A Texas teacher who was recovering from a heart attack almost had a second one when he saw his $109,000 hospital bill. He was out of his insurer’s network of healthcare providers, meaning the hospital could charge him an arm and a heart for care.
It makes no sense; it’s like being charged $50 for a Pepsi at a Runza in Omaha because you’re from Lincoln.
Hospitals overcharging out-of-network patients has become a major problem. Americans have voiced their frustration with these outrageous medical bills, but a gridlocked Congress had made it difficult for meaningful reforms to pass.
For the past week, Congress has been mulling over Rep. Richard Neal’s (D-Mass.) proposal to form a committee of federal administrative agencies and “stakeholders” (i.e. insurance and healthcare industry lobbyists) to work out a solution to “surprise” medical bills, like the one the teacher received.
Since Congress has removed itself — at least temporarily — from the rulemaking process, lobbyists and bureaucrats would be meeting behind closed doors, outside of the public eye. Ideally, deliberations on this important issue that affects a wide swath of Americans would take place in the open.
Worse, without their elected representatives, Americans wouldn’t have a voice in these meetings. This makes it hard to imagine that they will reach a solution that would put patients first. Rep. Neal’s proposal then would have an adverse impact: It would enable the major insurance companies to use the power of the federal bureaucracy to set favorable rates for themselves.
Those insurance companies will lobby for lower government fixed rates, so that they can increase profits by spending less on patient care. This would actually hurt rural states like Nebraska.
Given that rural areas have fewer patients, rural hospitals run on thin budgets and thinner margins. If insurers reimburse rural doctors and healthcare facilities at lower rates, it would result in a shortage of doctors and cuts to hospital staff, resulting in longer wait times and a deteriorated quality of care.
Nebraska is currently facing a medical personnel shortage: There is a 34% shortage in nurses, and 13 counties do not have a primary care doctor. With low fixed rates, there is no incentive for doctors to open offices in rural areas.
There is, however, an alternative proposal to Neal’s for solving the problem of high out-of-network billing that doesn’t involve price-fixing and hurting us in rural communities.
Sen. Bill Cassidy (R-La.), Sen. Michael Bennet (D-Colo.) and a bipartisan group of senators introduced the STOP Surprise Medical Bills Act, which would protect patients in emergency situations by allowing them to pay their in-network cost-sharing rate for out-of-network care. For non-emergencies, patients would “owe no more than their in-network cost sharing ... [for] service ... by an out-of-network provider at an in-network facility.”
And there is an important difference between Neal’s proposal and this bill: If healthcare providers and insurers disagree on the payment owed, they can dispute it through an open, online process. An independent mediator will make the final decision on a fair bill based on rates in that area.
This bill is in some ways similar to proposed legislation in the Nebraska Legislature. State Sen. Adam Morfeld introduced LB569, which requires healthcare providers to inform patients if they are outside of their network, including any contracting labs they use. The physician might be in-network, but the lab work might not be.
Similar to the STOP Surprise Medical Bills Act, in emergency situations, patients would have to only pay their in-network rate.
Our state is fortunate to have public leaders that are working to address this issue. However, Morfeld cannot do it alone. This requires federal legislation, as insurance companies are national conglomerates and have the ear of federal bureaucracies.
It is my hope that Sen. Ben Sasse, Rep. Adrian Smith and our other congressional representatives join their fellow Nebraskans in putting an end to surprise medical bills by supporting this legislation.