The Massachusetts Medical
Society wishes to be recorded in opposition to the following bills related to
out-of-network billing: House bill 2164, An Act to ban hospital facility fees
and surprise billing, House bill 2188, An Act Relating to Equitable Provider
Reimbursement, House Bill 587, An act to require written notice of medical
tests outside a patient’s network for insurance purposes and Senate bill 522,
An Act reducing the financial burden of surprise medical bills for patients. The Medical Society is firmly
committed to seeking a solution to this issue, but has strong concerns about
the policies put forth in these bills.
The
Medical Society has long supported a solution that ends the situation whereby
patients receive unavoidable out-of-network bills. Any such solution must: 1)
promote greater education and transparency to prevent such billing situations
when possible; 2) completely remove patients from receiving unavoidable
out-of-network bills by holding the patient harmless and eliminating balance
billing; and 3) find an equitable and sustainable formula for the payment of
services provided, with proper safeguards to ensure fair payment in exceptional
circumstances.
The
aforementioned bills fail to meet the third important criteria: the proposed
default payment formula of 100-110% of Medicare in each of these bills is an
inappropriate benchmark for payment by commercial insurers, and it would have
drastic effects on the sustainability of many physician practices and health
care institutions, ultimately jeopardizing access to care in many underserved
areas. The physician community opposes the use of the Medicare fee as the default
out-of-network physician reimbursement in legislative proposals.
Medicare
is not currently and was never intended to be a broadly applicable index for
commercial physician payment. Medicare rates are not established to represent a
valuation of professional services provided; instead, they function as a
distribution of an already limited budget of this social service program.
Further, Medicare rates differ widely across specialties as evidenced by a
study published recently in JAMA Internal Medicine that found significant
variation in the relative price of services across specialty billing
Medicare. A driving factor of this variation is that the denominator—the
rate of Medicare payment—varies significantly across specialties. For
example, a GAO report highlighted, “Medicare payments were lower than private
payments [for anesthesia] by an average of 67%.” While other specialties
may not have such wide variation, this example underscores why tying any
payment formula to Medicare is not appropriate and will have incredibly
negative impacts for certain specialties which could ultimately impede
patient’s access to quality medical care.
But the implications of an
insufficient reimbursement strategy extend beyond just underpayment for the
current sliver of unavoidable out-of-network care. If a default rate is
substantially below market value, insurers would have little incentive to
negotiate in good faith with physician practices, knowing that any resulting
out-of-network scenario would be reimbursed at a low default out-of-network rate. Having this insufficient
reimbursement rate be an expanding portion of overall payments would
significantly jeopardize the sustainability of many physician practices,
threatening access to care for patients across the Commonwealth. This also has the potential for
disincentivizing physicians from practicing in Massachusetts, making recruiting
and retaining physicians increasingly difficult.
The Medical Society instead believes
that the best legislative approach includes a default formula for reimbursement
of unavoidable out-of-network care that is based upon a percentile of average
charges for a given procedure or service, in the same geographic area, as
determined by a third party, independent, transparent non-profit data base such
as Fair Health. This would promote a sustainable, transparent solution that
fairly reimburses physicians for their services.
Given the complexity of this issue,
the Medical Society supports an inclusive commission or task force, such as
that proposed by Rep. Mariano (H.3571), to look more closely at this issue. The
medical community reiterates its commitment to working with the legislature,
patient advocacy groups, and other stakeholders to see the adoption of legislation
to address out of network billing.
The Medical Society also wishes to
be recorded in opposition to House bill 587, An Act to require written notice
of medical tests outside a patient’s network for insurance purposes. This bill
requires physician offices to notify the patient of any lab work will be done
outside the patient’s network. The narrowing of insurance networks, and the
proliferation of products within a given insurer have all led to an increase in
the complexity of a patient’s insurance plan. Physician offices are having to
dedicate more and more time to handling billing issues. Many patients can name
their insurer, but are unaware of the exact plan that they have. Not all
patients have their insurance card with them at the time of visit, and
insurance plans often change from year to year. Physician office staff tasked
with billing and payer-related issues are focused on ensuring that their own
physician office takes a given insurance product. Expanding this requirement to
ensuring that third parties are also responsible is not a prudent policy
solution. The Medical Society hopes that with comprehensive out-of-network
legislation will come transparency policies that allow for better understanding
of networks-for patients and providers. For these reasons, we strongly oppose
House bill 587.
