The “first do no harm” dictum for doctors has at least one exception: the wellness of their patients’ finances. Nowhere is that more apparent than in the least welcome surprise patients face in the U.S. healthcare system—the unexpected medical bill, typically delivered courtesy of one all-too-common practice: “balance billing” or “surprise billing.”
What is Balance Billing (or Surprise Billing)?
As many medical billing professionals know, balance billing is what happens when a physician bills the patient for the balance of a fee beyond what the patient’s insurance is willing to pay. It happens most problematically when a doctor, especially a specialist, is out-of-network (OON) for the patient. Without a contractual obligation to the payer to deliver a service at a set rate, OON physicians have free reign to charge patients as they see fit - even when the insurer only covers 50 percent or less (as they usually do).
For instance, if a provider charges $100 for a service, but the payer’s allowed amount is only $70, the remaining $30 is typically billed to the patient. Of course, the actual amount of money involved is usually far higher. A study conducted by the Journal of the American Medical Association found that surprise bills are not only far more common than previously thought (occurring in as many as one-fifth of all elective surgeries involving an in-network hospital and in-network surgeon), but also raise the final bill by an average of $14,083.
Controversies Around Balance Billing
Balance billing has been a hot-button issue for years, and is being a more contentious concern. Why? Due to the rise of high-deductible health plans, especially those purchased on state or national healthcare exchanges, patients are increasingly budgeting for the personal financial responsibilities associated with their care and treatment. Since out-of-network specialists (usually anesthesiologists or surgical assistants) often participate in procedures without a patient’s knowledge or choice, patients feel exploited when they learn that they were charged extra simply because an out-of-network specialist walked into the room while they were unconscious. Given these circumstances, patients and legislators alike are taking increasing note of when and why surprise billing occurs.
Among doctors, medical associations, and healthcare groups, however, balanced billing is typically viewed as an unfortunate reality of the healthcare system, but not necessarily as a flaw. Balance bills earn healthcare providers - especially hospitals - billions of dollars every year to their revenue cycle management. And if an insurer doesn’t cover the full costs of a service, or even a substantial percentage, who should be responsible? To providers, it’s obvious the patient is responsible for the rest. Beyond charging fair rates and helping patients pay in installments, some claim, there’s little else to be done.
Surprise Billing Legislation
But what’s important for doctors and healthcare professionals to know is that changes to the legal landscape of medical balance billing may be coming down the pike. A series of new balance billing laws at the state and federal levels could impact how much payment providers ultimately receive.
The rise of healthcare budgeting is placing greater attention on surprise billing legislation, which varies greatly from state to state. In California, for example, patients are not subject to balance billing when seeking care at out-of-network emergency rooms. Similar protections exist in eight other states, and another seventeen states have passed limited balance billing laws. Insurers and patients see balance billing as a consumer protection issue, which is why a total of 28 states considered imposing new regulations on the practice in 2019.
Although public support for limitations on surprise billing is one of the few issues to enjoy bipartisan political consensus, strong lobbying pressure from doctor and hospital groups led to provisions against the practice being stripped out of a Congressional year-end spending bill in late 2019.
The fight isn’t over yet, however. On February 7, 2020, the House Ways & Means Committee released a proposal version of the Consumer Protections Against Surprise Medical Bills Act of 2020. Where earlier proposals would have controlled costs by establishing benchmark rates on OON providers set to median in-network rates for a geographic area, the new legislation calls for an independent dispute resolution (IDR) process. While large medical practices and insurance companies have favored benchmarking proposals in the past, smaller healthcare practices and individual doctors tend to prefer an external arbitration process like IDR because it provides them with some leverage against insurance companies.
Balance Billing and Your Healthcare Practice
Keeping these potential changes in mind, now may be a good time to get your financial house in order to make sure your medical billing effectiveness (balance or otherwise) is operating at its optimal level. If you’re not being paid as much from payers as you should, contact a trusted medical billing company to see how they can help you.
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