Study: Regulations are making surprise medical billing issues worse
A new study says that surprise billing legislation in California has actually narrowed patients' provider networks and incentivized provider consolidation.
A new study says patients continue to be routinely blindsided by medical bills for work they were unaware fell outside their insurance coverage.
“The problem occurs when patients seek treatment at healthcare facilities that are officially in their insurance network but receive some of their care from out-of-network doctors and healthcare practitioners,” wrote the study’s author, Wayne Winegarden, who serves as director of Pacific Research Institute’s Center for Medical Economics and Innovation.
“Often, patients are unaware that any of the doctors who treated them, such as their anesthesiologist, are not part of their insurance network,” Winegarden continued. ”Since these practitioners are not in-network, insurers will typically cover a small portion of these large out-of-network fees. The patient is then invoiced to pay the remaining out-of-network charges, which are often distressingly large and a surprise to the patients who were unaware that any of their doctors were out-of-network.”
Related: Which health care specialties send the most surprise bills?
But so far, attempts to remedy this issue have proven misguided, Winegarden wrote in the study, “The Menace of Medical Rate Setting: The Case of California’s AB 72.”
The report pointed to California’s Assembly Bill 72, in effect since July 2017, as exacerbating the problem it set out to solve.
“As a government price control, AB 72 mandates arbitrary limits on a doctor practice’s revenue,” Winegarden wrote. “The system’s advocates assume that the doctors impacted by the law will not change their behavior and provide patients with the same amount of healthcare services in the exact same manner. Thus, the advocates assume that AB 72’s price controls will reduce the cost of healthcare without impacting its quality. After three years of implementation, this assumption is proving false.”
According to Winegarden’s study, the law has actually narrowed patients’ provider networks and incentivized an acceleration in provider consolidation, threatening to decrease the quality of health care and increase its costs.
However, Winegarden wrote, there are more effective ways to address the problem of surprise medical bills, such as a truth-in-advertising requirement for insurers and health care facilities, first suggested by health care experts Doug Badger and Brian Blase in their report, “A Targeted Approach to Surprise Medical Billing.”
“The truth-in-advertising requirement ‘would hold insurers and facilities accountable for the information they provide consumers’ by enforcing the common-sense definition of an in-network facility,” Winegarden wrote, quoting Badger and Blase. “Under this definition, a facility could only be considered in-network if all of a patient’s charges reflect the in-network rates. This reform would create protections for patients and empower fair negotiations between insurers, doctors, and health care facilities to determine each party’s appropriate compensation.”
Read more: