Surprise Billing is an Insurance Company Fabrication
Surprise bills happen when insurance companies choose to deny all or part of bill coverage for an unscheduled or emergency medical service provided by an out-of-network doctor, often at an in-network facility. According to Project HOPE, a global health and humanitarian relief organization, up to one in five emergency visits results in a surprise medical bill.
The Patient Protection and Affordable Care Act of 2010 (ACA) has provisions to protect against surprise billing. The ACA specifically requires insurers to pay these bills. However, insurance companies are also allowed to determine “usual and customary rates” (UCR) for out-of-network services.
It turned into a loophole.
The American Medical Association (AMA) told lawmakers at the time that leaving payment details up to insurers would lead to inflated costs. The AMA was right. As Dr. Choi and his lobbying physician colleagues make clear, the insurers have driven a truck through this ACA loophole at the expense of both patients and doctors.
The Insurer “Fix” for Surprise Billing
Private insurance companies are lobbying lawmakers to employ a “benchmark” billing process, which would give insurance companies the power to determine a fixed charge based on their determination of what an average cost for those services would be.
Dr. Choi and his colleagues, on behalf of all orthopedic physicians are advocating for arbitration to negotiate costs to consumers at no expense to the consumers themselves. Choi argues that the arbitration approach can prevent insurance companies from putting a finger on the scale of healthcare costs for the sole benefit of insurers.
In December, American Association of Orthopaedic Surgeons President Kristy L. Weber, M.D., FAAOS, released a statement saying, “The AAOS thanks Congress for its dedication to finding a solution that removes patients from the middle of medical billing disputes.”
“We appreciate that the new version of the bill includes Independent Dispute Resolution (IDR) as well as a lowered threshold for access to this critical process. These positive improvements, however, are overshadowed by the committees’ continued use of the median in-network rate—a number controlled by insurers…Even when filtered through arbitration, the use of this rate as a benchmark is tantamount to government rate-setting.”
“It will allow insurers to systematically drive down in-network rates to serve their bottom line, consequently harming patient access to care throughout the country. Furthermore, the new 90-day waiting period between disputes for the same procedure type undermines the effectiveness of the IDR process which sole purpose is to bring both sides to the table and incentivize fair, reasonable offers.”
Weber went on to communicate AAOS concerns, saying that “As Congress evaluates this proposal and considers passing legislation before the end of the year, AAOS urges it to incorporate proven solutions like the fair market IDR standard employed successfully in New York. Using an independent database outside of physician or insurer control is the only way to protect access to care while saving consumers millions of dollars and taking patients out of the middle.”
