Who is to Blame for Out-of-Network Balance Billing?


Hospitals increasingly outsource their emergency departments to emergency medicine staffing agencies. However, emergency staffing is different than temp agencies supplying nurses, physical therapists or radiology techs to meet staffing needs that vary one day to the next. Emergency Room (ER) physicians generate revenue for the hospital and also bill for their own services provided to patients in the ER. A National Bureau of Economic Research study explains why this is sometimes controversial. Using data from a large national insurer, the study finds the average charges billed to patients often  rises after an outside agency takes over staffing for the ER. In many cases, hospital admissions rise, as does up-coding charges to higher-paying codes.

After an emergency medicine agency takes over hospitals often enjoy higher fees and less hassle over staffing. However, patients complain outrageous fees, inflated bills and out-of-network balance billing that catches them by surprise. Complaints are streaming in across the country about high balances owed to out-of-network emergency physician even though patients made sure the hospital was in their network.

There is no easy way to ensure physicians who provide services at the hospital are in-network. Why would hospitals not require physicians staffing their ERs to affiliate with area insurers? Perhaps there’s an unstated agreement; the staffing firm games the system and refuses to join networks and the hospital allows the game to go on since it’s benefiting from increased revenue.

There are two opposing views on why physicians staffing hospital emergency rooms sometime refuse to affiliation with area insurers. Doctors complain insurers low-ball them with paltry reimbursement offers that are below market. Insurers argue emergency room staffing agencies take advantage of patients who are in no position to go elsewhere even though the prices are high. (In reality, the prices are unknown)

For some emergency room physicians joining a network would likely yield lower fees, since their patients cannot easily go elsewhere. Physicians who have not contracted with patients’ health plans are free to charge whatever they want. If the insurer doesn’t pay, the physician can often bill the patient for the inflated balance. One researcher compared this to kind of ambushing patients. It is no coincidence that out-of-network balance billing is more common among physician specialties whose members rarely meet with patients prior to providing care. These include radiology, pathology and anesthesiologists – and of course emergency physicians. Sometimes assistant surgeons are placed in this category.

Across the country more states are taking steps to limit patients’ exposure to surprise out-of-network bills. One solution is to require a “meeting of the minds” between doctor(s) and patients or hospitals and patients before a debt is collectable. A meeting of the minds is already the standard under contract law.

Devon Herrick, PhD, is a health economist and former hospital accountant.


Coming Changes in the Way Medical Debt is Reported


The three major credit reporting agencies have announced major changes in the way medical debt is reported. STAT News reports that about half of all bad debt on credit reports is related to medical bills. Starting in mid-September, Experian, Equifax and TransUnion will all initiate a 180 day waiting period before reporting medical debt on consumers’ credit reports.  This will allow six months for hospitals, clinics and doctors to work out medical bill payment disputes with insurers and patients.

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Dallas-based think tank, NCPA, closes its doors after 34 years


Contact: Reagan Stewart at 214-891-3340 or reagan_stewart@sbcglobal.net

DALLAS, TX — The National Center for Policy Analysis (NCPA), a 501c3 public policy research organization, announced this week that its Board of Directors has voted to dissolve the organization effective immediately. The thirty-four year old free market think tank has made significant contributions to free-market public policy research and implementation, including Health Savings Accounts, Roth IRAs, automatic enrollment in 401ks, and ongoing work in the areas of taxes, healthcare, entitlements, economic development, energy and national security.

The decision to leave the world of think tanks comes after the organization has faced significant financial challenges over the last three years. The incident is not isolated, according to a June 29 Article in Exempt Magazine. The article mentions a recent survey from The Bridgespan Group, which examined the financial health of nearly 300 grantees and cites, “More than half of surveyed nonprofits have frequent or chronic budget deficits; 40 percent have fewer than three months of operating reserves; and, 10 percent showed no reserves.”

NCPA wants to honor the people who have served this organization and fulfilled its mission in recent years despite significant challenges. NCPA has been blessed with a tremendously talented group of policy experts, communications managers, development professionals and administrative staff who continued to persevere for the sake of empowering Americans and advancing liberty through free market public policy. The spirit of free enterprise, free markets and free people will continue as these individuals move on to the next stage in their careers.

The organization is also grateful for the individual donors, foundations, companies, research fellows and volunteers who have contributed significantly and loyally with their time, energy and resources throughout the organization’s thirty-four year history.

NCPA plans to sell its proprietary analytical models, intellectual property, research archives and other assets. For additional information or to express interest in acquiring assets, contact Reagan Stewart at 214-891-3340 or reagan_stewart@sbcglobal.net


Novel Way to Increase Organs for Transplants


Some states are trying to solve the shortage of donor organs by requiring the legal owners of the aforementioned organs to “opt out” if they don’t want to give away thousands of dollars worth of organs for free at time of death.

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This Week in Health Care


Last week, Senate Republicans released a draft of their health care reform bill, the Better Care Reconciliation Act (BCRA). Like the House bill, the BCRA repeals the individual and employer mandates and rolls back the Affordable Care Act’s (ACA) Medicaid expansion. The BCRA also caps per-person Medicaid spending and gives states the ability to change essential health benefits. The ACA’s tax credits and protections for those with pre-existing conditions are largely unchanged. (Health Affairs)

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Report: Hospitals Who Want to Collect Fees should Provide Better Cost Estimates


Hand Holding Cash ca. 1998

Historically hospitals have not really had to worry about collect directly from patients. On average patient cost-sharing is only about 3% when patients enter the hospital. Health care providers generally focus on insurance reimbursement. Maybe that is changing with the growing prevalence of high deductible plans. Now hospital patients can potentially owe several thousand dollars depending on whether they’ve met their deductibles and their cost-sharing arrangements.

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Senate Better Care Act: A Big Bunch of Sausage Meat Loaf


Backroom policy deals have been described as akin to making sausage. You don’t really want to see it done or you’d lose your appetite. The new senate health bill is more like meat loaf than sausage, however. By that I mean a recipe composed of delicious ingredients mushed together with really distasteful ones in an unappetizing blob that could have been a great burger but wasn’t. Remember that 1977 song “Two Out of Three Ain’t Bad” by the band Meat Loaf? That pretty much sums up the senate health reform bill.

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Bitter Pill Reconciliation Act of 2017


Capture88(aka Senate version of American Health Care Act)

The Senate health bill has some good things and some not-so-good things. It largely keeps too much of Obamacare, except the individual and employer mandates, and repeals most of Obamacare taxes but allow almost no additional health plan flexibility. Oh, it’s pretty good on Medicaid.

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California Money No Good in Georgia’s Special Election


moneyThe special election for Georgia’s Sixth District to fill the seat vacated by Secretary Price was heated. Jon Ossoff was the Democrat who ran for the seat with considerable outside support. He lost, nonetheless. A precinct captain supposedly complained that many of Jon Ossoff’s potential voters were hard to reach because they live with their parents. Democrats purportedly spent $200 per democratic vote, but I guess it wasn’t enough.

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This Week in Health Care


StethoscopeThis post was prepared by research associate, Jerrod Attias.

The Senate Health, Education, Labor and Pensions Committee has begun examining the role that pharmacy benefit managers (PBMs) play in rising drug prices, starting with a hearing this week on the drug delivery system. Drug manufacturers have blamed PBMs for rising prices and Senators from both sides of the aisle have called for more transparency in drug price negotiations. (Morning Consult)

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