Doctors just want to get paid, but agreeing on a fair price is the trick
AUSTIN — Doctors just want to get paid.
That’s been the refrain since I wrote a column blasting physician groups that operate emergency rooms and then choose to remain out of the hospital’s insurance networks. Some groups do this to charge higher rates, and when insurers don’t pay them, they demand payment directly from patients, a process called balance billing.
This business strategy begs the question, what is a fair payment? And whenever you dig deep into the problems with America’s health care system, it all comes down to this question.
After reading my colleague Jenny Deam’s investigative story about balance billing, titled “Blindsided,” I called ER doctors who intentionally balance-bill highly skilled price gougers, which enraged them. They pointed out that federal law requires them to evaluate and stabilize every patient, regardless of their ability to pay. They said that if an ER doctor thinks an insurance company’s payment is insufficient, then they should bill the patient for the balance that evil insurers won’t pay.
Health insurers, though, say they have a duty to limit how much they pay for doctors’ services, because that’s the only way to slow inflation on premiums. When a patient wants the insurer to pay the balance bill, that patient is complicit in driving medical inflation.
Therefore, when doctors send big bills and insurance companies refuse to pay, and patients get stuck with a balance bill, the patients complain to their local lawmakers.
“This whole system seems to be upside down on all sides. That’s what’s so frustrating to me,” a visibly irritated Rep. Larry Phillips, Republican chair of the Texas House’s Insurance Committee, said at a Dec. 6 hearing. “Everybody in this room is necessary for us to have successful health insurance and health care. We just have to figure out how to get that done.”
State regulators and advocates
for doctors, insurers and patients were waiting to testify before the committee, prepared to blame the other guy for the high cost of health care. They came with statistics ripe for manipulation and misrepresentation, ready to baffle even well-informed observers with the health system’s intricacies and quick to deny the outsized profits most of them enjoy.
“Insurers are offering physicians unacceptable take-it-or-leave-it reimbursement deals that are so low that providers in hospitals are increasingly forced to practice out of network,” said Michele Kimball, CEO of Physicians for Fair Coverage, a doctors’ advocacy organization.
Kimball said the solution is for Texas lawmakers to limit a patient’s cost to whatever he or she would have to pay for an innetwork doctor, and then establish a minimum billcharge payment standard based on a database created by a nonprofit called FAIR Health. FAIR Health collects billing data, not reimbursement rates, from doctors who volunteer to share it.
In return, Kimball said, doctors would agree to mandatory dispute mediation with insurers, and a ban on balance billing, ending patient complaints.
Not so fast, said Jamie Dudensing, CEO of the Texas Association of Health Plans.
“When you have that bill-charge payment standard, you see more claims go out of network,” she told Phillips, because FAIR Health is based on what doctors want, not what they are paid. “If 50 percent of the providers in Texas increased charges by 50 percent, that would show up in the FAIR Health data the next time. There is nothing that controls that inflation, and you turn us into their personal ATM machines.”
Consider a doctor’s bill for a high-severity ER visit that requires urgent evaluation. Medicaid will pay $80 for that service, Medicare pays $117, Texas workers’ compensation insurance pays $185, and average in-network insurance pays $556, according to aggregated claims data. But according to FAIR Health, the average doctor’s charge for that billing code is $908.
If the FAIR Health rate were guaranteed, insurance premiums would shoot up, something that patients would find even more frustrating.
One might reasonably ask doctors to show what a procedure actually costs, and then add on a reasonable profit margin. One might ask an insurance company to reveal how it calculates in-network rates. But those are the most closely guarded secrets in health care.
Phillips says he is reluctant to intervene, preferring to allow participants to duke it out in the marketplace. But New York lawmakers have effectively banned balance billing, ordering doctors and insurers to argue over bills. Florida guarantees doctors the greater of the Medicare rate, the usual and customary rate for that community, or a negotiated amount. Connecticut declared balance billing an unfair trade practice, forcing doctors to take in-network rates.
Doctors and insurers are never going to work this out themselves, and both sides use patients as pawns. But as helpless as patients may feel, power really is in their hands to demand that their elected officials fix this whacked-out system. Chris Tomlinson is the Chronicle’s business columnist. chris.tomlinson@chron.com twitter.com/cltomlinson www.houstonchronicle.com/ author/chris-tomlinson