Understanding Surprise Medical Bills Legislation
LULU GARCIA-NAVARRO, HOST:
Maybe this has happened to you or someone you love. You go to the hospital. You have a procedure done. Then comes a nasty surprise - a medical bill for thousands or tens of thousands of dollars not covered by insurance. Now legislation in the House and Senate is inching forward that would roll back that practice, but it's faced a lot of resistance and millions of dollars in advertising and lobbying. Who's responsible? Emmarie Huetteman of Kaiser Health News joins me now to explain.
EMMARIE HUETTEMAN: Good morning. Thanks for having me.
GARCIA-NAVARRO: So we've heard about these so-called surprise bills before, but briefly explain to us what is actually going on here. The official term is balance billing, right?
HUETTEMAN: That's correct. So what's happening is, in many parts across the country that haven't banned this yet, patients get a bill that is the difference between what their doctor charged and what the insurance paid. And in many cases, that's a huge amount of money, and it's not what people expected to pay.
GARCIA-NAVARRO: How is this legislation we mentioned designed to help fix that problem?
HUETTEMAN: So the legislation that's being considered right now looks at a practice called benchmarking to try and pay these surprise bills. Benchmarking means that an insurance company would pay a provider basically a fee based on the average of what other providers in the area had been paid for that service. There are a lot of groups that say this is not the right way to go - doctors in particular. They're worried that they're going to end up with depressed fees that make it hard for them to continue to cover their administrative and other costs.
And they favor a method called arbitration. Arbitration would basically look like, you know, the provider would offer their quote for what they think they should be paid for the procedure, and the insurance company would offer their quote for what they think they should pay for the procedure. And a third party would mediate, look at the options and say, OK, I select yours. And hey, loser, you get to pay the fees of arbitration. It's an interesting process. People criticize it by saying this is not going to make things less complex, but it is the argument being put forward by doctors in particular.
GARCIA-NAVARRO: I was surprised to learn that private equity firms are behind some of this lobbying, too. Explain their role here.
HUETTEMAN: So private equity firms come into the picture because there are at least a few of them that own physician staffing companies. Now, a lot of people don't really know what a physician staffing company is.
GARCIA-NAVARRO: I have to say I hadn't heard of it.
HUETTEMAN: Not surprising. Basically, a company will hire a doctor, and then you get hired out to hospitals, and they help you with a lot of the administrative tasks that really, like, take up a lot of doctors' time. These groups are owned by private equity in many cases. Some of the biggest ones are that provide a lot of the emergency room doctors in this country, for instance. And so you see those physician staffing groups really pushing back against this legislation in Congress right now. And you have to look at it and say, you're owned by private equity, which, ultimately, you're interested in profits...
HUETTEMAN: ...For your investors. Yeah.
GARCIA-NAVARRO: And you cite, actually, something very interesting. Research from 2017 shows that when a physician staffing company owned by private equity entered a market, out-of-network billing rates went up between 81 and 90%. And when you see other groups working with a hospital, rates increased by 33 percentage points, which sort of suggests that these groups coming in are going to naturally raise costs. And maybe the pushback isn't so much about how much these fees are, but more about, actually, these private equity firms.
HUETTEMAN: It's possible. At the very least, they're involved in this fight, and the fight has been a deep-pocketed fight, let's say. There's a lot of money being thrown around, and it makes sense that some of that money would be coming from these groups that have a lot to lose.
GARCIA-NAVARRO: It would seem like an easy win for legislators to say, people don't want bills; people don't want surprise bills. Why isn't this getting more traction?
HUETTEMAN: You're right to ask. And even though there are Democrats and Republicans who agree that surprise billing should be fixed, as I said, there was a lot of money that's been thrown around recently into attack ads. There's a lot of lobbyists wandering Capitol Hill and a lot of doctors wandering Capitol Hill. And even though it's the year before the election, it's close enough to Election Day that a lot of members of Congress are worried about taking a hard vote.
GARCIA-NAVARRO: That's Emmarie Huetteman of Kaiser Health News. Thank you very much.
HUETTEMAN: Thank you. Transcript provided by NPR, Copyright NPR.