The Massachusetts
Medical wishes to be recorded in strong support of House bill 932, An Act
relative to out of network billing. This bill provides a solution to the out-of-network billing
dilemma by prohibiting patients from receiving "surprise bills" and by
laying out a solution to ensure reasonable reimbursement between the health
insurer and the clinician for the services provided. Surprise billing is the
occurrence whereby a patient receives a bill for medical services provided at
an in-network entity by an out-of-network clinician. These situations have been
the subject of much discussion in the Commonwealth of late and are increasingly
due to the narrowing of networks by health plans. This bill addresses
situations in which the patient does not have the opportunity to know with
ample notice that they are seeing an out-of-network provider.
House bill 932 is a comprehensive solution: patients would
be held harmless from these bills, there would be a ban on balance billing.
Gone would be stories of patients being saddled with these bills that were
often unavoidable in the first place.
In addition, this bill provides transparency and disclosure
provisions that will aim to prevent some of these situations from occurring in
the first place (but again, for those situations which cannot be prevented, it
protects the patients nonetheless.) This bill also clarifies a reimbursement
formula between the payer and physician as well as a dispute resolution process
for any exceptional circumstances. This bill would provide a complete and total
fix to this problem for all patients who are subject to MA insurance
regulation.
And second, House bill 932 is time-tested: it has been
proven to work. Much of this bill has been modeled after the New York approach
which was passed in 2014. House bill 932 contains the same patient protections,
and the same reimbursement rate as the New York legislation. (House bill 932
has been adjusted to reduce the rate of unnecessary arbitration which can be
costly and burdensome, and to reduce any barriers that patients need to take to
receive the full protections from these bills.)
Moreover, this is a model that we now know has fixed the
problem and maintained stability in
the health care market. And that is a critically important second objection. We
don’t want this type of legislation to unintendedly shift the dynamics which
allow for good faith negotiations between physicians and health insurers. We
have been pleased to learn that the New York approach has continued to
incentivize physicians and insurance companies to come to contract. This is
evidenced by a report by the New York State Health Foundation from this year
which reported a reduction in out of network emergency services bills from
20.1% in 2013, before the law was passed, to 6.4% in 2015, after its
implementation. Not only did the New York Out of Network billing legislation
protect patients from being responsible for paying the bills, it reduced the
amount of out of network bills that occurred in the first place. We urge your
appreciation of this important point.
We consequently wish
to express opposition to Senate bill 607, An Act reducing the financial burden
of surprise medical bills for patients. While we appreciate that this bill provides some patient
protections, it fails to adequately reimburse physicians for the services that
they provide. The proposed default payment formula of 100% of Medicare is an
inappropriate benchmark for payment by commercial insurers, and it would have
drastic effects on the sustainability of many physician practices and health
care institutions, ultimately jeopardizing access to care in many underserved
areas. The physician community opposes the use of the Medicare fee as the
default out-of-network physician reimbursement in legislative proposals.
Medicare is not currently and was never intended to be a
broadly applicable index for commercial physician payment. Medicare rates are
not established to represent a valuation of professional services provided;
instead, they function as a distribution of an already limited budget of this
social service program. Further, Medicare rates differ widely across
specialties as evidenced by a study published recently in JAMA Internal
Medicine that found significant variation in the relative price of services
across specialty billing Medicare. A driving factor of this variation is
that the denominator—the rate of Medicare payment—varies significantly across
specialties. For example, a GAO report highlighted, “Medicare payments
were lower than private payments [for anesthesia] by an average of 67%.”
While other specialties may not have such wide variation, this example underscores
why tying any payment formula to Medicare is not appropriate and will have
incredibly negative impacts for certain specialties which could ultimately
impede patient’s access to quality medical care.
But the implications of an insufficient reimbursement
strategy extend beyond just underpayment for the current sliver of unavoidable
out-of-network care. If a default rate is substantially below market value,
insurers would have little incentive to negotiate in good faith with physician
practices, knowing that any resulting out-of-network scenario would be
reimbursed at a low default out-of-network rate. Having this insufficient
reimbursement rate be an expanding portion of overall payments would
significantly jeopardize the sustainability of many physician practices,
threatening access to care for patients across the Commonwealth. This
also has the potential for disincentivizing physicians from practicing in
Massachusetts, making recruiting and retaining physicians increasingly
difficult.
MMS also therefore
conveys concerns for H. 967, as it provides substantial uncertainty about
reimbursement rates, and does not establish a reimbursement “floor” to avoid
the highly problematic scenario of an inadequate reimbursement rate dissuading
insurers from contracting with physician groups.
MMS believes that solutions exists to achieve the patient
protections that all parties desire, while also striking a balance in the
provisions outlining reimbursement by defining a fair, adequate formula. MMS
believes that House bill 932 represents a comprehensive, time-tested solution.
We urge your support.
