Georgetown Experts Help States Weigh Solutions to Protect Consumers from Unexpected Medical Bills

Reports of patient encounters with unexpected bills continue to make headlines. The pre-Thanksgiving release of proposed federal rules to address problems with surprise balance billing, along with ongoing legislative and regulatory action at the state level demonstrate that the issue continues to be a top health policy priority. Federal law does not currently provide consumer protections from balance bills which occur when a consumer must cover the difference between a provider’s charges for care and the amount her insurer has paid to the provider for those services. In the absence of federal safeguards, it is up to states to protect consumers from balance billing or surprise out-of-network charges. This fall, regulators in Pennsylvania and Florida invited Georgetown experts to give testimony on the issue of balance billing as they weigh how best to tackle this issue.

The Pennsylvania Insurance Department held a hearing to gather information about the prevalence and severity of balance billing in the state and to discuss how to deal with it. Led by Commissioner Miller, the Insurance Department Panel heard testimony from approximately 20 speakers, including CHIR’s own Kevin Lucia.  Lucia urged policymakers to focus on balance billing in what he calls the “no-control” settings, such as an emergency situation where a consumer is unknowingly treated by a non-network provider, even if he or she visited an in-network hospital. And consumers may lack control outside of an emergency setting, too, such as when the patient makes sure to identify an in-network hospital but still encounters out-of-network providers in other roles. Lucia describes these to be most compelling situations, because this is when consumers lack any control over who treats them. To help with finding a solution, Lucia provided an overview of approaches that states have taken to protect consumers from balance billing, including: 1) requiring greater disclosure and transparency; 2) enacting flat prohibitions on balance billing by providers; 3) requiring insurers to hold consumers harmless from surprise charges; and 4) establishing rules to ensure fair payment for billed services. He encouraged regulators to take into consideration a combination of these approaches when crafting a solution, but placed an even greater emphasis on shielding the consumer from the dispute process between insurers and providers over reimbursement levels that is typical of balance billing situations.

Florida’s Insurance Consumer Advocate also engaged on the issue, hosting a forum in which Georgetown’s Jack Hoadley was invited to present. Hoadley explained the common scenarios in which balancing billing arise. He also provided a detailed analysis of what states have been up to in their attempts to protect consumers from these charges, discussing, like Lucia, four types of state responses to the issue. Hoadley recognized the challenges in crafting a solution that balances legitimate interests of both insurers and providers. But he explained that implementing a standardized approach to balance billing that is not solely in the hands of the insurance company or the health care provider is a crucial step towards establishing a price for health care services that is deemed fair by all parties involved.

Both Kevin Lucia and Jack Hoadley encouraged states to look at current state approaches to balance billing protection, which can be found in their report recently published by the Robert Wood Johnson Foundation that evaluates the protections in seven states. Researchers at CHIR will continue to track state action on this issue.

Kevin Lucia’s testimony can be found here.

Jack Hoadley’s presentation is here.

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