Protecting Patients From Surprise Medical Bills in Massachusetts
I had the honor of recently testifying at the Massachusetts State House regarding a solution for preventing surprise medical bills. Surprise medical bills, also known as "balance billing" or "out of network" bills occur when a patient unknowingly receives care from an out of network provider in a in-network hospital. Many times these charges are for pathology labs, radiology studies, anesthesia and emergency care. The root of the problem is that many insurance companies have narrow provider networks and often do not include these vital hospital based physicians within network.
The Massachusetts Society of Pathologists supports a solution: Massachusetts House Bill H. 932, "An Act relative to out of network bills", filed by Representative Gerard Cassidy (D, 9th Plymouth).
The key points of this bill include the following:
This issue is often portrayed as about protecting patients. In fact, the state legislature has already protected patients from unavoidable out of network bills. In 2012, a new law took effect making clear that patients who receive care from an out of network doctor at an in-network hospital are not responsible for paying out of network rates unless they voluntarily elect to be treated by an out of network physician. When unavoidable out of network care occurs, the patient’s insurance company must pay the higher, out of network rate. The patient is only responsible for his or her usual deductible or co-pay.
Disputes about unavoidable out of network billing in Massachusetts are between payers and providers. Patients are rightly held harmless. The solution to patients receiving balance bills is clear: current law should be enforced.
Unfortunately, this state statute only protects patients whose insurance plans are governed by Massachusetts law. As reflected in recent news reports, some residents do not get the benefit of this law because their insurance plans are governed by federal law, which does not prohibit these unwelcome surprises. That is why people insured by national companies or by self-funded insurance plans are burdened with these unexpected medical bills.
Congress should act to protect patients in federally regulated plans. While we wait for Congress to act, H. 932 allows these plans to opt into the state’s system protecting patients from unavoidable out of network bills. This is an easy way to help Massachusetts residents in ERISA plans that the state is otherwise unable to regulate.
As the Massachusetts tackles the issue of unavoidable out of network bills, The Massachusetts Society of Pathologists respectfully suggests that legislation should include three components. Legislation should (1) establish a fair default rate for unavoidable out-of-network services, (2) prohibit a physician from balance billing a patient if the insurance carrier pays the default rate and (3) establish a mediation process for disputes arising from the provision of unavoidable out of network services.
This approach keeps the patient out of these disputes, sets up an appropriate rate for physician services that is consistent with the state’s important cost containment efforts, and creates a dispute resolution process between physicians and insurance carriers so any problems are addressed efficiently and with a minimum of expense.
We support the default rate proposal in H. 932 and oppose those proposed in the other bills.
When crafting a bill, we respectfully ask the Joint Committee on Financial Services to recognize that physicians in a hospital setting, including pathologists, cannot exercise discretion in the performance of their services. For the most part, pathologists are under legal and ethical obligations to perform services when specimens are referred within the hospital setting, whether or not the pathologist has a contract with the patient’s health insurance plan. Accordingly, hospital-based physicians should not be financially penalized, and payment for such services should reflect the market value of physician services.
When people purchase health insurance that lists in-network hospitals but the plan has failed to contract with essential hospital-based physician specialties, the health plan has deceived its customer into purchasing an insurance policy that is fundamentally deficient. We strongly urge that such deceptive trade practices be subject to state sanction. Patients should not be surprised when planned treatment at their in-network hospital includes out of network doctors because their health insurance plan has a limited network of doctors. Robust network adequacy is essential if we want to reduce the likelihood that a patient is unavoidably treated by an out of network doctor.
In conclusion, we believe it is paramount that the state’s solution includes a fair and transparent reimbursement standard that keeps patients out of the middle, strengthens their access to care, and keeps costs for services predictable. The Massachusetts Society of Pathologists looks forward to working with the Joint Committee on Financial Services in the weeks and months ahead.