As we all know most patients now in have higher out-of-pocket costs and most are now enrolled in some type of health network that penalizes them for out-of-network care. This one-two combination of higher deductibles and cost sharing combined with balance billing for out-of-network care has caused an outcry in state capitols all across the country.
So far, five states –California, Connecticut, Florida, Illinois, and New York, have enacted legislation to protect patients against balance billing and nine others have legislation under consideration. It’s an issue that doesn’t appear to be going away any time soon—and one that could have significant impact on your revenue streams and bottom line.
Here’s what we know so far:
Increased billing and price transparency is a major issue
A key component of the legislation passed in these states is full disclosure to patients about which doctors involved in their care are out-of-network and what the expected costs for service will be. The New York law goes so far as to require hospitals and free-standing emergency departments to list standard charges for their services.
Informed consent is another hot topic. Legislation under consideration in Ohio would require a patient to give informed consent to be treated by specific out-of-network providers; absent written consent, the provider is prohibited from billing the patient more than he or she would have been charged for in-network care.
States are limiting what providers can charge patients for out-of-network
Here’s where it gets sticky for providers. Most legislation protects consumers from being billed more than their expected plan costs for in-network care, leaving providers and payers to work out payment settlements between them. In California, the law allows providers to bill either the network amount or 125% of Medicare allowable charges, whichever is greater.
As you would expect, audits at the state level reveal the settlements reached for provider payments favor the insurance company more often than the provider, despite the fact that disputes are generally handled by independent committees or review boards. In New York, for example, 2016 data showed that providers won payment disputes just 13% of the time.
Certain specialties are much harder hit
Since balance billing legislation is aimed primarily at hospitals and emergency departments, it’s unsurprising that some specialties are more affected by the legislation than others. The New York data indicated that plastic surgeons providing emergency care accounted for nearly one quarter of the payment disputes resolved by the board. Emergency medicine specialists accounted for 20% followed by orthopedic surgeons and general surgeons, each with about 10% of disputes.
By dollar amount, when the amount in dispute was less than $500, the providers edged out a slight advantage over payers, but when dollar amounts fell between $1,000 and $5,000, the payers won most often.
What’s on the horizon for balance billing legislation
It seems clear that states aim to take the patient out of the resolution process, pitting the payer and the provider against one another with the state acting as arbiter. Utah’s bill goes even further, using national benchmarks to arrive at maximum amounts hospitals and providers can charge patients for care. The Oregon legislation under consideration puts the onus on payers, establishing a “reasonable and customary” amount that all payers must reimburse providers for out-of-network care.
In Oklahoma, legislation is under consideration that requires facilities to disclose the network status of anyone involved in a patient’s care as soon as the patient is stable and give the patient the option to request a different provider covered by the network. It also protects the patient from balance bills that result from emergency care.
If you are wondering how balance billing will affect your bottom line, contact the billing specialists at M-Scribe today for a free consultation.