Solving Surprise Billing without Jeopardizing Rural Health Care

This article originally appeared in The Hill.

Congress is moving steadily forward on an issue that has garnered what has become rare broad bipartisan consensus: surprise medical billing. Rightfully so—surprise billing is a concern that doesn’t care about party lines; it impacts all patients struggling to keep up with rising health care costs and diminishing access, here in Missouri and across America. A federal solution is long overdue.

No one who has recently gone through the emotional and physical stress of seeking medical care through our already complicated, confusing health care system should have to worry about getting hit by a surprise medical bill. However, it is happening more and more often as insurance companies continue narrowing provider networks—weeks after receiving care, patients get bills in the mail for hundreds, thousands, or even tens of thousands of dollars for treatments and services they thought would be covered by insurance.

Surprise billing has a particularly debilitating impact on the most vulnerable, hard-to-reach patient populations, including those living in rural parts of our country. While congressional action is certainly needed, our federal legislators must be sure that whatever solution they ultimately pass does not make a bad situation worse by threatening access and affordability for any patients, especially those who already face often-insurmountable barriers to care.

Unfortunately, some of the proposed legislation in both the House and Senate would try to end the practice of surprise billing by using a benchmark approach to determine and set physician reimbursement rates for out-of-network care. While this in theory would protect patients from surprise billing, in practice it could potentially be devastating to rural health care.

The main trouble with benchmarking is that it doesn’t account for the simple truth that the cost and complexity of providing clinical care—even the same treatment or procedure—varies wildly in different regions, for example in urban versus rural areas, or facility types. Benchmarking creates a one-size-fits-all, take-it-or-leave-it system that would end up underpaying doctors while giving an enormous amount of power to insurance companies to determine what care patients can access and which providers they can visit.

By setting arbitrarily low rates, benchmarking would transfer billions of dollars in losses directly to the health care facilities that serve our communities. Many of these hospitals, ERs, and other clinics are struggling just to keep their doors open as it is. This is especially true for the remote, rural facilities that serve as safety net health care centers, which treat a larger proportion of Medicaid and underinsured patients.

As more rural hospitals attempt to contend with these losses, many will be forced to consolidate or else face the threat of closing down for good. Both of these options would only eliminate options for patients, threatening their access to health care while increasing costs and wait times. Government benchmarking is nothing more than a one-sided solution that will threaten some of Missouri’s—and our country’s—most vulnerable, at-risk patients.

Good thing there are more common sense, reasonable solutions in Congress as well. Competing legislation in both chambers of Congress would seek to resolve the issue of surprise billing and settle payment issues between insurers and providers through another process called Independent Dispute Resolution—IDR, for short. IDR would allow insurance companies and health care providers to negotiate payments on an individual basis.

Overseen by a third-party mediator, IDR would encourage both “sides” to submit their most reasonable amount, which would be used to determine a final payment. Until that time—typically in about 30 days—hospitals would be paid an interim amount that would help provide an extra measure of financial stability so they can continue providing the highest quality of care possible to the patients who need it the most.

Of the two solutions, benchmarking has a fairly questionable track record in the few states that have attempted it. Texas tried a similar approach, only to have to replace it with an IDR-style process just this year. In New York, however, where IDR has been in use since 2015, patients have been effectively protected from surprise billing while network participation has increased and out-of-network billing has declined dramatically—all while keeping emergency care costs stable.

It should be fairly obvious which solution Congress should seek to replicate on the national level. For the sake of rural health care here and across the country, Congress needs to back the IDR process and make certain that it is part of the final bill they pass to end surprise billing once and for all.

Judy Baker is part of the faculty of NYU Wagner's Online Master of Health Administration degree program, a former member of the Missouri House of Representatives, and former Regional Director, Region 7, for the U.S. Department of Health and Human Services.