Lobbyists for Higher Prices Are Winning the Surprise Billing Debate
If Democrats surrender to lobbyists over surprise medical billing, they won’t be able to enact a public option or Medicare for All.
The Democratic presidential contenders have been vocal in their support of expanding the role of government to bring down the cost of health care. But the current debate in Congress over how to resolve surprise medical billing shows that the priorities of health care lobbyists may be more important to Democrats than lowering health care costs.
Surprise bills occur when a patient visits a health care facility that is “in-network,” meaning it is covered by their insurance plan, but the patient is seen by a health care provider who is out-of-network. Since the insurance policy doesn’t cover out-of-network care, the provider then bills the patient directly for the full price of the visit.
In his recent Forbes piece, FREOPP President Avik Roy highlights an analysis revealing that this practice isn’t uncommon — 27 percent of privately-insured patients who go to an in-network hospital receive a surprise medical bill, with the average cost to the patient being $3,500.
It’s important to address market failures within our health care system where they exist — such as with surprise medical billing — in order to protect patients from exorbitant bills that they had no way to see coming.
That’s why, Avik writes, using the median in-network rate as a benchmark for surprise bills is superior to an arbitration process favored by private equity and hospital lobbyists because arbitration leads to higher prices.
Earlier this month, the House Ways & Means Committee became the third House committee to release legislation addressing surprise billing. Unlike the other two bills, the Ways & Means legislation mandates an arbitration system with no limit on the number of times a provider can use arbitration and no limit on the type of claims that can be taken to arbitration.
This will only exacerbate the problem of private equity firms buying out provider groups such as emergency room physicians and anesthesiologists with the purpose of taking those providers out of network so that they can charge more money.
The fact that so many Democrats in Congress are hesitant to establish a benchmark rate for fear of angering hospitals and bad-faith provider groups shows just how unlikely it is for them to establish a benchmark rate in any other scenario.
For example, all of the 2020 Democratic presidential hopefuls either support a government-run “public option” insurance plan that Americans can opt to buy into, or Medicare for All, which would abolish private insurers and replace them with a single government health insurance plan. In both scenarios, the idea is that a government-run health insurer would drive down costs by setting benchmark rates for provider reimbursement.
So you would think that Democrats in Congress who also support public option or Medicare for All would have no problem setting a benchmark rate for one of the most egregious examples of a market failure in our health care system — surprise medical billing.
But this isn’t the case. After months and months of deliberation, the Democrat-controlled House of Representatives has yet to come to an agreement on how to resolve surprise billing. And the new Ways & Means legislation caters to providers even more than any of the other solutions presented so far. If House Democrats surrender so easily to hospital lobbyists over surprise medical bills, how do they ever expect to pass something like Medicare for All?
To read Avik’s full piece in Forbes, click here.
