Massachusetts Medical Society: Joint Letter to Conference Committee on Out of Network Billing in State Health Care Cost and Access Bill

Joint Letter to Conference Committee on Out of Network Billing in State Health Care Cost and Access Bill

Re. S. 2573 and H. 4639

Dear Conferee,

The physician community writes to share our opposition to the out-of-network billing provisions in S. 2573 and in support, with a modest tweak, of the out-of-network billing provisions in H. 4639.  

How much to pay out-of-network providers has been a topic of conversation in the past 18 months as the legislature and others have worked to understand the issue and what impact it may have on patients. The Massachusetts Medical Society and many medical specialty societies pledged our commitment to finding a solution and are pleased that the House of Representatives proposes a nuanced and carefully targeted approach. 

We support the use of a transparent system so both providers and payers are treated fairly. To that end, providers must have the ability to confirm they are being paid accurately. 

We support the House’s proposed rate of 115% of the average contracted rate.  To assure the state establishes a transparent process for calculating the average contracted rate, we respectfully suggest that the initial calculation be based on 2017 rates or the first year a new CPT code is in use and that annual adjustments be made using the growth rate of potential gross state product, the figure used to set an annual health care cost growth benchmark.  This will address any concern about unfair or unnecessary increases in medical expenses and greatly simplify the process by avoiding an annual determination of the average contracted rate. 

We support using an in-network rate to pay providers who may be out-of-network for a particular product but who otherwise participate with that insurance carrier.

We also fully support consumer protections in both bills that confirm current state law holding a patient harmless when he or she receives unavoidable out-of-network bills. This keeps the patient out of the middle of disputes between payers and insurers. We further support the House’s provision for a dispute resolution process in the event a dispute between a payer and provider cannot be resolved. 

The Senate bill would impose a biased system of rate setting for out of network providers that favors insurers over patients and physicians, and mandates unworkable patient information requirements on physicians that are difficult, if not impossible, for physicians, to comply with. We strongly encourage close attention to the “notice” provisions to ensure that patients receive the most important information about the potential cost of their care, but are not overwhelmed with excessive information and disclosures at every encounter with a physician office.  

We oppose the Senate bill’s provision regarding the default rates set for providers who have no contractual relationship with the carrier.  Until January 1, 2020, the rates for out-of-network emergency and non-emergency services for these providers would be set at no more than the 80th percentile of allowed charges for a particular healthcare service performed by a healthcare provider in the same or similar specialty and same geographic region using a benchmarking database specified by the Division of Insurance.

Once this provision for establishing a default rate at the 80th percentile expires in December 2019 under the Senate bill, the HPC and the Division of Insurance will be responsible for determining the default rates. Notably, these sections give the HPC complete power to recommend non-contracted commercial rates that, once adopted, would be in effect for five years.  We do not support changing the fundamental mission of the HPC from a policy-setting organization to a rate-setting entity.  Additionally, these sections include no protections for providers against artificially low rates and no sanctions on insurers that could decide to develop significantly limited networks knowing that the out-of-network rate will be favorable to them.

A fair and transparent reimbursement standard keeps patients out of the middle, strengthens their access to care, and keeps costs for services predictable.  Most doctors want to be in-network.  By creating healthy incentives, this bill can help maintain strong networks to ensure ongoing access to quality care. The House bill does just that and we respectfully request that the conference committee accept its out-of-network billing provisions, with the modest changes regarding the establishment of the base rate and any annual adjustments to it, as well as to the notice provisions.

Thank you for your consideration.

Massachusetts Medical Society
Massachusetts College of Emergency Physicians
Massachusetts Society of Anesthesiologists
Massachusetts Society of Pathologists
Massachusetts Psychiatric Society
Massachusetts Radiologic Society


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