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Proposed federal bills limiting OON billing

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  • Avatar okayplayer 
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    https://www.modernhealthcare.com/politics-policy/physician-hospital-groups-gear-up-fight-surprise-medical-bills

    Trying to educate myself on proposed federal legislation to limit OON billing and what it means for physician specialty groups like mine (smaller groups who are virtually always in network). It seems to me the loudest opponents to restraints on OON billing are national management companies for ER/radiology/anesthesiology like Envision, TeamHealth, etc who routinely use OON billing to generate revenue.

    What about groups like mine who don’t engage in this practice? Is the concern that if you eliminate the leverage from going OON that you will see the negotiated in network rates drop? Is this a real concern that you guys share? How do you see this playing out?

    Trying to read the tea leaves and see how devastating this will be to reimbursement in my field.

    #239783 Reply
    Avatar okayplayer 
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    Neglected to mention that I am in a specialty with extremely low Medicare reimbursement compared to commercial payers compared to most other specialties. The most concerning elements of the proposed legislation tie OON reimbursement to 133% of Medicare reimbursement (IF that became the standard reimbursement rate for commercial payers, it would amount to a 60-70% paycut for physicians in my specialty).

    #239785 Reply
    Avatar wcinewbie 
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    I don’t know what to think about OON billing.  We always hear on the news about the arguments for and against OON billing.  Insurers keep wanting to push costs down (and pocket the difference for themselves) while providers are trying to defend their income with patients caught in the middle.  There are many areas in the country (I know of California and Florida specifically) where IN-NETWORK rates for both commercial insurance and medicare advantage are BELOW medicare rates.  Worse, capitation seems be gaining a foothold in many areas.  That is a travesty and I don’t understand why that fact seems to be left out of every conversation.  Is it only happening in my specialty (surgical specialty)?  I’d love to comissurate with anybody else in the same situation.  Please let us know your specialty and region.

    #239804 Reply
    Dreamgiver Dreamgiver 
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    What happens if this is not stopped is that insurance companies will drop providers so that when patients come to your practice, you are forced to accept the lower out of network rate with no opportunity to negotiate. It is a big disaster no matter your specialty. Nobody likes balance billing, but this is the wrong way to go about it. We like to argue about minuscule ER differences for funds on this forum. Talk about getting our priorities wrong. This is a big deal, glad people are talking about it.

    #239870 Reply
    Avatar Tim 
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    The problem comes when a hospital has a contract with a group to provide services and the patient pays the bill.

    Provider, facility, and insurance company have the ability to negotiate. Not sure setting rates belongs with the government. That seems to be headed for disaster.

    The solution seems to revolve around “the rules of negotiation “. That’s where the leverage can be used, not in fairness, just simply to force unfair advantage.
    One price on hospital, one price physician, one price for insurance. Whether is the greater of Hospital or group, or lesser, it needs to be settled. I don’t know the answer, but I am fairly certain government can screw it up royally.
    We have rules against “price gouging” and “discriminatory pricing “ and “price fixing “. Not what fair market value is .

    #239957 Reply
    Avatar jhwkr542 
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    I think of these scenarios simply. If you’re negotiating whatever cpt code with an insurer, there has to be incentives for both sides to negotiate fairly. Physicians want to be in network because they will attract that insurers customers. Insurers want to negotiate the price down, because if customers are out of network, the price is sky high (think 80% OON>90% in network). If the OON cost defaults to essentially slightly more than Medicare rates, why would insurance companies even bother negotiating? Doctors’ strongest tactic is to threaten going OON. If this is taken away by government setting the price, then doctors are disadvantaged greatly.

    #239964 Reply
    Avatar southernerdoc 
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    The New York law is the best I’ve seen.  Reimbursement is tied to claims data as maintained by an independent organization (FAIR Health Database) and not to a median rate, rate tied to Medicare, etc.

    The median rate idea is a really bad idea.  Let’s say you have group A, B, C, D, E, and F.  They’ve all negotiated in-network rates with Insurer 1.  A gets $60/visit, B $60, C $80, D $80, and E gets $100 per visit.  The median rate is $80.  So out-of-network bills will be paid at the median rate — $80.

    Group E’s contract is coming to an end.  Insurer 1 will tell them they can take $75/visit in return for decreased billing paperwork or they can choose to not negotiate and receive the out-of-network median rate.  They choose the less billing option.

    Now you have A $60, B $60, E $75, C $80, and D $80.  Suddenly your median rate has shifted and is now $75.

    The cycle continues until you push down the median rate so that it’s near the Medicare rate or even below it.

    Now’s the time to write, call, and visit your legislators.  This will affect all specialties and gives a major advantage to insurers.  We need to eliminate the median rate or any fixed rate tied to Medicare (which is arbitrarily set).  Use an independent claims based system like the FAIR Health Database.  Also, negotiation and forced arbitration are a must.  The bill of $1200 should not be the floor.  $300 should be the floor for arbitration.

    #239989 Reply
    Avatar loeffy 
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    In the above example, what’s to stop groups A & B from going OON to receive the higher median rate?  Thus raising the median rate.

    #240090 Reply
    Avatar jhwkr542 
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    Not having patients come to them because they’re OON. Or having a hospital contract that mandates they be in network with major insurance carriers.

    #240100 Reply
    Liked by CordMcNally
    Avatar loeffy 
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    So in that case, who is OON that will be negatively affected? Sorry, not trying to be dense, just trying to understand.

    #240123 Reply
    Avatar jhwkr542 
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    So in that case, who is OON that will be negatively affected? Sorry, not trying to be dense, just trying to understand.

    Click to expand…

    I want to clarify your scenario: A, B, C, D, and E groups are all in network above. A and B have the lowest negotiated rates and are below median rate. They choose to go OON. Correct?

    Patients start complaining that they pay more because they’re OON and have to pay more co-insurance and have higher deductibles. Patients start moving to groups C, D, and E. Hospital #1 has contracted with group A. Because their contract requires them to be in-network with insurance Z, they give them a 90 day ultimatum. Either lose the contract or go back in network (presumably at their previous lower rate).

    southernerdoc did a good job of outlining how groups with better contracts would also be negatively affected.

    #240127 Reply
    Avatar loeffy 
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    Thanks for the example and clarification. Couldn’t there be a scenario where there exists a group F, an OON group charging whatever they want pre-legislation.  They aren’t losing patients and they work at hospital #2, which doesn’t require in-network status.  Logically this must exist today because that’s the whole purpose of this legislation.  Group B also works at hospital #2 and with the new legislation they realize they can go OON and retain patients like Group F, still be allowed to practice in the hospital, and get a higher reimbursement while raising the median rate overall.  Group A in your example, seems to be in a weak negotiating position no matter what legislation exists.  If they’re required to stay in-network then the insurance has all the leverage to dictate reimbursements.  Basically I’m thinking that an equilibrium could be reached, as opposed to driving reimbursements further and further down, but maybe I’m missing something.

    #240160 Reply
    CordMcNally CordMcNally 
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    Basically I’m thinking that an equilibrium could be reached, as opposed to driving reimbursements further and further down, but maybe I’m missing something.

    Click to expand…

    That’s the whole point. The insurance and government both want to drive reimbursements down.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #240166 Reply
    Liked by Zaphod
    Avatar jhwkr542 
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    With the new bill, the OON rate will be the legislated rate (median or some percentage of Medicare, which is likely lower than current market rates), not whatever the group chooses. So group f, being OON, can’t charge $100. They’d be required by law to charge the set rate. Your scenario exists currently. But if the OON rate becomes the much lower legislated rate via this bill, why would insurance companies even negotiate? The insurance companies all of a sudden are ok with OON rates because those are lower than their current rates.

    #240170 Reply
    Avatar loeffy 
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    jhwkr542 , apologies you might’ve misunderstood my example, I tried to edit for clarity.  But in any case it seems hospital requiring physicians to be in-network really limits negotiating power and may be the even bigger issue.

    #240171 Reply

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