On surprise medical bills: Lawmakers shouldn’t reward bad insurer behavior

By Brian Bergson | 02/17/2020 for MINNPOST


The debate in Congress over surprise medical bills presents a real opportunity for lawmakers to provide a solution to a problem that can create huge financial burdens for Minnesotans. On average, 18 percent of emergency-room visits result in at least one out-of-network charge. These bills disrupt patient recovery and add financial stress to a health scare.


Americans deserve better, but Congress appears to be wavering on passing a solution that will protect patients. Instead, we are seeing a push to use the debate over surprise medical bills as an opportunity to reward insurance companies that have continually put their profits before their beneficiaries.


Two proposals on the table

There are two proposals on the table in this debate: rate-setting, a scheme favored by insurers because it gives them complete leverage over pricing and contract negotiations, and baseball-style arbitration, a system that balances the interests of patients, doctors, and insurers. Rate-setting would lead to physician shortages and hospital closures by allowing insurers to determine how much medical services are worth. Meanwhile, baseball-style arbitration has been proven to reduce out-of-network bills and reduce costs. The New York Department of Financial Services found that its baseball-style arbitration law has protected patients from surprise medical bills and saved consumers more than $400 million in costs related to emergency services.


Unfortunately, many in Congress support rate-setting, also known as benchmarking. “Benchmarking” physician reimbursement to an unverifiable rate set by insurance companies, such as “median in-network” would give insurance companies even more control over our health care. Insurance companies would be allowed to cancel their longstanding contracts with doctors in communities across the country, which would force doctors and hospitals to accept lower reimbursements at dangerously low rates.


When reimbursement rates do not cover the cost of care, hospitals take on debt, reduce services offered, and, ultimately, are forced to close. Already, 22 hospitals around the country have closed this year and 19 rural hospitals in Minnesota are at high risk of closing due to financial distress. If insurance companies are given free rein, they will deplete the health system of the resources it needs to provide care in vulnerable communities.


If history is any guide, it is safe to assume that insurance companies will put their profits first and our health care at risk.


$1 million fine against Minnesota insurer

As reported by the Star Tribune, state regulators in Pennsylvania issued a $1 million fine against Minnetonka’s own UnitedHealthcare for its failure to pay medical claims. According to regulators, United denied 83,615 medical claims in 2015, several of which were related to surprise medical bills. The report found numerous instances where United failed to pay the reasonable necessary costs it is legally required to, leaving patients with the bill.


Meanwhile, United is having one of its most profitable years in history, rewarding its  shareholders and CEOs with stock buybacks. This year alone, United has purchased $5 billion of its own shares, an amount that is 50 times the single fine the company received in this case.


Insurance companies cannot be trusted to do the right thing when given the option to dramatically tilt the scales in their favor. If Congress passes rate-setting legislation, there can be no doubt the insurance industry will use its unfair upper hand to lower physician reimbursements, leading to the closures of fragile hospitals that overwhelmingly serve the poor and elderly.


Minnesota’s Democratic Sens. Amy Klobuchar and Tina Smith, as well as Republican Rep.  Jim Hagedorn, have already signed on to proposals that avoid rate-setting and use baseball-style arbitration to end surprise medical bills. It is time for the rest of our delegation, and the rest of Congress to join them. We cannot allow insurance companies that already refuse to pay their fair share to have more control over the ability of patients to access care when they need it and the ability of doctors and providers to deliver that care.


Brian Bergson is a former Minnesota state representative, communications professional and a military veteran.