3 Reasons to Care About Balance Billing Legislation

Hospitals should keep an eye on state and federal efforts to ramp up consumer protections against surprise medical bills.

As the national conversation about surprise medical bills gets louder, the Senate is taking notice, introducing two new bills over the past several months that aim to limit surprise charges from out-of-network providers.

The latest, Maggie Hassan's (D-NH) "No More Surprise Medical Bills Act of 2018," says that providers can only charge a patient an in-network amount, unless the patient has been properly notified about the charge and has consented to it.

The legislation would also use a "binding arbitration" approach to resolve payment disputes without the patient being caught in the middle. In this scenario, a provider and insurer would each submit their best and final offer to an independent entity that would choose one of the offers.

The other draft legislation is a bipartisan effort from Bill Cassidy, M.D. (R-LA), Michael Bennet (D-CO), Chuck Grassley (R-IA), Tom Carper (D-DE), Todd Young (R-IN), and Claire McCaskill (D-MO).

It would protect patients from out-of-network billing, set payment standards, and prevent balance billing.

Although the approaches in the two bills are different, "they're just two methods of getting at the same thing," Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy, tells HealthLeaders.

Adler co-authored analyses of each of the bills for Health Affairs. He believes that there's currently a "big appetite" for tackling surprise medical bills.

"Even since 2016, this issue has just sort of skyrocketed into the national attention, from just a couple states having acted on it beforehand," he says. "Clearly there's a pretty broad interest from members of the Senate, Bill Cassidy in particular."

But how might such efforts impact hospitals and health systems? Adler outlined a few things to consider:

1. Action could be imminent on the state level
 

"I think there will definitely be action in the states this year," Adler says.

In the absence of federal protection against balance billing, several states have acted to curb the practice.

"We've seen over the past two years, five or six states pass legislation, and I assume that trend will continue," he says, pointing to Washington and New Mexico as states to watch.

Federal rules would help consumers the most, however, writes the Commonwealth Fund, " since most individuals with private insurance are in employer-sponsored self-insured plans, which are regulated primarily under federal law."

2. Hospitals may soon need to speak up
 

In state debates on this issue, Adler says hospitals and health systems haven’t been very vocal. Instead, it's mostly been a fight between insurers and specialist groups, he says.

That may change with increased attention on the topic.

"I'm somewhat curious how much the national attention, and maybe consumers starting to learn about this, forces hospitals to be a bit more proactive on stopping it," he says. "Because right now there's a little bit of a look-the-other-way approach at times."

3. The bottom line may be affected
 

Despite the potential for new federal balance billing rules, "it's unclear that it would have much impact on the hospitals' bottom line," Adler says.

But that doesn’t mean that it wouldn’t have any impact at all.

"It's not like the hospital has no role here. Hospitals have some financial incentive to try to get their hospital-based physicians to accept and join the same insurer networks that they're in, and some of them do try to push this," he says.

He also says that stipends are an area where hospitals may see a financial impact, particularity with the Maggie Hassan bill.

"If the payment to these physicians went down significantly, it is possible, especially in certain markets, that these doctors might be able to demand higher stipends from the hospital as a condition of practicing in their facility," he says.