Q: Why not Medicare? | End the surprise insurance gap

A:  Medicare is not an appropriate benchmark for determining out-of-network payment for the following reasons:

  • The Medicare program was established for the purpose of reimbursing medical services for an age-specific population, and, as such, rates do not appropriately reflect key under age-65 health services, such as obstetrics and pediatrics. Additionally, reimbursement rates are based on federal budgetary and regulatory constraints, and all too often, on major political considerations. That is to say, they oftent do not capture the actual cost of care.
  • Medicare rates were never designed to represent the fair market value of health care services or to even cover provider costs, and are consistently set at below market rates. As such, they do not take into account the significant financial burdens that physicians, emergency doctors in particular, face, including disaster response preparedness, boarding and managing admitted patients in the ED until an in-patient bed is available, and in particular, maintaining excess physician staffing to provide surge capacity.
  • Using such artificially low Medicare rates for determining out-of-network reimbursement will take away any incentive for insurers to negotiate fairly with physicians and bring them in-network. This is one of the central problems underlying the balance billing issue – insurers are not negotiating in good faith with physicians to bring them in network.
  • Utilizing a politically-derived funding methodology like Medicare promises to significantly impact the health care safety net. Many doctors, particularly in already constrained areas of the country, will simply not be able to afford to provide the level of access needed to patients or to continue to practice in a given area at all. This is particularly true in the more rural areas of the country which are already experiencing physician shortages and hospital closures. 
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