How a New York Law Tackled Surprise Medical Billing
A medical billing law passed in New York in 2015 has been a surprising success, according to the Department of Financial Services. Consumers over $400 million during a four-year period (2015 to 2018) thanks to the law, which provides them with an independent resolution process upon receipt of out-of-network and surprise medical bills. During that same period, the number of requested dispute resolutions increased from 149 when the law went into effect to 1,148 just three years later.
Eliminating Consumer “Sticker Shock”
Surprise medical bills are a growing problem for patients across the country. Statistics tell the story; a Kaiser Family Foundation survey in 2018 found that:
- 40 percent of insured adults aged 18-65 received a surprise medical bill within the preceding 12 months
- 67 percent of respondents were concerned about surprise medical bills; more people worried about these than high insurance premiums, high deductibles, and rising drug costs
A recent JAMA Internal Medicine study reported that out-of-network billing is more common and the bills more costly than they were a decade earlier.
“Surprise medical bills have been a huge burden that can stress consumers’ finances, literally causing some people to go broke,” said Linda A. Lacewell, Department of Financial Services Superintendent. “Our review shows that the law is making a major difference in helping New Yorkers receive the healthcare they deserve without the unnecessary shock and onerous cost of surprise bills and the stress of having to enter disputes themselves.”
The New York law removed patients from the negotiation process and resulted in a one-third reduction in out-of-network billing and a nine percent drop in in-network emergency physician payments. Patients aren’t the only ones to benefit; doctors are using data from the report to push for an arbitration process where payers and providers come up with an amount they feel is a fair price for an out-of-network emergency service and a third-party arbitrator will determine which offer is most reasonable.
The next goal is to develop a national independent dispute resolution process in order to end surprise medical bills, though there is disagreement on several fronts regarding implementation. Some are afraid new legislation might cost the federal government billings and potentially lead to higher costs by increasing provider payments. Alternate legislation pushing for benchmark reimbursement rates for out-of-network care has also been proposed, but has met strong opposition from physicians and hospitals.
For now, payers and providers disagree on which approach is best for addressing the problem of surprise billing. The federal government will look closely at both sides before coming up with a national policy.