With apologies to Charles Dickens, Congress will want to consider “A tale of two states” when deciding how to handle surprise medical bills.
Surprise bills are caused by insurance companies denying payment for medical care by out-of-network providers — most often because of a trip to the emergency room. California tried to handle the problem by fixing reimbursement rates that doctors, hospitals and other providers can charge insurance companies. The result? After losing their leverage to negotiate their reimbursement rates, health care providers have been closing up shop. Remote, agricultural areas are hardest hit, with health care providers shortages that are approaching crisis level.
In “solving” the problem of surprise medical bills, California has instead made it even harder for patients to see health care providers.
New York tackled surprise medical bills, too, by holding insurance companies accountable for rejecting the claims in the first place. The state instituted an independent dispute resolution system that hears billing disputes between insurance companies and out-of-network providers. In two years, New York’s program has resolved thousands of cases, cut down out-of-network billing by 34%, and reduced emergency room fees by 9%. Patients are not left holding the bill for unexpected out-of-network costs.
As Congress looks to address surprise billing nationally, they must avoid California’s “worst of times” in favor of New York’s “best of times.”