American Society of Plastic Surgeons Concerned by Latest Bill Addressing Unanticipated Out-of-Network Billing
The House Ways and Means Committee passed legislation that purports to solve the out-of-network billing problem, but in fact unfairly advantages insurance companies at the expense of patient access to care.

ARLINGTON HEIGHTS, IL – We applaud the members of Congress who are working diligently on a balanced solution to the very complex issue of out-of-network billing; however, while the House Ways and Means Committee's Consumer Protections Against Surprise Medical Bills Act has welcome improvements, it still does not address the inherent danger and fundamental imbalance that would be created by benchmarking in-network median rates and by not requiring adequate networks.

Legislation that benchmarks at the in-network median rate acts as a government-induced price-fix that is unilaterally controlled by insurers, removing any incentive for insurers to negotiate in good faith and encouraging even narrower networks. Enshrined in law, this government-set rate becomes the maximum amount that an insurer will ever pay and since it is controlled by the insurers, it can be ratcheted down each year. If the in-network rate and the out-of-network rate that insurers pay are the same, insurers are actually incentivized to remove as many physicians from their plans as possible. This restricts access to live-saving services.

In California, similar legislation passed and benchmarked to average contracted rates. A RAND Corporation study reported that long-standing contracts were terminated by health plans after the passage of the California law. In addition, four large health plans closed their networks to new physicians, and patient complaints about accessing care increased 48 percent in California since the law's enactment.

Bottom line-driven network construction by insurers is what causes unintended out-of-network encounters. Passing a bill that incentivizes it will undercut all the very real, necessary, and good patient protections any bill might also contain.

Thus, protections for adequate networks, measured by both time and distance standards, must be included in any legislation that addresses surprise billing. The adequate network provisions must have penalties that are enforced, otherwise they offer protection in name only. One way to achieve this is to stipulate that insurers lose the protections of the surprise billing legislation on a case-by-case basis when a patient is unable to find a physician within the specified time and distance. At that point, the insurer must pay the full charges without recourse.

A successful balanced package should not benchmark out-of-network payments to an in-network rate, it should consider an independent, third party database and contain an easily accessible dispute resolution process that allows multiple data points from the range of paid claims. States which follow that model, such as New York, have proven successful in ending surprise billing, incentivizing insurers to expand their networks, increasing access to care, and creating a level playing field between insurance companies and physicians while protecting patients."

This legislation was intended to address out-of-network billing, but it risks depleting networks even further, which leads to decreased access, and accelerating healthcare consolidation, which leads to increased healthcare costs overall.