Opinion: Don't trust a simple fix to surprise medical billing

Joe Schwarz

Though it’s not often obvious, members of Congress enjoy finding areas where both sides can agree. Perhaps those in Washington have found just such an issue: ending “surprise” medical bills.

Rate-setting is not the solution to surprise medical billing, writes Dr. Joe Schwarz.

You or your family may have first-hand experience. You find yourself in need of urgent medical care — maybe something as serious as a heart attack, or as painful as a broken bone — and head straight to an emergency room. The hospital and the doctors treat you. You have health insurance that is supposed to pay for all of it, but several weeks later, as you’re recovering, you get stuck with unexpected charges when your insurance company refuses to pay.

As a former member of Congress, I understand what it’s like to hear from constituents about problems with health insurance, even for people who have done all the right things. As a physician, I know what it’s like to discuss treatments with a patient who wonders not only if the treatment will be effective, but whether he or she can afford it.

No one should have to shoulder these uncertainties, especially not when they are already insured. Whether you pay premiums directly or through an employer, insurance is expensive — and it's supposed to be there for you when you need it, just like the nurses and doctors who treated you when you arrived at that emergency room.

Broad consensus is building in Congress that something must be done to stop this. But as I watch my former colleagues work through this issue, one proposed answer bothers me: The idea of government benchmarking reimbursement rates.

Here is how this non-solution would work: Insurance companies, who negotiate reimbursement rates with their in-network doctors and health care providers, would reimburse non-network providers for services at a set rate. That set rate would be based on those negotiated, in-network rates.

Much like the problem it purports to fix, this rate-setting “solution” carries surprising consequences we won’t fully appreciate until later, after we thought the problem had been addressed.

With a set benchmark rate for out-of-network providers, insurance companies will have an extraordinary negotiating position within their networks. What will stop them from canceling a provider’s contract and forcing renegotiation? They will be able to use median out-of-network rates as a cudgel to beat down in-network rates — which will, in turn, drive down those median out-of-network rates further.

Eventually, doctors and hospitals will face the unattractive choice between unsustainable out-of-network payments versus unsustainable in-network payments. This presents real and devastating repercussions for the business side — and the reality is that health care providers do have expenses to cover. This is the first step toward driving many doctors out of practice.

That pain would be felt most sharply in rural areas where hospitals struggle on shaky financial footing; and it is also where people are likely to depend on hospitals for a range of health care services that are not available anywhere else. Driving institutions like these to the brink of financial ruin means surgically removing a key element of our health care delivery without a replacement.

Congress has other and better solutions to consider, including plans that foster negotiations between insurers and providers to arrive at a mutually agreeable reimbursement rate. Now that the calendar has flipped to October and lawmakers are back in Washington, D.C., they must not be fooled by the illusion of a simple fix.

Surprise medical bills must end, but they must end in a way that protects our ability to access medical care, especially when we need it most. Rate-setting is not the solution we need. Much like with surprise bills, it will have unexpected consequences, and shift the pain to patients.

Dr. Joe Schwarz represented Michigan in the United States House of Representatives and also served in the Michigan Senate.