15 January 2009

Balance Billing -- the next step

Following up on my post the other day about California's ban on balance billing, it's clear to me that Emergency Medicine as a specialty has to come up with a plan to address this issue, or it's just going to kill us, state by state. Because the insurers have seen this go down now in several states, and with California now setting the standard, it's certain that they are going to try to replicate this strategy elsewhere.

Fighting specific balance billing legislation and regulations as they crop up in your own state is a reasonable approach, but it seems to me like a stop-gap, and ultimately a losing strategy. The Supreme Court of California rendered an judgment that may have been in accordance with California law, but more importantly, followed the judgment that has been rendered by the court of public opinion. The public, the media, and lawmakers are not going to allow disputes which are perceived as putting patients in the middle, or punishing patients for disputes to which they are a third party, especially when it relates to emergency care. If lawmakers are therefore obligated to choose who the winners and losers will be in the dispute between doctors and insurance companies, they will reliably prefer the industry which lavishes millions of dollars in campaign contributions. (That ain't us.)

Forgive me for engaging in RealPolitik here. I think it's not so bad that patients might have to pay for services rendered in some cases. I think that we should be able to negotiate our prices. I think that the insurers are the bad guys here, trying to drive prices down to pad their profit margins. But I also think that if we keep making these arguments, we are going to lose. So principles and ideals must bow to necessity in formulating a strategy.

And a new strategy is going to be necessary. By which I mean that we should not concede the point outright, but instead get out there ahead of it and have an argument to make to legislators which takes the moral high ground, protects patients, but also protects the integrity of the social safety net that the Emergency Departments represent. Remember that legislators and the public in general tend to view ER docs favorably -- we are the heroes and the good guys. If we come out in advance with a position that vulnerable patients need to be protected, we will have a much more receptive audience than if our stance is "screw patients, we don't care who pays but someone has to."

A successful strategy, I think, would be based on the following principles:
1. Patients' interests should never be put at risk over financial disputes. The insurers need to live up to their obligation to cover their beneficiaries' care. The party line should be that out-of-pocket payment from patients is an unacceptable solution -- all payment should be from the insurers, and we are acting as the patients' advocates. Is this cheap demagoguery? Maybe -- I don't know. But it's salable, and potentially more effective than what we've been arguing. It is also consistent, since we have been lobbying for years for insurance companies to pay us directly rather than to bill the patient and have the insurers reimburse them.
2. Define, by region, what FAIR PAYMENT is. Given the way it has been manipulated by its parent, UnitedHealth, I would not use the discredited Ingenix database for this purpose. However, other mechanisms exist to capture the data regarding "Usual, Customary, and Reasonable" (UCR) charges for ER codes in a given region, and that should be the starting point for negotiations.
3. The emergency safety net is at risk, and our rhetorical focus must be on preserving it. The point to emphasize with legislators is that our goal is to obtain a revenue-neutral solution. Fair Payment should not result in crippling financial losses to already-stressed emergency providers (I didn't see a lot of A's on the Emergency Care report cards). Emergency care providers are not in search of a windfall, but a solution which takes patients out of the middle while preserving the status quo in terms of overall costs.
4. Link an end to balance billing with a legislative guarantee that insurers must provide fair payment for care provided under EMTALA's obligation, or, alternatively, some mechanism to arbitrate the fair value of emergency care, taking into account the massive infrastructure cost of uncompensated care provided to the indigent.
5. Increase the collective bargaining rights of physicians. The insurers have the advantage of knowing what every provider in the state is paid, whereas physicians are prohibited by anti-trust legislation from even discussing their fees with one another. This asymmetry of information creates an unlevel playing field when physicians try to negotiate with insurers for fair payment. If anti-trust laws cannot be made to contain a safe harbor for physicians to share information or collectively bargain, then trusted independent bodies (such as the state office of budget management) could perform that function in a blinded fashion.

The reality is that when the insurance industry brings the balance billing issue to the legislature in your state, they are going to drop a bill, pre-written, on the desk of a friendly representative that is going to be terribly adverse to the interests of the physicians. If EM, as a specialty, is going to have a chance in hell to fight it, we need to offer a palatable alternative. Either this alternative would be enacted and improve the situation, or create gridlock and preserve the status quo. When patients are being hurt, digging our heels in and obstructing will win us nothing.


  1. You are awesome. Thank you for letting me know that my insurance company owes me money, lots of it (hopefully!).

    They are non-par with most specialists, and with every reputable diagnostic imaging company. I've been paying the difference out of pocket for one specialist and several scans. Even worse we have a grad student plan-- we've reached our cap so many times, often in July, but don't find out for six months or so when the billing dispute is ended or the carrier has finally responded to the claim.

  2. yeah or we can just stop seeing patients. 2 years out of residency and i'm already looking for an exit strategy. the pros just don't outweigh the cons.

  3. Excellent post! Working for ED docs (many in CA) in the billing and coding trenches I truly appreciate your post. The time to take a "united we stand" approach is now. We worked hard here(in CA) to stop the legislation, sadly the result did not match the effort. One point of your post needs to be stressed-we need to bring the public opinion over to the truthful side. The grossly profitable Insurers have claimed a "victory" with public opinion following the pretext this legislation takes patients out of the middle of payment disputes. While in fact we remain with inadequate physician networks for patients,leading to inadequate access to healthcare potentially jeopardizing their health and ultimately driving up healthcare costs. Your mentioned moral high ground is honest and that message needs to get out!

  4. Already has! Through the power of HOPE alone! You must have not been paying attention.

  5. Good post. This is the first reasonable plan I've seen to the balance billing issue that doesn't screw patients or physicians. And it sounds like you've spent some time around the statehouse...

  6. I happened across your blog tonight while researching current status on CA's balance billing law.

    Interesting post on your part regarding this highly charged (no pun intended) subject.

    Having spent many years in the health insurance industry, I currently work for a major insurer in CA, and prior to that worked for an HMO in WA (wanna guess which one?).

    I have an honest question and comment-

    Does your EM group contract with ANY insurance carriers, and if not, why?

    I ask, and assume that there is a high probability of the answer being "no", as EM, and even more often, anesthesiology groups rarely, if ever, contract with insurance companies. One could assume it is for the simple reason of being able to collect every last dime billed vs. having any legally binding contractual write offs. It is difficult to deny this as the exact reason since there is a high percentage of EM's, anesthesiologists, paths, rads, etc., that do not contract if they are hospital based, when other specialties (ob/gyn, ortho, cards, etc) routinely contract, pretty much across the board.

    As far as being in a "favorable light" regarding this subject, jumping out in front of the maelstrom, might be to reach out and start contracting. Remember, contracts expire eventually, and it would get you out of negotiating every single claim when you aren't contracted.

    At least I would no longer have to explain to enrollees why there is zero interest in contracting by these certain specialty groups (that part about collecting every last dime).

    Sign me: Insurance Agent in CA, currently working for one of those profiteering bad insurance companies :) Actually, I work for a not-for-profit insurance carrier if the truth is known

  7. We are not in CA, so the reimbursement environment can be quite different, and I don't know CA. We are contracted with almost every major insurer in our state (granted there are only half a dozen major commercial insurance networks, far less than in CA, I suspect. We negotiate rates and if there's a carrier that won't play ball, we drop them. We offer a modest discount for prompt hassle-free payment. It's the ideal solution, as long as the insurers are willing to offer reasonable rates.

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