End the surprise insurance gap

Physicians Propose Ending Surprise Medical Bills and Better Protections for Patients in Federal Legislative Model

Date created

Wed, 03/13/2019 - 14:54

Physicians for Fair Coverage’s new approach builds on state laws that have effectively prohibited unanticipated, out-of-network medical bills

(Washington, DC) – Today, Physicians for Fair Coverage (PFC), a non-profit, non-partisan multi-specialty alliance of physicians partnered with state and national consumer organizations dedicated to improving patient protections and ending the surprise insurance gap, released model legislation that will provide federal lawmakers with a framework to protect patients from surprise out-of-network medical bills.

To ensure adequate patient protections, the legislation proposes banning healthcare providers and healthcare insurance companies from balance billing patients for unanticipated out-of-network (OON) care, or so-called ‘surprise medical bills.’ The proposal would create a national protocol for Alternative Dispute Resolution (ADR), a model that has been effectively implemented in some states to prohibit surprise medical bills and establish fair reimbursement standards for medical providers.

Click here to read PFC’s full model federal legislation to stop surprise medical bills

PFC’s proposal will allow states that have an acceptable process in place to address OON reimbursement to take precedence over the new federal law. In states without an applicable law, ADR entities will be established to resolve reimbursement issues between clinicians and health insurance plans for disputed amounts greater than $750. In states without an adequate process, clinicians or plans could petition a federal ADR entity to resolve the dispute.

PFC believes that fairly reimbursing medical providers is a foundational element of our healthcare delivery system and failure to establish equitable standards would risk reducing patients overall access to care, particularly in rural communities where patients already suffer from an insufficient number of healthcare providers. PFC maintains that Medicare standards should not be used as a benchmark for setting reimbursement rates for out of network care. Any model based on Medicare will lead to even more physicians being dropped from coverage networks and place a greater financial strain on providers who are absorbing the costs of patients who cannot pay for services rendered. 

“Physicians for Fair Coverage is fighting for solutions to address the problem of surprise insurance gaps and end surprise billing for patients. We are grateful that leaders in Congress and the White House have recognized the urgency of this crisis and have committed to finding a solution that protects patients from this growing problem," said PFC’s Chair, Dr. Sherif Zaafran, MD. "As physicians, our patients are our top priority. That is why PFC has drawn on the vast expertise of its members – physicians providing care nationwide – to draft model legislation that represents an effective solution for stop surprise medical bills nationwide. Our goal is to equip lawmakers with the tools and information they need to implement effective policies that will protect all Americans from surprise medical bills while preserving access to care.”

Protecting Patients from Surprise Medical Bills and High Out-of-Pocket Costs

PFC’s new legislative proposal, which is intended to protect patients from the high costs associated with unanticipated out-of-network medical bills, establish fair reimbursement standards that will ensure continued access to care, and increase transparency requirements for both insurers and providers so patients can make informed decisions about their level of coverage and their care, contains the following provisions. 

  • Physicians and insurers will be banned from balance billing patients who receive unanticipated OON services.
  • Patients’ cost-sharing for unanticipated OON services will be the same as when they receive in-network services.
  • Patients will not have to participate in billing discussions for unanticipated OON services; Instead, negotiations will be between the clinician and the health insurance plan.
  • Clinicians will give information to patients and discuss their OON fees in advance of services, except when it is not possible such as for emergency services or unanticipated OON care situations.
  • Plans will explain in plain language their out-of-network coverage and any limitations of that coverage.
  • Patients will be protected from the financial impact that can result from narrow networks, retroactive denials and cost-shifting trends within Health Insurance Plans.
  • Solutions to OON issues for unanticipated care including Emergency Services and EMTALA-mandated care shall ensure universal access to high-quality emergency care.

Alternative Dispute Resolution

PFC’s Alternative Dispute Resolution (ADR) model builds upon existing state laws that have successfully addressed prohibited unanticipated, out-of-network medical bills by expanding on those models in the following ways:

  • Existing state law with an adequate process for addressing OON reimbursement will take precedence. In states without an applicable law, ADR entities will be established to resolve reimbursement issues between clinicians and health insurance plans for disputed amounts greater than $750. In states without an adequate process, clinicians or plans may petition the federal ADR entity to resolve the dispute.
  • The Secretary, in consultation with regulators, will establish an ADR process through a certified ADR entity or administrator independent of both plans and clinicians.
  • If charges are less than $750, the health insurance plan will reimburse directly reimburse the clinicians fees and the patient’s cost-sharing amounts, provided the charges do not exceed the 80th percentile of all clinician charges in the same geographical area for the health care service performed by a health care professional in the same or similar specialty, and as reported in a nonprofit benchmarking database.
  • Plans must reimburse clinicians in a timely fashion. If the plan and the clinician have not agreed on a reimbursement within 30 days of claim submission, the plan must reimburse the OON clinician at least an Interim Direct Reimbursement (IDR), formula to be decided.
  • Health insurance plans will pay all reimbursements directly to clinicians and will be prohibited from sending the reimbursement to the patient, even if the clinician is OON.
  • Health insurance plans will bill the patient for their cost-sharing responsibility but will not delay payment to the clinician for patient non-payment of cost-sharing amounts. 

Improved Transparency

PFC believes patients should be able to easily access in-network primary care doctors and specialists, as well as access to information that will help them make well-informed decisions while purchasing health issuance and when selecting providers.

  • Health insurance plans will provide in easily understood language, accurate, up-to-date, and accessible online and print clinician directories. 
  • Directories will include information on how the plan’s network is built, how the network is organized, when referrals are needed, and include customer service contact information.
  • Premiums paid for affordable access to OON clinicians must be reasonably reflected in the actuarial value of the OON benefit provided in the plan.

Medicare Standards

Medicare standards should not be used as a benchmark for setting reimbursement rates for out of network care. PFC believes that any model based on Medicare will lead to even more physicians being dropped from coverage networks and place a greater financial strain on providers who are absorbing the costs of patients who cannot pay for services rendered for these reasons:

  • Medicare rates were never designed to represent the fair market value of health care services or to even cover provider costs, and are intentionally set below market rates.
  • Medicare reimbursement rates are based on federal budgetary and regulatory constraints, and, all too often, on major political considerations.
  • The Medicare program was established to reimburse 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.
  • Medicare rates do not account for the unique financial burdens that physicians, particularly emergency room doctors, including disaster response preparedness; boarding and managing admitted patients in the ED until in-patient beds are available; and staffing physicians for surge capacity.

More About Physicians for Fair Coverage

Physicians for Fair Coverage (PFC) created the End the Surprise Insurance Gap campaign to advocate on behalf of patients and the physicians who care for them. The goal of the campaign is to advance legislation that protects patients from unexpected costs associated with unanticipated out-of-network care, establishes fair reimbursement standards to preserve needed access, and creates greater network and pricing transparency.

PFC is comprised of tens of thousands of physicians in a variety of specialties serving communities in all 50 states. Its partners include the National Patient Advocate Foundation, the Emergency Department Practice Management Association, the American College of Emergency Physicians, the American Society of Anesthesiology, the American College of Radiology, the American Society of Plastic Surgeons, the American Psychiatric Association, the American Academy of Orthopaedic Surgeons, the American Association of Emergency Medicine, the Society of Hospital Medicine, multiple state medical societies, and dozens of other state physician and patient organizations. To learn more, visit www.endtheinsurancegap.org.

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