Issues & Insights

Surprise Billing ‘Fix’ Would Endanger Health Care Providers On Frontline Of COVID Crisis

At this extraordinarily difficult time, health care workers are putting their lives on the line daily to treat coronavirus patients. Congress and the Trump administration have recognized the unprecedented challenges facing America’s doctors and hospitals and set aside hundreds of billions of dollars in the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide support for emergency healthcare services. But now, lawmakers such as Sen. Lamar Alexander (R-Tenn.) and Rep. Frank Pallone (D-N.J.) want to take away these vital resources by tethering doctor pay to ludicrously low benchmarks set by federal bureaucrats.

This rate-setting approach would spell disaster for millions of health care workers and facilities nationwide and must not be included in upcoming coronavirus-related relief (or any other) legislation. Shackling doctors and nurses to onerous price controls would only enrich insurance companies at the expense of the entire health care system.

Even as the health care system strains to provide care to millions of additional patients, Alexander and Pallone are as determined as ever to “fix” surprise billing with their fatally flawed rate-setting proposal. The problem of surprise billing is very real and happens when patients receive an unwanted and unexpected bill in the mail days or weeks after being discharged from the hospital. Even though the hospital was likely in-network for the patient, some of the attending physicians may have been out-of-network, resulting in a “surprise bill.” But the lawmakers’ proposed solution is certainly not what the doctor ordered. Their idea to tether provider pay to artificially low, median in-network insurance rates would result in a steep pay-cut to millions of doctors at a time when they’re needed most.

California tried this failed approach years before the pandemic reared its ugly head. In 2017, the Golden State enacted a strict rate-setting regime for doctors in a reckless bid to curb surprise billing. But according to a 2019 survey of California physicians appearing in The American Journal of Managed Care, price controls have led to the widespread consolidation of doctor’s offices and clinics across the state. Study author Dr. Erin Duffy reports:

“Interviewees report that leverage has shifted in favor of payers, and payers have an incentive to lower or cancel contracts with rates higher than their average as a means of suppressing OON [out of network] prices.”

Interviewed doctors expressed fear about the long-term health care landscape in California and have even contemplated leaving to practice medicine in other states. Patients have borne the brunt of these consolidations and increased barriers to doctor recruitment. Access to care complaints are up about 50% since the law’s enactment.

These unintended consequences would be downright disastrous if rate-setting were enacted nationwide, particularly during the worst public health crisis since 1918. On the eve of the pandemic, the Association of American Medical Colleges was predicting a shortfall of around 30,000 to 40,000 doctors in 2020. By all accounts, the doctor shortage has gotten far worse since the start of the coronavirus crisis and COVID-stricken physicians are calling off work at record rates. According to Columbia University National Center for Disaster Preparedness director Irwin Redlener, “Many of us in the business are worried about this, about the backup plan for if they’re ill or have to stay home or – God forbid – don’t survive. The only problem with bringing in retired people is that they’re older, and many will have preexisting conditions.”

Forcing a pay cut on millions of beleaguered doctors would send exactly the wrong message to the health care workers risking their lives everyday to help patients get the care they need. Alexander and Pallone should drop their push for rate-setting, and instead work with doctors and hospitals to get them the support they so desperately need. America’s policymakers can help the country overcome the COVID-19 pandemic, but only with level-headed policies that keep and support healthcare workers on the front lines.

Ross Marchand is the director of policy for the Taxpayers Protection Alliance.

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2 comments

  • Yes, but, then we could get more doctors from India and elsewhere who would work for less and toe the line. Come to Orange County,. NY and see how few old timey physicians you can find. The profession is being debased by some large doctor factories which have gobbled up the private practice docs. This is easy because due to things like needing expensive computer systems for electronic billing , et al, no lone practitioner can afford to hang a shingle anymore. Those nasty unintended consequences strike again.

  • The issue is not doctor’s compensation. it is hospital charges. That is where the real expenses are growing, and as the hospital’s eat up doctor’s practices they are pushing back on attempts by insurance companies to cut doctor reimbursements by inflating specialist rates, or saying you don’t have access to the specialists, to which every insurance company caves almost immediately. So family practice jobs get cut, those doing family practice get a little less in pay (in come PAs and NP’s to replace the fam practice docs), the hospitals pocket the difference and we pay the same rate – or sometimes more.

    When will congress understand that if there is an “enemy” in healthcare its not the docs, and it really isn’t even the insurers.

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