By Brent Wright, MD
Congress appears to be close to passing a solution for an issue that has for too long impacted patients and providers in Kentucky and throughout the country: surprise medical billing. As lawmakers deliberate the optimal approach to separate patients from out-of-network billing disputes between healthcare providers and insurance companies, they must ensure that the solution they enact does not have any negative implications on the larger healthcare system.
One potentially devastating approach has been suggested in multiple pieces of legislation. Known as benchmarking, this so-called solution would leave the federal government in charge of setting out-of-network rates for physicians by relying on insurance companies’ own biased data and in-network averages. This untested payment formula absolves insurers from the need to create strong networks for the provision of health care services and removes a physician’s ability to negotiate, when that ability is already diminished due to the significant market power of health plans.
Hitting physicians with new financial burdens could undermine the quality of care, and potentially contribute to a rising doctor shortage and provider consolidation rate—thereby undermining access and driving up costs for patients, particularly those living in Kentucky’s many rural communities, where these issues already act as high barriers to care.
Instead of undermining healthcare delivery, access, quality, and affordability, Congress should focus on solutions that would protect patients from surprise billing while maintaining the integrity of our entire healthcare system. Such a solution can be found in legislation that includes Independent Dispute Resolution (IDR). Under IDR, providers and insurers would both be empowered to negotiate out-of-network payments in good faith—separating patients from the process while ensuring neither side, nor the government, is dictating prices for the other.
IDR would essentially allow insurers and providers to submit their most reasonable payment offers through an online process overseen by an independent mediator. In 30 days, the mediator would decide a final payment amount by taking into consideration these offers as well as a number of factors and third-party data. This helps to ensure payments accurately reflect the true cost of care in a given geographical location or facility type. Moreover, interim payments help ensure rural and at-risk hospitals and physician practices remain financially strong and stable.
Unlike benchmarking, IDR has a proven track record of success. In New York, state legislators passed a strong, IDR-focused bill, which became law in 2015. Since then, IDR has helped lower out-of-network billing rates by 34 percent and reduce in-network emergency payments by 9 percent. Altogether, the IDR process has saved New Yorkers $400 million in emergency care costs alone. These are positive results that Congress should seek to replicate.
Ultimately, IDR is the fairest, most effective, and least disruptive way to protect patients from surprise medical bills while maintaining a strong, efficient, accessible, and responsive healthcare system overall.
Brent Wright is the President of the Kentucky Medical Association