Yves here. Way too much happening, and the nuking of surprise billing bills haven’t gotten the attention they warrant. We did comment on how proposed California legislation was dispatched by what amounted to a handwave.…indicating that way too many people were already clued in to the notion that backing the bill was tantamount to crossing private equity, a career-limiting move for any pol.
By APeticola. Originally published at Health Care Renewal
With constituents pressing for something to remedy unexpected liabilities incurred from “surprise” medical bills, it was expected that surprise medical bill legislation would pass federally in December 2019 as part of an end-of-year legislation package. House and Senate committees had worked for months on consensus legislation that was ready to go, but that fell through at the last moment. What happened?
Some background on the issue: Surprise bills are something of a battleground between payers (insurers) and providers (doctors/hospitals). Insurers want to lower bills, and providers want to raise them. More and more, hardball is being played. If large groups of specialty providers remain out-of-network, they can often make a great deal more money than if they signed a contract for a number agreeable to the insurer. Patients – who can get nightmarish huge bills and be legally liable for them – are the roadkill in this tug-of-war. Private equity firms, who are now buying up group medical practices on the assumption that they can increase earnings substantially, have recently become a major player in the dynamic. Dr. Poses had a good post in September on their role and on their lobbying/advertising efforts. Private equity firms like Blackstone and KKR put a TON of money into the radio and TV ads that urged people to call their legislators to oppose “government rate-setting.”
We’re not talking chump change, here. A recent analysis showed that surprise billing charges in excess of negotiated rates amount to as much as FORTY BILLION dollars annually.
Surprise billing legislation – state and federal – to date has taken two approaches. One approach is to fix the bill with out-of-network doctors based in some way on what an in-network doctor makes. This “benchmarking” approach advantages the insurance companies and self-funded employers.
The other is to rely on arbitrators to settle the dispute about amounts between provider and insurers. Experience has shown that this is in practice highly advantageous to the provider – to hospitals and to specialty groups (and in some cases to their private equity investors). This second approach drives up already-high U.S. medical costs. This major downside, in my opinion, makes it far more in the public interest to lean toward the benchmarking type of solution, while striving for fairness.
The bipartisan consensus agreement, known as the Murray-Alexander bill after Democrat Patty Murray and Republican Lamar Alexander, was initially based on a benchmarking approach, but after compromises that were made, had room for outside arbitration for amounts over $750. The Congressional Budget Office estimated that its passage would save TWELVE BILLION dollars in insurer medical costs, enabling lowering of premiums (this does not even include out-of-pocket patient savings). But, of course, those twelve billion dollars in saved costs are also twelve billion dollars in lowered revenue to providers and their owners.
And so, this bipartisan deal was torpedoed at the last moment by another bipartisan team, Democrat Richard Neal (House Ways and Means committee chair) and Republican Kevin Brady. Everything also indicates that Senate Minority Leader Chuck Schumer – who pushed Murray to back off from her support – was instrumental in killing the deal. Nancy Pelosi, too, was an enabler, allowing Neal to kill the bill. She was heard assuring industry representatives that “we are not going to give a handout to big insurance companies.”
As journalist Jon Walker tweeted:
Disgraceful. @SpeakerPelosi is going around trying to keep your premiums sky high to pay off private equity firms and bad actor hospitals.
Everything about the spiking of the deal indicates that money talks, and loudly, with large donations having been made to Schumer’s Senate Majority PAC by the Greater New York Hospital Association and with donations too to Richard Neal from private equity.
And so the legislation is dead until and unless Schumer and Neal can get their preferred (and price-raising) approach adopted. Meantime, real people are suffering from getting huge bills they have no control over. As Elizabeth Rosenthal observed recently, practices that are both routine and legal in the medical industry are nonetheless in essence fraudulent. The business model of U.S. medicine is fraud – and a very profitable business model it is.
NOTE 1: Although a number of states have passed surprise bill legislation, it is critical to get something passed on a federal level, because most large employer-based plans are federally regulated and state laws don’t apply.
NOTE 2: Benchmarking and arbitration are not the only possible approaches. Another suggestion is to abolish the practice of separate bills from doctors for services provided in hospitals.
37 comments
Comments are closed.
it is so heartening to see such bipartisan cooperation between republicans and democrats in servicing their corporate overlords, and making that business model work!
i guess pelosi can always tell the big insurance companies they should be satisfied with rigging the primaries against medicare 4 all. it was private equity’s turn, is all.
Didn’t you hear? Chuck Schumer and Nancy Pelosi are Heroes of the Resistance. Going without M4A is a small price to pay for their continued fight against Trump.
The Democrat are hand-wringing over Bernie Sanders leading in the primaries. The Republicans felt the same way about Trump in 2016 but then quickly fell in line.
The big message from the voters over the past few years is that they are not interested in business as usual. Many of them didn’t like Trump in 2016, but “business as usual” was less popular than a bad option. Many people voted for him simply because there was a good chance he would blow things up. They didn’t know what they would get but they figured it was going to be different, which was preferable to business as usual. Many of those people may vote for somebody like Bernie Sanders for the same reason.
As much as I’d like to be hopeful about this predatory system changing, reports like these indicate otherwise.
As much as I’d like to be hopeful about this predatory system changing, reports like these indicate otherwise.
Anyone primarying Mr Neal?
Yes, Neal’s opponent is the current mayor of Holyoke, MA, Alex Morse.
https://alexmorseforcongress.com/meet-alex/
https://indivisible.org/statement/indivisible-endorses-alex-morse-massachusetts-1st-congressional-district
Neal has held this very blue seat since 1988, so dislodging him won’t be easy. The primary will happen September 1, 2020.
It’s a worthwhile campaign contribution in my opinion and I’ve already donated twice to him – even though I’m in Texas.
(And I’m proud now that I also gave AOC two small campaign contribution BEFORE she was elected and BEFORE most people knew who she was.)
These races matter – a lot.
Yes, but as Elizabeth, Amy, Pete, and Joe say, you should be able to keep your insurance if you want it.
Bernie should address this issue in the debates every time M4A is attacked by his neoliberal opponents.
Health insurance serves a social purpose that we insist on allowing private companies to perform for profit, with mandates for the social purpose of ensuring the “market” functions. Yet Congress can’t even regulate its creation (ERISA, ACA) to make sure it serves its social purpose.
Surprise billing means that once you can’t work to enrichen your corporate masters, you’re on your own. Your savings are at risk. Time spent trying to protect yourself from financial predators is time away from work, increasing your risk of being “let go.”
Again, surprise billing should be Exhibit A to response to neoliberals like Elizabeth, Amy, Pete, and Joe.
Please discuss, Bernie. This is a prime example of our broken political economy.
I don’t want my insurance. Matter of fact, I consider it a pox upon my existence.
Health insurance needs to go away. M4A, baby!
Medicare Advantage nes to go away as well. It is truly bad, because in is so complex.
US Retirees’ medical bill alse need to be covered if they move out of the US.
Ralph Nader refers to it as Medicare Disadvantage.
There’s an additional subtlety here: when your employer provides you ‘good’ insurance, they simply pass along the cost to the consumer of their product or service.
This might amount to a minuscule amount, but it supports the overall process, as Big Business is able to extract/transfer more of what remains of the people’s wealth to itself.
The rich get richer, the poor get poorer.
Rod Serling struck a cord in the Twilight Zone episode, “To Serve Man”- its a cookbook!
Capitalism is a radical social movement which sees the world in stark terms- predators and prey. Predators take on many forms, and it seems beyond comprehension that the “prey” keep trying to rationalize a way to convince predators not to eat them.
Lies and propaganda are the American way- like apple pie and the American flag. People endlessly complain about many fundamental issues- healthcare, education, terrorism, the environment… but in the end, they still believe America is the greatest place on earth! The land of the self-licking ice-cream cone.
The American political and social elite have taken up the mantra of never give up and never give in- to socialist thoughts and the idea of the common good outweighs their own selfish interest. FDR and his ideas are dead and buried- or should be. Commoners need to feel grateful to their betters. The logic behind this system is everyone, by definition, has what they deserve- what they deserve is what they have the power to take.
Might makes right.
If the likes of Bernie Sanders and Tulsi Gabbard are silenced in this election cycle, as is highly probable, it seems American society has reached a critical mass of corruption which is entering uncharted territory. Why even bother saying we live in a democracy in which the common people have a say in the policies that effect their lives. They don’t- live with it. That is the mantra endlessly pounded into the heads of the American public.
Trump’s election was an abnormality- a side effect of spending too much time and effort looting by the political elite. They won’t make that mistake again, and the gullible public will cheer them along in their efforts.
Real change will happen off-line, and most people will never see it coming. Prey need to quietly and diligently build up defenses against their predators. Attacking them head on is rarely successful or has any lasting quality.
But has Trumps actions following his election actually resulted in any “abnormal” changes? So much appears to be “business as usual” with the difference being more of form or style, not substance. Perhaps “he’s awaiting his second” term I hear from believers…
We’re well past the point of regular people realizing that this game is rigged. If you need non-emergency medical help, you need to treat it like you’re shopping for a used car. Call ahead, ask pricing questions, ask who needs to get paid, ask about lab costs… Everything.
Example:. If you get Shingrix, the new shingles vaccine from a doctor office, you’re likely to pay $300 for it. Same vaccine from Costco, Walgreens,etc is $150.
Be smart.
Depending entirely on your insurance.
For a number of drugs, if you press your questioning you will find it may cost you less to simply pay cash.
You may or may not be able to apply that purchase toward your deductible. Or, that the process for doing so is (intentionally? That would be the old “Invisible Hand” at work, right?)
There’s no way out of this predicament except a WELL-POLICED single payer system (with shadow system for the rich).
The other option: Don’t get sick and die fast.
A cynical view might be that the surprise billing legislation is designed as a “Fetcher Bill” that is a bill that is designed to deliver maximum contributions for a reelection campaign.
Many, many years ago, in Illinois it was common place to bring a “Fetcher Bill” up just before the Christmas break in order to ensure that the legislators had a good Christmas. As an example the legislators might bring up a bill to stop the trains from running on Sundays. This of course was popular / had support with what we call today the religious right or the evangelicals. And since the railroads were comparatively flush with cash this was a lucrative ploy that had real advantages for the legislators. And of course the legislators had no real desire to actually get any such bill passed.
New York State has had surprise billing legislation in effect since 2015 and it works. [that stuff in note 1 about ‘most’ plans being federally regulated; i don’t know what that means but the new york state law applies to all plans operating within nystate.
https://www.ncsl.org/research/health/counteracting-surprise-medical-billing.aspx
Although states have autonomy within their borders, current state laws do not apply to the roughly 60 percent of privately insured Americans enrolled in “self-insured” health plans most common among large employers. In self-insured plans, the employer assumes the financial risk for providing health care benefits to its employees. These plans are regulated by the federal law known as the Employee Retirement Income Security Act (ERISA). Only federal action can protect people guarded by ERISA.
The NY legislation “works,” but in a way that is tending to RAISE prices paid and insurance premiums – so there is still a problem. Greedy private equity would LOOOVVVEE federal legislation that did things the NY State way, but the rest of us should not welcome that.
As noted in the other reply, ERISA-regulated plans – which cover a huge number of insured – are not touched by state legislation.
“doing the same thing over and over but expecting different results” :( The study by Gilens and Page explained all of this and nothing has changed since they did. The elites win and they win every time. We are systematically corrupt. Every apparatus for real change is gamed at this point. To the 99% our system is now being played “above the net”. “Above the net” is a way I have described many things in my life and it all related to playing basketball at our local park in the summer. I was a decent player but at a point every night the players from the local city and some of the players who were playing in college would start to show up. Even though I was a decent player (but 5’9″) the game would completely change to once the first shot was made the play existed above the net since the ball never came below that level again. Every person on the court could dunk the ball. That was when I, and some of my friends, didn’t even try to play but could only watch. As to our government the 99% have become just spectators cheering or yelling from the sideline with no actual effect on the game.
Great analogy. In this game, we have 4 teams (doctors, hospitals, insurance companies, and Congress) that are all supposed to be working for the benefit of the patients/citizens on the sidelines, but are just fighting among themselves for money and power. I guess the private equity vultures are the 5th team, but no one pretends they are supposed to do social good.
this is the difficult Catch-22 for Congress whose purpose in life is to “never interrupt a profit stream”. Here we have a piece of legislation that is a controversy between two private interests, and one of those private parties will lose and have fewer profits. Hence, Congress cannot decide which private party will lose.
If it were the public vs a private interest, it would be much easier. The private party’s profit stream would be preserved vs the public’s interest.
I think it’s a half-truth to say that insurers want to lower bills. Their business is to take a slice off the payment flow from patients to providers, and the bigger that flow, the bigger the yield from a given percentage slice. It’s only when the entire flow starts to dwindle because the patients don’t have the money that insurers have to start worrying about the patients’ financial health.
Investment managers, who choose investments and negotiate their prices on behalf of customers, are all bound by a fiduciary responsibility that prohibits conflicts of interest, overcharging, excessive fees, self dealing, kickbacks, and improper payments. Maybe this should be a legal requirement for every agent who can commit a customer to a binding agreement without communicating its price. What I’m getting at is healthcare providers and insurers would be classified as fiduciaries, which means attempts at surprise billing would likely breach their fiduciary duty.
Not that I like health insurers or want to give them advice, but they could probably squelch a lot of surprise billing by adding language to their contracts penalizing providers who cause out of network bills. Seems like a good way for one of the big companies (buying power is key here) to get some goodwill, really.
“All I want to do is to dip my hand in the money stream that flows outside my window.”
Caution is advised! Test the stream first. Strong currents could tear your arm off.
The piranhas swimming in the stream are more dangerous.
“This deeply moving film should be seen by everyone. It not only provides the most convincing case for socialised healthcare. It points to the better world that would be made under a system where the goods and services so essential to humanity are produced based on social need, not profit, and made available to all.”
John Pilger’s The Dirty War on the National Health Service screening on Australia’s SBS this Sunday
https://www.wsws.org/en/articles/2020/02/15/pilg-f15.html
Just out from The Lancet. M4A saves money and lives:
https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(19)33019-3/fulltext
” Another suggestion is to abolish the practice of separate bills from doctors for services provided in hospitals.”
That would save considerable aggravation, as well as money. Even on Medicare, which is a lot better than nothing, the co-pays add up, and separate bills magnify them.
Are there any doctors who could speak to this?
Any reason it wouldn’t work for the physician to bill the hospital vs billing the patient, with the hospital aggregatjng the billing?
It’s not clear to me how surprise billing hurts the bottom line of private insurers all that much. For plans that don’t have any out-of-network benefits, surprise bills are sent to patients. For plans with out-of-network benefits, I thought insurers are allowed to set a “fair and reasonable” rate they pay for each procedure code performed by an out-of-network provider. The patient is then on the hook for any dollar amount charged above this rate as well as for coinsurance. The insurance company only pays their share (100 – coinsurance rate) of “fair and reasonable”, which is preset.
In other words, scuttling this legislation mainly amounts to Pelosi, Schumer, and Neal screwing the American people, not health insurers. Sickening.
Friday article from NYT on surprise medical billing: https://www.nytimes.com/2020/02/14/opinion/sunday/surprise-medical-billing.html