The Honorable Joseph Kennedy, III
304
Cannon House Office Building
Washington, DC 20515
Dear Representative Kennedy:
I am writing on behalf of the 25,000 physicians, residents and
medical students of the Massachusetts Medical Society in support “Protecting
People from Surprise Medical Bills,” introduced by Representatives Ruiz and
Roe. Based on data from various state
models, the MMS strongly believes that to be successful, federal legislation
must protect patients from all aspects of these interactions and restore
balance to the negotiations between insurors and physicians. This legislation
incorporates key components of the New York state model which has successfully
reduced surprise bills, increased in network care and reduced health care
spending. These results are dramatically
different from those states which have legislated in-network benchmarks,
similar to the “No More Surprise Medical Bills Act”, where surprise bills
persist as negotiations between insurors and physicians deteriorate.
The MMS is extremely concerned about the impact of surprise bills
on our patients. To be clear it is our
patients who are harmed by these surprise bills - not the physician, nor the
insurer. While the cause of surprise
bills rests with the dysfunction in how we finance and negotiate health care
and insurance, it is our patients who are the most directly impacted. We believe strongly that patients should
never receive a surprise bill and should be protected from any negotiations or
additional payments in these circumstances. All patient protections, including
prudent layperson definitions, should apply to all insureds, including those
who are enrolled in ERISA plans. We strongly support provisions which hold
patients harmless, ban balance billing, require transparency, network adequacy
and extend prudent layperson definitions to ERISA plans. These protections are
long over overdue. (Note: It is our understanding that there is a
drafting error in the current version of the bill which is being rewritten to
make sure the legislation would apply to all ERISA plans).
We also strongly believe the fundamental solution to ending
surprise bills is to create systemic changes which restore balance to contract
negotiations between physicians and insurers thus giving patients timely access
to fully staffed physician networks. Too
much of the debate on the surprise billing issue has focused simply on how to
determine the amount of money that will be paid either to the physician or the
payor. This approach fails to address the underlying issue which led to
surprise billing and has fostered policy recommendations which can impede
patient access to health care.
As the following details, the Ruiz-Roe bill incorporates the
critical elements of the New York state model which has proven to significantly
reduce surprise billing, incentivize negotiations between physicians and
insures and reduce health care spending as defined through decreased payments
to physicians and the lowest premium increases in the nation. These critical
elements include a baseball style arbitration process - which is neither costly
nor lengthy – and a benchmark based on an independent data base, one of several
factors which are used in New York for those cases which do go to arbitration.
The data from New York is compelling. The recent study from the
Georgetown University Health Policy Institute and the Robert Wood John
Foundation reports that there has a “dramatic decline” in the number of
surprise bills since the enactment of the New York law. “Virtually all stakeholders we interviewed
reported that New York’s law has successfully helped protect consumers from a
major source of surprise balance bills.
An analysis of calls to the Community Service Society’s consumer help
line related to surprise balance billing found that 57 percent were resolved
thanks to the law’s protections.” The report also concluded that the law has
incentivized physicians and insurance companies to negotiate before filing for
an independent dispute resolution. As
the authors state, this is consistent with a recent analysis of claims data,
which found a 34 percent drop in out-of-network billing in New York since the
law was in effect.
When cases do go forward, the numbers are nearly evenly split
between what the insurer offered, and the physician requested. Of equal import, the report notes that the
law is having a positive impact of the health care spending in New York where
the rate of growth of health premiums is significantly less than the national
average. According to the Kaiser Family
Foundation, the national average in 2019 was 70% compared to New York at
50%. In addition, the New York Health
Foundation found that payments to physicians were down on average 13% since the
law was enacted. Anthem, Aetna and
United New York also just won a multiple year battle to require that out of
network hospitals in New York be subject to the same arbitration process as out
of network physicians. Clearly these
insurers support this model.
The surprise billing framework in “The No More Surprises Act,”
introduced by Representatives Pallone and Walden, is very similar to the
California state law which has been a failure both in reducing surprise billing
and in encouraging more physicians to contract in network. Both rely on an in-network benchmark which
has further empowered insurance companies and removed any real incentive to
negotiate with physicians.
There is much confusion about why the in-network rates are
troubling to the physician community. It
is important to understand that there is a significant imbalance that currently
exists in negotiations between physicians and insurers. In many cases, the approach from the insurers
is to take it or leave it as they have market dominance. In other cases, physicians will accept lower
rates than costs because they will make up the difference in volume. The single most important reason
why we oppose using the in-network rate as the benchmark is because it fails to
increase “in network” care by giving insurers significantly more power in
contract negotiations with physicians.
This is not speculation on our part. California has proven
this point.
The California law mirrors the surprise billing provisions before
the committee. The data from the impact of this law are in stark contrast to
New York. Since its passage insurers are
terminating long standing contracts with physicians, demanding significant cuts
in reimbursement or closing their networks to new physicians. The result is
more limited networks, increases in deductibles and the potential for decreased
access to care.
This June one of California’s largest insurers sent its new fee
schedule to at least half of its physician organizations outlining dramatic
cuts in payment for hospitals-based physicians.
Some examples of the new payment rates:
- OB-GYN obstetric care: -20%;
- Anesthesiologists: -45% for women’s labor and delivery
epidurals and monitoring lines for life-saving heart surgeries, among
other procedures;
- Radiologists: -19%;
- Pathologists by -20-50%;
Nor is this an isolated example. These numbers are excerpted from
the California Medical Association letter which was shared with the HELP
Committee (attached). They state: “These
are take-it-or-leave-it contracts. If these
hospital-based physicians cannot afford to absorb these substantial payment
cuts from their largest payer, they will be forced out of the insurance
company’s network. They will also be
forced to accept the very low out-of-network payment rates established by
California’s surprise billing law. The
actions of this insurer are the direct result of California’s inadequate
surprise billing laws that do not incentivize insurers to contract with
physicians. Most of these physicians will no longer be able to contract under
these unfair terms. This insurer has
clearly decided it doesn’t need to contract with physicians because it can just
pay the low rates in California law. Access to “in-network” care is in
jeopardy. Patients in California will be forced to wait even longer to see
primary care and specialty physicians.
As patients wait to see their physicians, they may be forced to seek
care in emergency departments when their conditions have worsened and become
more expensive.”
The result is narrower networks, increased out of pocket costs and
the potential of decreased access to care. Access to emergency on call
physicians, including surgeons and anesthesiologists, is also in jeopardy.
While some might think cutting physicians reimbursement is a good way
to save money and to reduce the cost of care, in reality these measures will
increase health care spending. These payments will lead to a collapsing of
smaller physicians’ practices and ultimately an increase in health care costs
as more patients seek care through emergency rooms and out of network
care.
We also understand the importance of the CBO score to this
discussion. From our perspective, the
CBO score is shortsighted and fails to take into the account the impact of a
flawed law on access to care. If
Congress passes legislation which ultimately results in less access to care,
the impact on our patients and costs to the health care system will be far
greater than the current score.
California is already proving this point. We know that legislation based on the New
York model decreases costs, decreases surprise bills and continues patient
access to care.
We strongly urge you to vote in support of the Ruiz Roe
legislation, “Protecting People from Surprise Medical Bills”, which is proven
to protect patients access to care and decrease health care spending. Our goal is to ensure that patients are
protected from these charges and that negotiations that occur between insurers
and physicians are done on a level playing field without any interruption to
patient care.
We look forward to continuing our work with you to improve access
to quality health care for all.
Sincerely,
Maryanne C.
Bombaugh, MD, MSc, MBA, FACOG
cc: Sarah Curtis
