.