If you are one of the roughly one in seven Americans who has received a surprise bill after getting care at an in-network health care facility, brace yourself for a challenge. Successfully haggling to reduce a medical bill can take a heap of time, a handful of persistence, and a pinch of luck.

That’s what Martha Shea learned while negotiating her husband’s $12,000 bill for emergency surgery. She told Vox’s Sarah Kliff that the first time she spoke to the surgeon’s office staff, they agreed to give her a 15% discount on the bill. Why stop there? “I could have afforded to pay the whole thing, but I knew I had time,” Shea said. “So I wanted to wait, and each time [I called the office], the physician group would knock it down a little bit.” Over the course of six months and many phone calls, she got the bill reduced to $7,800.

But many patients don’t have time or luck on their sides when negotiating surprise bills. Kliff writes, “Some patients told me their hospital was willing to negotiate right off the bat. Others quickly said no. And sometimes different consumer representatives would offer different discounts.”

In Search of a Federal Policy Solution

Recognizing the burden placed on patients and the health care system by surprise bills and out-of-network payments to providers, Congress has begun exploring federal policy solutions. On April 2, the House Subcommittee on Health, Employment, Labor, and Pensions heard from experts like Frederick Isasi, executive director of Families USA, and Christen Linke Young, a fellow at the USC-Brookings Shaeffer Initiative for Health Policy, on different approaches to ending surprise billing. It was the first-ever congressional hearing on this topic.

Rachel Bluth reports in California Healthline that witnesses drove home the message that the solution must protect patients. “It is the providers and insurers, not patients, who should bear the burden of settling on a fair payment,” Isasi said.

Bipartisan support exists for figuring out a way to protect patients from surprise bills and, more broadly, for reducing the amount insurers must pay for out-of-network care, which is ultimately passed on to consumers through higher insurance premiums. In March, Senate Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander (R-Tennessee) and ranking member Patty Murray (D-Washington) asked the Congressional Budget Office (CBO) to analyze policy options.

The Hill’s Peter Sullivan reports that some of the options Alexander and Murray presented to the CBO include:

• Have an arbitrator determine how much the insurer pays the doctor or hospital.
• Set a payment rate based off a percentage of Medicare’s payment rates or something similar.
• Require hospitals to send a single bill to the insurer, preventing doctors within the hospital from independently charging the insurer at much higher rates.

The CBO has yet to release its analysis.

Controversial California Legislation Already in Place

California is one of nine states with laws that protect consumers from surprise bills and place upper limits on what providers can charge insurers for out-of-network care. The measure, AB 72, was signed into law by former Governor Jerry Brown in 2016 and took effect in July 2017. The law sets reimbursement rates for out-of-network doctors at 125% of the Medicare rate or at the insurer’s average contracted rate, whichever is greater.

Advocacy groups like Children Now and Consumers Union lauded AB 72 for taking the burden of surprise bills off patients. But some medical associations opposed it, arguing it would tip the scales too far in favor of health plans, leading to lower payment rates and fewer in-network providers. According to Manatt, the medical groups worried it would “incentivize plans to further narrow networks, making it that much harder for patients to receive in-network care.”

Health plans and anesthesiologists are currently debating what effect AB 72 has had in California. POLITICO Pro’s Angela Hart reports (subscription required) that “anesthesiology groups say health plans and insurers, seeking to cut costs, are demanding anesthesiologists accept lower reimbursement rates, while health plans and insurers say it’s anesthesiologists that are demanding higher reimbursements.”

The result of the dispute could be another round of legislation. Just last week, AB 1174, which would require health plans to contract with anesthesiologists as in-network providers, passed the Assembly Health Committee. San Diego anesthesiologist and former California Medical Association president Bob Hertzka, MD, told Hart, “Without this bill, you can have a health plan unilaterally terminate a contract with an anesthesiologist, then pay a small portion of what’s billed with no consequence.”

Advocates Square Off

Health plans and patient advocacy groups oppose AB 1174. The California Association of Health Plans wrote in its opposition letter that the bill “places zero attention or accountability on providers if and when they are terminating their contractual agreements with plans.” And advocacy group Health Access California argued that the bill would drive up health care costs. “If the plans are forced to contract with anesthesiologists,” said the group’s executive director, Anthony Wright, “then they have the ability to demand whatever, and the plan is in a position to have to take it.” This could hurt rural areas because anesthesiologists would have less incentive to serve patients with plans paying lower reimbursement rates.

Meanwhile, AB 1611, another bill that addresses surprise billing in California, will be heard by the Assembly Health Committee on April 23. The bill, filed by Assemblymember David Chiu and State Senator Scott Wiener, would limit the cost of out-of-network emergency care for which patients and insurers in California could be held liable.

At a time when more Californians are extremely or very worried about paying for health care than are worried about paying for housing, the momentum at the state and federal levels to protect patients from surprise bills and ultimately lower payment for out-of-network services within the health care system is important and necessary. However, policymakers will have to be mindful about the difficulty of balancing cost containment efforts with health access considerations.

Have you tried negotiating a medical bill? Tell me about your experience — tweet at me with #EssentialCoverage or email me.

Xenia Shih Bion

Xenia Shih Bion is a communications officer at CHCF, where she helps to lead communications around the foundation’s work to create health equity. She is the founding author of the “Essential Coverage” column in The CHCF Blog. Read More

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