Every politician condemns the phenomenon of “surprise” medical bills. This week, two committees in the House are marking up new surprise billing legislation. One of the few policy proposals President Trump brought up in this year’s State of the Union address was his 2019 executive order targeting them. In the Democratic debates, candidates have railed against such medical bills, and during commercial breaks, back-to-back ads from groups representing doctors and insurers proclaimed how much the health care sector also abhors this uniquely American form of patient extortion.
Patients, of course, hate surprise bills most of all. Typical scenarios: A patient having a heart attack is taken by ambulance to the nearest hospital and gets hit with a bill of over $100,000 because that hospital wasn’t in his insurance network. A patient selects an in-network provider for a minor procedure, like a colonoscopy, only to be billed thousands for the out-of-network anesthesiologist and pathologist who participated.
And yet, no one with authority in Washington has done much of anything about it.
Here’s why: Major sectors of the health industry have helped to invent this toxic phenomenon, and none of them want to solve it if it means their particular income stream takes a hit. And they have allies in the capital.
That explains why President Trump’s executive order, issued last year, hasn’t resulted in real change. Why bipartisan congressional legislation supported by both the House Energy and Commerce Committee and the Senate Health Committee to shield Americans from surprise medical bills has gone nowhere. And why surprise billing provisions were left out of the end-of-year spending bill in December, which did include major tax relief for many parts of the health care industry.
Surprise bills are just the latest weapons in a decades-long war between the players in the health care industry over who gets to keep the fortunes generated each year from patient illness — $3.6 trillion in 2018.
Here’s how they came to be:
Forty years ago, when many insurers were nonprofit entities and being a doctor wasn’t seen as a particularly good entree into the 1 percent, billed rates were far lower than they are today, and insurers mostly just paid them. Premiums were low or paid by an employer. Patients paid little or nothing in co-payments or deductibles.
That’s when a more entrepreneurial streak kicked in. Think about the opportunities: If someone is paying you whatever you ask, why not ask for more?
Commercial insurers as well as Blue Cross Blue Shield Plans, some of which had converted to for-profit status by 2000, began to push back on escalating fees from providers, demanding discounts.
Hospitals and doctors argued about who got to keep different streams of revenue they were paid. Doctors began to form their own companies and built their own outpatient surgery centers to capture payments for themselves.
So today your hospital and doctor and insurer — all claiming to coordinate care for your health — are often in a three-way competition for your money.
As the battle for revenue has heated up, each side has added new weapons to capture more: Hospitals added facility fees and infusion charges. Insurers levied ever-rising co-payments and deductibles. Most important they limited the networks of providers to those that would accept the rates they were willing to pay.
Surprise bills are the latest tactic: When providers decided that an insurer’s contracted payment offerings were too meager, they stopped participating in the insurer’s network; either they walked away or the insurer left them out. In some cases, physicians decided not to participate in any networks at all. That way, they could charge whatever they wanted when they got involved in patient care and bill the patient directly. For their part, insurers didn’t really care if those practitioners demanding more money left. (...)
So, nothing has changed at the federal level, even though it’s hard to imagine another issue for which there is such widespread consensus. Two-thirds of Americans say they are worried about being able to afford an unexpected medical bill — more than any other household expense. Nearly eight in 10 Americans say they want federal legislation to protect patients against surprise bills.
[ed. See also: What the Heck Happened to Surprise Billing Legislation? (Or, It’s Never Too Late for the Lobbyists to Win) (Health Care Renewal).]
Patients, of course, hate surprise bills most of all. Typical scenarios: A patient having a heart attack is taken by ambulance to the nearest hospital and gets hit with a bill of over $100,000 because that hospital wasn’t in his insurance network. A patient selects an in-network provider for a minor procedure, like a colonoscopy, only to be billed thousands for the out-of-network anesthesiologist and pathologist who participated.
And yet, no one with authority in Washington has done much of anything about it.
Here’s why: Major sectors of the health industry have helped to invent this toxic phenomenon, and none of them want to solve it if it means their particular income stream takes a hit. And they have allies in the capital.
That explains why President Trump’s executive order, issued last year, hasn’t resulted in real change. Why bipartisan congressional legislation supported by both the House Energy and Commerce Committee and the Senate Health Committee to shield Americans from surprise medical bills has gone nowhere. And why surprise billing provisions were left out of the end-of-year spending bill in December, which did include major tax relief for many parts of the health care industry.
Surprise bills are just the latest weapons in a decades-long war between the players in the health care industry over who gets to keep the fortunes generated each year from patient illness — $3.6 trillion in 2018.
Here’s how they came to be:
Forty years ago, when many insurers were nonprofit entities and being a doctor wasn’t seen as a particularly good entree into the 1 percent, billed rates were far lower than they are today, and insurers mostly just paid them. Premiums were low or paid by an employer. Patients paid little or nothing in co-payments or deductibles.
That’s when a more entrepreneurial streak kicked in. Think about the opportunities: If someone is paying you whatever you ask, why not ask for more?
Commercial insurers as well as Blue Cross Blue Shield Plans, some of which had converted to for-profit status by 2000, began to push back on escalating fees from providers, demanding discounts.
Hospitals and doctors argued about who got to keep different streams of revenue they were paid. Doctors began to form their own companies and built their own outpatient surgery centers to capture payments for themselves.
So today your hospital and doctor and insurer — all claiming to coordinate care for your health — are often in a three-way competition for your money.
As the battle for revenue has heated up, each side has added new weapons to capture more: Hospitals added facility fees and infusion charges. Insurers levied ever-rising co-payments and deductibles. Most important they limited the networks of providers to those that would accept the rates they were willing to pay.
Surprise bills are the latest tactic: When providers decided that an insurer’s contracted payment offerings were too meager, they stopped participating in the insurer’s network; either they walked away or the insurer left them out. In some cases, physicians decided not to participate in any networks at all. That way, they could charge whatever they wanted when they got involved in patient care and bill the patient directly. For their part, insurers didn’t really care if those practitioners demanding more money left. (...)
So, nothing has changed at the federal level, even though it’s hard to imagine another issue for which there is such widespread consensus. Two-thirds of Americans say they are worried about being able to afford an unexpected medical bill — more than any other household expense. Nearly eight in 10 Americans say they want federal legislation to protect patients against surprise bills.
by Elizabeth Rosenthal, NY Times | Read more:
Image: Michael George Haddad[ed. See also: What the Heck Happened to Surprise Billing Legislation? (Or, It’s Never Too Late for the Lobbyists to Win) (Health Care Renewal).]
