End the surprise insurance gap

When it comes to surprise medical bills, journalists largely focus on casualties and not the war

Date created

Wed, 10/24/2018 - 12:04

Throughout the summer, I saw tweet after tweet calling for an end to surprise medical bills, an issue that’s rising in public importance:

 

 

Who was sending those tweets addressing patients caught in the trap of medical bills they thought had been paid but were not? Was this another front group working behind the scenes on behalf of some health care seller pitching products, or a special interest group with a single Washington agenda?

 

It turns out the group is Physicians for Fair Coverage, organized in 2016 to promote state legislation that would eliminate what’s known as “balance billing” for patients while establishing a minimum payment standard for doctors.

 

surprise medical billsAccording to Michele Kimball, president and CEO of the group, such a payment standard would be an improvement over what she says are the low rates now paid by insurers that are causing members of her group and other doctors to balance bill. That is, they bill for amounts above what a patient’s insurance company pays, resulting in the surprise bills that have angered thousands of consumers in the last few years. Some 70,000 physicians—primarily ER docs, anesthesiologists, radiologists, and plastic surgeons–have joined Kimball’s organization. Physicians for Fair Coverage also has partnered with medical specialty groups such as the American College of Radiology, the American Society of Plastic Surgeons, and the American College of Emergency Physicians, as well as state medical societies to help get favorable legislation for them on the books.

 

What’s at stake here is the root problem plaguing the U.S. health system—its stratospheric cost. Who will win the continuing war between providers and insurance companies? And who will help the patients who’ve become the battlefield casualties?

 

The problem of high medical costs in the U.S. extends further than that current fight between doctors and insurers. Hospital costs, which few journalists have really investigated, as we discuss here, account for about one-third of the total cost. Drug prices, while only about 10 percent of the total, make huge dents in family budgets.

 

Insurers have become the default vehicle for cost containment

The conflict has escalated over the last few years as higher deductibles and coinsurance pinch the family budget, and when surprise bills come out of the blue, they pinch even more. Insurers also have tightened their networks, particularly in the individual market, often excluding many specialists who won’t accept the payment an insurer offers, and that, too, brings more balance bills. Kimball says it has gotten so bad in some places that insurers are even ignoring the “prudent layperson” standard—making patients pay for emergency care when they’ve gone to the ER with symptoms any prudent person shouldn’t ignore.

 

Doctors want to belong to insurance company networks, Kimball told me, but they are being excluded as insurers try to gain the upper hand when it comes to their fees. “It’s strong-arming physicians,” she says. If doctors don’t accept an insurer’s payment, they stay out of network and balance bill to beef up their bottom lines.

 

However, Chuck Bell, program director at Consumers Union, says ER doctors and anesthesiologists have less incentive to join networks because they already have a steady volume of patients coming to them, unlike other doctors who are more inclined to accept an insurer’s payment in return for more patients.

 

For their part, insurers have become the vehicle for cost containment almost by default, and there are few levers left to control what they pay for care, says Hans Leida, a consulting actuary at the actuarial firm Milliman. “They are definitely getting pickier. The carriers are moving away from PPOs to HMOs with more limited networks.” It’s one of the few ways left they can manage the risk of insuring people with preexisting conditions since they no longer can do underwriting, Leida explained. Underwriting is the practice of evaluating an applicant’s health status.

 

But insurers are only part of the problem

No doubt thousands of Americans are victims of surprise bills. Heading into the midterm elections the latest Kaiser Family Foundation Tracking Poll has found that the biggest health worry Americans have is an unexpected medical bill (figure 7 in the link). Two-thirds of those surveyed reported that in the past year they or a family member had received a medical bill they did not expect. Four in ten respondents said they received an unexpected bill while one in 10 said their bills came from doctors who were out of their insurance network. What’s more astonishing is that fear from unexpected bills topped more common family pocketbook worries such as utility bills and the rent or mortgage.

 

How and if the fight is resolved promises to be a major health policy story next year, and likely to gather even more media attention. It’s especially important that stories explore the forces going on behind the scenes. For example, how hospital systems also share the blame for skyrocketing costs, as this story in Axios highlights: Think drug costs are bad? Try hospital prices. Or, those that explore the convoluted and arcane world of drug pricing, as Bloomberg has done with stories that try to decode Big Pharma’s pricing index.

 

News stories often focus on casualties and not the war

So far, though, journalists have generally focused on the casualties and ignored the war. Most of the stories I’ve looked at featured a victim and his or her travails with the insurance company, but little else.

 

One story in The Dallas Morning News last year, for example, began with a brief anecdote about a 58-year-old man who had a heart attack and got a $124,000 bill the insurer wouldn’t pay. The rest of the story was about a recently passed Texas state law that offers some consumer protection against surprise bills. Despite major shortcomings, the law–one of the few state laws out there of its kind–did help some consumers under the right circumstances. There was only a vague hint of the dispute between doctors and insurers over more revenue. Furthermore it said the law doesn’t apply to those with Medicare, but didn’t mention balance billing is prohibited in Medicare.

 

In this story, The Tennessean reported that spokespeople for the doctors and hospitals thought providers shouldn’t be punished for not negotiating with insurers, and that insurers should take more responsibility for informing patients about in-network and out-of-network benefits. An insurance company representative said his carrier was interested in increasing transparency. Nothing too enlightening there! The New York Times dipped into the dispute with a piece mostly about the insurer Anthem pushing back on patients who use emergency rooms for minor ailments, and the last sentence notes this is a fight between insurance companies and doctors. There is a reference to a death struggle between insurers, hospitals and emergency room physicians, and patients getting caught in the middle.

 

The Clarion-Ledger in Jackson, Mississippi in an otherwise excellent story about the state’s protections for people caught between doctors and insurers, didn’t get into the fight over cost containment between doctors and insurers. The story reported the chairman of the state House insurance committee said lawmakers were trying to make sure patients weren’t harmed by the industry “spat,” a term that trivializes what the real issue is all about.

 

News stories need to ask: Are the hospital charges valid?

As part of their Bill of the Month series, NPR and Kaiser Health News explored the story of a Texas school teacher smacked with a $109,000 bill. The story included scrutiny of the hospital’s pricing:

 

Healthcare Bluebook, which offers cost estimates for medical tests and treatments, … said a fair price for a hospitalization in Austin involving four heart stents would be about $36,800. St. David’s Medical Center (where the patient received care) charged four times that amount.

 

It’s possible that other stories also have taken a look at these issues — we can’t possibly find and evaluate everything that’s been written about surprise medical bills. But it’s clear that many stories are not delving to the core of this problem, and we hope that more journalists will relate these charges to the doctors’ dispute with insurers over how much medical procedures should cost.

 

“The problem is that we pay all different rates, and we can’t even see what the variation is,” Bell says. Indeed what rates should be used is central to next year’s health care fights. Kimball’s group is pushing for one standard, a higher one than insurers want.

 

“This is not a simple problem to solve. One side’s gain is another’s loss,” Bell added.

 

One thing you can be sure of: Physicians for Fair Coverage has laid the groundwork for a major lobbying campaign, and judging from the group’s tweets will be in a position to mobilize the patients and use their stories in its legislative fights. Journalists must be ready to move those tales into broader narratives than we’ve seen so far.