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As explained in a June 5, 2019 Health Affairs article entitled “Surprise Billing: No Surprise in View of Network Complexity,” the highly publicized issue of “surprise” medical billing often arises from complexities, inaccuracies, and inadequacies of health insurance provider networks. “Surprise” medical bills are bills that patients receive after being treated by a physician who does not participate in their health insurer’s network.  The situation frequently arises when a patient is treated at an in-network hospital and part of their treatment involves an out-of-network emergency physician, anesthesiologist or radiologist. These physicians are often out-of-network because of the low rates that health insurance companies insist on paying them in network.  The article discusses other network issues that often lead to surprise bills.  

First, patients may be treated by an out-of-network physician who patients believed to be in-network with their health insurer due to inaccurate provider directories. Many health insurance companies have been notoriously slow in up-dating their provider directories, and the result is that patients sometimes pick doctors based upon the directories.

Second, surprise billing also arises when insurers don’t have sufficient networks, requiring patients to be treated by out-of-network physicians.  Health insurers are increasingly using “narrow” networks, consisting of a limited number of providers in order to keep their costs down.  When patients knowingly seek treatment from an out-of-network physician because there is no nearby in-network physician available to treat their condition, they can also receive balance bills.  But the article points out that “[r]egulations on network adequacy differ vastly based on program, state or product type and are often inherently meaningless.”

There are seemingly few issues that Congressional Republicans, Democrats, and the Administration agree on, but they all seem to concur that something needs to be done about the surprise billing issue.  Although their insurers may pay a portion of the out-of-network physician’s bill, patients frequently receive a bill for the balance, which in some instances that have gleaned media attention have been quite high.  Therefore, some states such as New York, California, and Colorado have adopted legislation and Congress and the Administration are exploring federal legislative solutions.

Some of the legislative proposals under consideration would include hold harmless provisions, protecting patients from balance billing, others would require health insurers to pay in full, others would require providers to accept the in-network rate as payment in full, and yet others would provide for mediation or arbitration between providers and patients to resolve the issue.  But, as the article concludes “improving the accuracy of provider directories, ensuring network adequacy, and improving network quality, all of which affect a larger number of Americans, defy easy solutions because of the inherent complexity, large resources required and unclear trade-offs involved.”

The Health Affairs article is linked here.