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House Health-Care Bill Wouldn’t Limit Balance Billing

scalesThe House health-care bill has caps on how much health-insurance policies can require consumers to pay out of pocket. But there’s an exception in the fine print: balance billing.

Balance billing typically happens when a patient goes to a doctor who doesn’t participate in their insurer’s provider network. The insurer generally pays the doctor a share of what it considers the “usual and customary” rate. But this is often significantly lower than the amount that the doctor is charging. The doctor then bills the patient for the difference.

The issue has gotten attention from regulators and consumer advocates in states including California and New York, mostly focused on situations where consumers inadvertently used out-of-network providers, and then were surprised at the bills. This can happen when, say, a person goes to an in-network hospital but doesn’t realize that some physicians who work there don’t participate with the same networks. It can also happen when patients go to out-of-network emergency rooms.

The definition of “cost sharing” in the House bill (see bottom of page 9) explicitly excludes various things, including “balance billing amounts for non-network providers.” So when the bill says that out-of-pocket payments must be capped at $5,000 for an individual, or $10,000 for a family, that leaves out any out-of-network balance billing sums.

“The House bill language does not protect people from balance billing if they go to an out-of-network provider,” says Kevin Lucia, of the Georgetown University Health Policy Institute, who co-wrote a report on the practice.

The issue has always proved difficult to resolve because of the clashing interests of doctors and insurers. Doctors don’t want to lose their ability to do balance billing. Doing away with that practice, they have argued, would destroy their leverage with insurers and make it impossible for them to negotiate appropriate payments. But insurers don’t want to be on the hook to pay doctors the rates they choose to charge, a requirement that would leave doctors with little incentive to join health-plan networks. So the patient often gets left on the hook for the costs.

Image: iStockphoto

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