Big lobbies clash over surprise bills
Insurers, hospitals, doctors in Pa. spar over protection from huge out-of-network charges
More than four years after state lawmakers set out to help Pennsylvania consumers hit by surprise medical bills, no laws have been passed and progress has been hampered by behindthe-scenes battles amid powerful, competing interests.
Groups near the center of the scrum in Harrisburg are insurance companies, physicians and other providers, and hospitals.
“It is a big money battle between heavily vested interest groups,” said state Rep. Eric Nelson, a Westmoreland County Republican who sits on the House Insurance Committee. “They are all some pretty powerful groups.”
At the federal level, the
White House signaled within the last week it would endorse an emerging bipartisan agreement that would take steps to limit surprise medical bills, although follow-up on that agreement is not certain.
In Pennsylvania, lawmakers have filed legislative bills, held hearings and issued many expressions of sympathy for consumers. There is loose agreement that people should not have to pay “surprise balance bills” from providers.
One key disagreement involves finding an alternate way to pay those providers. Beyond that, there is even disagreement about whether surprise medical bills actually are a problem in
Pennsylvania.
A typical scenario happens when a patient gets emergency room care that is “in-network” for the patient’s insurance company. Then, in the same visit, the patient unknowingly receives other care — anesthesiology, perhaps, or testing — from providers that are “out-of-network” and hence generates little payment from the insurer.
Then, the bill arrives in the patient’s mailbox.
A Pike County man who suffered heart failure told lawmakers at a public hearing in the fall of 2015 about how his insurer covered only $3,600 of a $32,325 bill from a heart surgeon.
Pennsylvania Insurance Commissioner Jessica Altman told lawmakers this year about a woman who got bills for more than $83,000 after complications arose following delivery of a baby. Still another consumer, she said, was billed more than $3,800 after taking his son to an emergency department with a severe hand injury.
Insurance companies say they do not see it as a major issue.
”We think maybe the occurrences of this happening is less than what we might hear about in the media,” Arielle Chortanoff, of Independence Blue Cross, told lawmakers this year.
At the same meeting with lawmakers, Insurance Federation of Pennsylvania CEO Samuel Marshall said such billing “isn’t that widespread in Pennsylvania.” The federation’s membership represents half the premium volume written in Pennsylvania.
Douglas Furness of Capital Blue Cross said, “It is not an issue we see a lot of.”
State Rep. Anthony DeLuca, an Allegheny County Democrat and minority chair of the Insurance Committee, challenged that contention.
“Has there been a study?” he asked Marshall during the meeting. “Because a lot of people I know just go on and pay it.”
Patrick Keenan, policy director for the Pennsylvania Health Access Network, provided survey data from Altarum, a Washington, D.C., nonprofit, that showed 44% of respondents who got a surprise medical bill paid it in full, while another 16% paid through a payment plan. The bill was written off or dismissed in 10% of cases.
Nelson, the Republican committee member, said in an interview, “If it was a minor issue, there wouldn’t be such a major fight.”
Dr. Mary Stock Keister, a family medicine provider based in Lehigh County and president of the Pennsylvania Academy of Family Physicians, said the issue cannot be dismissed without a review of data.
Figures that might be helpful, she said, would be numbers of personal bankruptcies caused by medical bills or uncollected debt of providers who produce the out-of-network bills.
Her own opinion, she said, is “it is a problem that is growing and worsening as hospitals kind of adjust their way of doing business.”
The new, tentative agreement in Washington involving House and Senate participants would deal with the question of who pays the surprise bill, and how, if responsibility is removed from the consumer. It would establish a system of arbitration to resolve disputes between insurance companies and providers.
Congress is scheduled to remain in session through next week before adjourning for the year, and while lawmakers are anxious to make progress on the major issue of medical costs, it is uncertain a bill can be approved within that window, in part because of the distraction of the ongoing impeachment proceedings.
Research done by the Commonwealth Fund, a New York City private foundation that supports independent health care research, found that 13 states have enacted comprehensive protections for consumers from surprise medical bills.
That includes four states that have acted this year to either enact a new, comprehensive law or to upgrade existing, lesseffective laws: Washington, Colorado, New Mexico and Texas. Pennsylvania is among 14 states the fund classifies as having limited but less-than-comprehensive protection.
States that have acted recently, the Commonwealth Fund found, have found creative ways to address the concerns of insurers and providers about payment amounts.
In Pennsylvania, at least two legislative bills that were active last session failed to come to a full vote in the House or Senate.
This session, at least two bills are active that would protect consumers who get surprise balance bills. One is waiting action in a Senate committee, and the other is in the House.
The origin of the Senate bill, whose lead sponsor is Berks County Democrat state Sen. Judy Schwank, was concern expressed by a benefits manager at a Berks County insurance agency, Jay Mahoney.
More than than four years ago, Mahoney said, women who had mammograms at two hospitals in the county started to get bills from out-of-network providers used by the hospitals.
Mahoney’s calls to the state Insurance Department and others, Schwank said, led her to describe him as the “father” of her bill.
It would, she said, protect consumers by removing their obligation to pay surprise balance bills that would have been covered if the care had been provided in-network. It also calls for “last-best offer binding arbitration” between a provider and insurer if they cannot agreement on payment.
The pain caused by the surprise bills, Schwank said, may be worse than it was four years ago.
“It is devastating to people. It really is,” she said. “You may be on the edge and have lost time at work and then to be hit with a bill for maybe thousands of dollars.”
Schwank described her bill as stuck in the Senate Banking and Insurance Committee.
Republican Sen. Mario Scavello, who recently took over as chairman of the committee, said he expected to hold a hearing on the bill within the first month or two of 2020.
Scavello described a hodgepodge of networks that a patient can unknowingly cross in a single hospital as a central problem. Instead, Scavello said, a patient’s care should be able to follow a single network.
“Everyone in that hospital has got to be part of the network, one way or the other,” he said.
This year, more attention has been paid to a House bill sponsored by Insurance Committee Chair Tina Pickett, a Bradford County Republican. It cleared her committee in late October but faces challenges in the form of proposed amendments.
Like the Schwank bill, it calls for consumers hit with surprise out-of-network bills to be free of responsibility for paying them.
Under Pickett’s bill, payments would instead be made by insurers to providers. Those payments would be based on a median figure among in-network payments for that same service in the same geographic area. Should the provider be unhappy with the payment, limited arbitration would be available.
Objections to that approach have come from the insurance industry and the Pennsylvania Medical Society, among others.
Society President Dr. Lawrence John told lawmakers that using a median figure would mean half of providers would receive less payment for care billed as in-network than out-ofnetwork. It would remove incentives for insurers to negotiate reimbursements above the median rate, he said.
Marshall, the Insurance Federation leader, said his group favors “baseball-style arbitration” for payment of disputed bills, where insurers and providers go before an arbitrator and present arguments for their figure.
Marshall acknowledged the approach might be complex, but that would make both sides want to avoid it and, hence, more readily reach compromise agreements.
Part of the discussion in the Legislature has been about how to notify consumers when their care might involve out-of-network providers.
Keenan said surprise balance bills are “really common” in the state. He called Pickett’s bill “truly bipartisan” in that long discussions involving both Republicans and Democrats were behind it.
“Pennsylvania lawmakers need to do something about this,” Keenan said. “And they need to do it in away that keeps consumers out of the middle.”