AAPS Letter to Congress Opposing Counterproductive “Surprise Billing” Legislation

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Senate Majority Leader Mitch McConnell, Minority Leader Charles Schumer, House Speaker Nancy Pelosi, Minority Leader Kevin McCarthy, Ways and Means Committee Chair Richard Neal and Ranking Member Kevin Brady, Energy and Commerce Committee Chair Frank Pallone and Ranking Member Greg Walden: 

We are concerned that Congress is rushing to address the “surprise billing” issue by imposing heavy-handed controls on private medical practice.

Bills are a surprise because patients are led to believe that their insurance is supposed to pay them. The answer to this is truth in advertising, not government rate-setting or forced arbitration.

Networks are a managed-care device to boost insurers’ profits. They are becoming increasingly narrow, and hospitals may be unable to fill their call schedules with physicians willing to sign onerous contracts with insurers. If a facility is in-network, then its facility fees are paid according to the contract. However, fees from physicians who are not employed by the hospital are separate, and not restricted by a contract to which an independent physician is not a party.

Note that Blue Cross was started in order to pay hospital bills. Blue Shield was added to cover physicians’ fees, which have traditionally been separate. Under this arrangement, patients were free to choose the hospital and the doctor—as well as their insurance plan.

Forcing physicians to sign a contract with an insurer, or be bound by its terms even if they don’t sign, or to become a hospital employee, or to leave their practices, increases the power of hospitals and insurers to control the practice of medicine, with their financial interest in reducing their own spending as the first priority. Depriving physicians of their freedom inevitably deprives patients of their freedom to choose and restricts them to whatever cut-rate services are available.

Also, charity care by physicians depends on their ability to be free from price controls. If out-of-network billing is limited by insurance companies to their low reimbursement rates, then it becomes economically impossible for physicians to provide significant charity care. Insurance companies do not fund any of that care, and allowing out-of-network billing of insurance companies is the only way to make significant charity care by physicians possible.

Timely pricing information, and information on how much their insurer will pay, needs to be available to all patients in advance of treatment and plan selection. Fees posted by out-of-network surgeons may even be lower than the in-network rate. This is possible because of freedom from costly, onerous administrative demands.

Price controls always result in shortages and degradation of quality. They are certainly not the answer to a problem caused by lack of honest price signals (transparency).

Please consider alternate proposals that empower patients and physicians rather than increasing the power of insurers.

Respectfully yours,

Jane M. Orient, M.D., Executive Director

Click Here for PDF Copy of Letter