Doctors and Insurers Agreed on a Major Improvement to the Surprise Billing Issue ― But Is More Progress Possible?
Cover Story — December 2017
Tex Med. 2017;113(12):22–28.
By Joey Berlin
Associate Editor
When medicine and health insurers agree on how to attack a problem, a victory for patients likely will follow suit.
That's exactly what happened during this year's session of the Texas Legislature, when physicians, hospitals, and health plans all agreed on one key solution to patient problems over surprise medical bills.
Medicine and health plans sometimes aren't on the same page, or even checking out their books from the same library. But the Texas Medical Association, the Texas Hospital Association, and health insurers strongly backed Senate Bill 507 by Sen. Kelly Hancock (R-North Richland Hills), which will greatly expand mediation for out-of-network bills once it takes effect for new health claims Jan. 1.
SB 507 could help patients reduce unexpected out-of-pocket costs while preserving physicians' right to balance bill. Along with expanded mediation, it also requires bills for out-of-network care to come with an understandable summary of patients' mediation rights.
Still, nasty financial surprises for patients won't end with the passage of SB 507, and physicians believe there are other potential ways to improve the surprise-billing landscape, such as improving contract negotiations between physicians and health plans and pushing for more accurate network directories. But despite the agreement on expanded mediation, doctors and health plans aren't quite aligned on some of those other areas.
"If we don't come up with some type of agreement on contract negotiations, then guess who suffers? The patient," said Beaumont anesthesiologist Ray Callas, MD, former chair of TMA's Council on Legislation. "We have not had serious discussions. We keep pointing the blame. And most of the blame, if you talk to most physicians, is on health plans that do not want to negotiate a fair market rate for services rendered by physicians."
Expanding Patient Rights
The stories have emerged seemingly nonstop in recent years: A patient visits an in-network facility, receives care from an out-of-network practitioner at that facility, and later gets hit with an unexpected bill. It happens not only in Texas, but all over the nation, with physicians often citing narrow health plan networks as the primary cause. (See "No More Surprises," May 2016 Texas Medicine, pages 26–36.)
The hope is that SB 507 not only affords patients more mediation rights, but also makes them more aware of their health plan coverage and its limitations.
Mediation already was available to patients who have coverage through insured PPO plans, as well as plans offered by the state's Employees Retirement System. It applied to services provided by out-of-network, facility-based physicians, such as anesthesiologists, pathologists, and emergency department physicians, at in-network facilities.
SB 507:
- Added certain Teacher Retirement System plans to the mix;
- Expanded mediation to all physicians and others who provide out-of-network services at in-network hospitals, ambulatory surgical centers, birthing centers, and freestanding emergency care facilities;
- Included claims for out-of-network emergency care; and
- Maintained the mediation threshold of more than $500 after copayments, deductibles, and coinsurance.
"We thought it wasn't fair just to include a small portion of health care providers," Dr. Callas said. "We opened it up to where there's a lot more transparency, to where more providers are under the mediation umbrella, and so we're excited about that."
The new law also requires practitioners and health plans to include a "conspicuous plain-language explanation of the mediation process" with any bill or explanation of benefits for out-of-network services. That notice must include "a statement that is substantially similar" to this: "You may be able to reduce some of your out-of-pocket costs for an out-of-network medical or health care claim that is eligible for mediation by contacting the Texas Department of Insurance at (website) and (phone number)."
TMA lobbyist Darren Whitehurst says the expanded mediation "gives the patient another tool to use." Not only does the law provide more dispute resolution over surprise bills, but Mr. Whitehurst says there's also the potential that it opens more eyes to the problem health plans are creating.
"I'm hopeful it will show that these plans that are increasingly putting together really poor networks of providers, that it will expose them," Mr. Whitehurst said. "Because the more patients they have showing up in these mediation conferences, the more it will demonstrate the fact that they're putting together inadequate networks."
During the legislative session, TMA noted the overwhelming success of the mediation process since it was introduced in 2009. In 2016, according to the latest Texas Department of Insurance (TD) statistics, patients had filed more than 1,600 mediation requests, with 93 percent settled by teleconference.
Before SB 507, Texas law already provided a disclosure route for facility-based physicians such as anesthesiologists and emergency department doctors to avoid mediation for an otherwise eligible out-of-network bill. That law remains in place and is now expanded to all physicians who provide medical services in a facility. In most circumstances under SB 507, to avoid mediation, a facility-based provider must disclose the following and receive written acknowledgment of these disclosures from the patient:
- An explanation that the facility-based provider doesn't have a contract with the patient's health plan;
- Projected amounts the patient will be responsible for; and
- Circumstances under which the patient would be responsible for payment of those amounts.
If the patient is then billed less than or equal to the amount acknowledged on the disclosure, the physician won't be required to mediate the charges.
The Contracting Front
Of course, inadequate networks will remain that way until the insurance companies allow more physicians in network. For that to happen, Dr. Callas says more successful network-participation negotiations between doctors and insurers need to take place.
More and more, those negotiations don't even start despite a physician's efforts, according to TMA's 2016 Survey of Texas Physicians. An increasing percentage of physicians are trying to join networks of insurers with whom they don't have contracts, according to the survey. Also, on the rise, however, is the percentage of physicians in that group who get no response at all from the insurer, with 35 percent saying the health plan ignored them. Meanwhile, nearly one-third continue to say the health plan made an unacceptable offer. (See "Network Issues by the Numbers.")
"The health plans continue to hide behind a wall, and there might need to be mediation in negotiating [between] physicians and the health plans," Dr. Callas said. "Most physicians want to be in network, but the health plans look at it from a financial standpoint, and they don't want to put them in network."
Robert Morrow, MD, president of Blue Cross and Blue Shield of Texas' (BCBSTX's) southeast market, says Blue Cross is doing everything it can on that front. Regarding contract talks, Dr. Morrow told Texas Medicine, BCBSTX contacted "all known out-of-network freestanding ERs" in the state last year and invited them into the BCBSTX network, hoping for a dramatic reduction in balance bills.
"And in response to that outreach, not a single facility chose to contract with us ― many of them before they even saw the rates we were offering," Dr. Morrow said.
Dr. Morrow says that networks are "built to serve a need" and that 80 percent of BCBSTX members come to the health plan through employers, many of whom offer self-funded insurance. Decisions on network carry "a cost and a premium reality," he said.
"It's a negotiation, and quite frankly, we're doing everything we can possibly do. Health care costs in this state are increasing at unsustainable rates," Dr. Morrow said. "And so I think the extent to which we can work with our providers and we can work with our employers and our patients to find ways to help manage this … cost to health care in the state, I think, serves everybody well."
The Directory Front
Accurate, up-to-date health plan directories would allow patients to see which physicians are in network and which aren't. TMA's 2016 survey showed 60 percent of physicians have found they aren't listed in a health plan directory when they should be. On the flip side, 56 percent found themselves listed in a directory when they weren't participating in that plan.
Rep. Greg Bonnen, MD (R-Friendswood), tried to address inaccurate and outdated directories during this year's legislative session, with TMA-backed House Bill 2760, which would have required daily directory updates. It also would have required TDI to investigate noncompliant health plans at the health plan's cost, and it would've allowed TDI to investigate any insurer who reported terminating "a significant number" of practitioners without cause. But that bill stalled in the House Insurance Committee. A companion measure, Senate Bill 2210 by Senator Hancock, originally would have required directory updates every two business days. That bill passed the Senate late in the session and never received a hearing in the House.
Dr. Callas testified for TMA in support of HB 2760.
"I think these data show that now more than ever, it is important for health plans to communicate information accurately about a physician's or provider's network status and for TDI to receive additional authority to examine the adequacy of networks used by health plans," Dr. Callas told the committee. "With modern technology, there should be no issue in business daily updates to a health plan's online provider directory."
Jamie Dudensing, chief executive officer of the Texas Association of Health Plans (TAHP), says a number of pilot programs on directory updating are taking place around the country, with health plans "moving to more and more technology to put this into the hands of physicians so that they can update the directory information themselves in real time."
In his written testimony, Dr. Callas also noted that TDI had approved waivers for several health plans that had major network deficiencies in certain specialties.
"If a network inadequacy is caused by a health plan terminating physicians and providers for no good reason, then TDI should increase its scrutiny of that plan and should not grant it a waiver from network adequacy requirements," he said.
Working for Patient Understanding
TMA sees patient education and involvement in billing issues as key to addressing surprise bills. But health insurance itself continues to puzzle patients, even many of those who are sure they understand the basics. A survey of 2,000 health insurance consumers by PolicyGenius, released in November 2016, showed a vast majority of participants overestimated their knowledge of basic health insurance terms. The survey asked respondents whether they understood four terms: deductible, coinsurance, copay, and out-of-pocket maximum. Only 4 percent could correctly identify all four terms, although the percentages of people who believed they "definitely" understand each term was much higher; on average, 68 percent believed they understood each individual term.
"I think that there has to be some understanding of the consumer about what product they're buying," said Houston ophthalmologist Keith Bourgeois, MD, chair of the TMA Task Force on Balance Billing, which shaped TMA recommendations to the legislature before this year's session. "They think that health insurance is like the old days, that they submit the bill and then it gets paid. But they don't commonly read the fine print."
Houston-area emergency physician Diana Fite, MD, who works in hospital and freestanding emergency department settings, says SB 507 will improve patients' control over their medical bills. It's hoped that SB 507's emphasis on notifying the patient of mediation rights will help them understand it, and Dr. Fite thinks that could lead to something more.
"Every time you get a patient more involved with the process, there's an increase in understanding and then maybe they'll be able to communicate with the insurance companies that they don't think it's fair that the insurance companies are putting the burden on the patient and not taking the responsibility themselves to cover the way the patients think they are being covered," Dr. Fite said. "So I see a very positive side to increasing the knowledge of mediation possibilities and increasing the number of ways a mediation can occur."
Mr. Whitehurst, the TMA lobbyist, says TMA would like to advocate for physicians to have enough information ― such as the patient's current deductible status and coinsurance amount ― to perform "real-time claims adjudication." That is, the physician's office could let the patient know at the time of service what they owe and collect it either then or shortly thereafter.
"There are a whole bunch of reasons why that doesn't happen," he said, "but I think ultimately the goal is to be able to provide that information at the time of service."
Right to Bill for Services
Preserving Texas physicians' right to bill for the services they provide was particularly important for TMA during this legislative session in light of other states' recent actions to severely restrict or, in some situations, ban balance billing. In fact, the two states that rank with Texas in the top three in population both passed measures cracking down on balance billing during their 2016 legislative sessions.
In July, a 2016 California measure went into effect that eliminated balance billing by out-of-network practitioners providing nonemergency care at in-network facilities. The California law leaves the patient responsible for "only the same cost sharing required if the services were provided by a contracting individual health professional," while the out-of-network physician would receive either the average contracted rate or 125 percent of Medicare payment, whichever is greater.
Florida passed a measure in 2016 that prohibited out-of-network practitioners at in-network facilities from balance billing PPO patients. Balance billing of emergency care for those patients also was prohibited. Physicians providing care in those situations are paid the smallest of three amounts: the physician's charges, the usual and customary charge for that community, or a mutually agreed-upon charge between the physician and the health plan.
Mindful of the negotiating power physicians would lose if their ability to balance bill disappeared, TMA will continue working to ensure those prohibitions don't come to Texas. Fort Worth radiologist Tilden Childs, MD, says maintaining physicians' payment choices, including balance billing, is imperative "to prevent us from becoming employees, so to speak, of the insurance companies."
"If we can't bill a patient for a service when we have no relationship with a third-party entity, then that seems pretty absurd to me," he said. "If a patient purchased [an insurance] product and the product doesn't do what the patient wants, that's really not my fault or my responsibility."
"Physicians are a business just like anybody else," Mr. Whitehurst said. "And if they're not getting paid, they're not going to be in business for very long."
Joey Berlin can be reached by phone at (800) 880-1300, ext. 1393, or (512) 370-1393; by fax at (512) 370-1629; or by email.
SIDEBAR
Network Issues by the Numbers
According to TMA's 2016 Survey of Texas Physicians, more than one-third of doctors who asked to join a health plan network did not get a response, and most doctors have been part of an insurer's network directory error.
- 29% — Percentage of physicians who approached a health plan about joining its network, up from 24% in the 2014 survey
- 35% — Share of those physicians who received no response from the health plan, up from 29% in 2014
- 32% — Share of those physicians who received an unacceptable offer from the health plan
- 60% — Percentage of physicians who detected cases where they were not listed in a health plan's directory when they should have been
- 56% — Percentage of physicians who were listed in a directory but shouldn't have been
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SIDEBAR
How Mediation Works
The rules of mediation for an out-of-network health care bill, according to the Texas Department of Insurance (TDI):
Once a patient makes a request for mediation for an eligible claim from TDI, an informal phone conference must take place within 30 days. The formal mediation will be held within 180 days of the request, if the dispute isn't resolved before that.
The goal of mediation is to reach an agreement on the practitioner's charge for the service and the amounts the patient and health plan each will pay the practitioner. Mediations can't last longer than four hours unless the practitioner and insurer agree to mediate longer. If it doesn't result in an agreement, the dispute may be referred to a special judge for resolution.
Patients have a right to a mediator appointed by the State Office of Administrative Hearings, or the parties involved in the mediation ― the practitioner, insurance carrier, and patient ― can mutually agree on a mediator. Mediations must be held in the county where the health care services were provided. The insurer and the practitioner each pay half of the mediator's fee. Patients aren't required to attend the mediation conference.
SIDEBAR
The Truth About Surprise Bills
Connect the dots between insurance companies' business practices and the stressful surprise bills patients get in the TMA white paper, "The Truth About 'Surprise Bills': How Health Insurance Company Practices Leave You Without the Coverage You Thought You Bought." The paper explains the factors involved in surprise billing in language written for laypeople, journalists, and policymakers. To download the white paper and easy-to-understand handouts for patients, visit the TMA website.
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