The COVID-19 pandemic is bringing into stark view many of our healthcare system’s shortcomings, including the surprisingly high bills that await many patients in recovery. Surprise medical billing, which is when a patient unknowingly receives out-of-network medical care and gets stuck with higher costs, affects roughly one-in-five Americans. For context, that’s roughly equal to the population of France.
Thankfully, there’s bipartisan consensus in Congress to ending this insidious practice for good. However, a potential compromise that the Senate HELP Committee and the House Energy and Commerce Committee want to include in the next COVID-19 relief package will end up creating new problems for healthcare providers on the front line.
The issue is that the compromise prioritizes something called rate-setting. This would allow insurance companies and lawmakers to meet behind closed doors to determine the amount that out-of-network hospitals are paid for taking care of patients. This will have the unintended effect of placing the high burden of payment directly onto healthcare providers and workers.
For example, if a patient is rushed to an out-of-network hospital, that hospital incurs the cost of taking care of them. Under rate-setting, insurance companies would only have to pay the low benchmark amount that they set with the government, leaving hospitals footing the bill.
Right now, hospitals are already under tremendous strain. America is projected to have a shortage of 139,000 doctors by 2033 and 1.1 million nurses by 2022. In the last 10 years, 130 rural hospitals closed. According to a study by the Chartis Center, 1 in 4 of the remaining rural hospitals are in danger of closure.
By implementing rate-setting, Congress would leave healthcare providers without the vital resources they need to keep America healthy. This would cause political headaches for Congress; one poll found that 75% of Americans believe doctors, not the government, should determine what they should be paid by insurance companies.
A solution to this problem is a system called Independent Dispute Resolution (IDR). Under this system, a patient would never be stuck with a pricey out-of-network bill. Instead, they would only be obligated to pay the median in-network rate for the care they received. If insurance companies attempt to shortchange healthcare providers, then providers would have the option of taking the dispute to a neutral arbiter. This system would hold insurance companies accountable and ensure that healthcare providers get paid properly for services rendered.
Successful IDR systems are already active in politically diverse states, from New York to Texas to Florida, proving that IDR is the fairest and most popular method of ending surprise medical billing.
The need to end surprise medical billing, and doing it right, is more urgent now than ever before. As COVID-19 cases rise dramatically, more Americans need medical attention – meaning more Americans are getting surprise medical bills. As congressional leaders, like Senate Majority Leader Mitch McConnell, work to end surprise medical billing, it is critical that any plan ensure that healthcare providers continue to receive adequate payment for their services, and that insurance companies be held accountable. Independent Dispute Resolution would do just that.
Robert Graham is the former chairman of the Arizona Republican Party and was an adviser to the Donald J. Trump for President campaign in 2016.
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