The very term — surprise billing — is alarming and unsettling. The impacts of a surprise bill after receiving medical care, even with good health insurance, can be devastating. These patients are asked to pay medical bills at full “list prices” after their insurers pay for the services delivered by unavoidable out-of-network providers. These bills come at a cost that is often multiples higher than what the rate providers and insurers agree to in ordinary negotiations.
A recent story by The Associated Press suggests one in six Utahns has received a surprise bill. The problem is so bad that NPR and Kaiser Health News now run a “Bill of the Month” segment that highlights these egregious bills around the country.
I, along with many of my legislative colleagues, am committed to finding a Utah solution to this problem. We have spoken to hundreds of patients in person at task force hearings and during the legislative session. I have personally met with executives of every major hospital system, provider group and insurer in search of a solution. Hospitals, providers and insurers have a responsibility to individual patients, but when that doesn’t happen, our laws should protect Utahns from receiving a surprise bill. Protections should extend to any unavoidable out-of-network encounter, such as a hospital-based provider during a routine in-network procedure, or for emergency and urgent care. Individuals in these cases should only be responsible for their normal in-network cost sharing.
At the same time, we need to find a fair and transparent process to compensate providers without increasing pressure on health care costs. Too many families already struggle to pay their medical bills and we do not want any solution that increases this burden. A 2017 Commonwealth Fund report identified 21 states that have taken action, and think tanks have offered several options for us to consider. We can take their work to find the right solution for Utah that fits within these priorities. The hardest part of reaching a solution has been for policymakers to identify a payment standard. This is a feature of every states’ fix, including states that use arbitration. The simplest option relies on a market-based figure, such as average contracted rates in a geographic region. Employers and labor groups favor this type of solution, while it is opposed by providers.
Recently, a well-funded out-of-state group has been on the airwaves offering arbitration as their fix to the problem. They suggest that a New York law can work in Utah. While I am not completely opposed to including arbitration in a solution that ends surprise bills, I do have concerns with the New York model and will be very cautious about adopting arbitration widely to address this problem. The rhetoric from this out-of-state group seems to dodge these complexities and the potential for downside risks. One example of the rhetoric not matching the facts is that they too suggest we use a payment benchmark. The biggest difference is that their preferred number, a percentile of billed charges, bears no relation to real world prices and can be manipulated by providers. That leads to increasing costs. For example, in one state that adopted a billed charges benchmark, list prices for emergency care swelled from 500% to 900% of Medicare’s rates. In Texas, the arbitration system is so overwhelmed that state regulators are “unable to provide timely help to thousands of patients who requested assistance.” Another problem is that arbitration often requires a trigger of a provider sending a balance bill to a patient to initiate the process. Utahns shouldn’t need to initiate a complex and time-consuming process just to be protected from a bill.
There could be many uses for arbitration, such as to challenge whether a benchmark is applied appropriately, and these policies will be considered over the coming months. Regardless of our use of arbitration in a final policy solution, I am confident that, consistent with the “Utah Way,” we will be inclusive and thoughtful in its design and implementation. Government policies should protect consumers, maintain a competitive market and not raise costs. I am committed to finding that solution. Out-of-state groups have airwaves-first strategy, but I’m confident the Legislature will find a superior solution working in partnership with our local hospitals, providers and health plans.
State Rep. Jim Dunnigan represents Utah’s House District 39.