Legislators question insurers about surprise billing practices

The House Committee on Energy and Commerce is questioning eight major insurers and physician staffing firms about their role in surprise billing.

The committee sent letters to Envision Healthcare, Team Health, Anthem, Cigna, CVS Health, Health Care Service Corporation, Highmark and UnitedHealth Group, requesting information on billing policies when a patient receives out-of-network care.

Physician staffing firms charge higher rates, lawmakers said to Envision.

Meanwhile, physician staffing companies have argued that some insurance companies have refused to negotiate reasonable rates with providers, the letter said.

WHY THIS MATTERS

Legislators have been focusing on ways to end surprise bills which often result in consumers paying thousands of dollars for out-of-network care.

The Ways and Means Committee cited research from experts at the American Enterprise Institute and the Brookings Institution, showing that surprise bills are frequently associated with services provided by an out-of-network emergency physician or ancillary clinician – such as a radiologist, anesthesiologist, pathologist, hospitalist, or assistant consulting surgeon – at an in-network health facility.

Many of the services that are often associated with surprise bills are also areas where hospitals have increasingly outsourced patient care, committee member said. This occurs because physician staffing companies and hospitals independently negotiate contracts with insurers -- at times, a hospital may have negotiated rates with major health insurers while the physicians associated with the physician staffing company are not part of those networks. 

A study by researchers at Yale found that hospitals that contract with physician staffing companies have higher rates of out-of-network billing. Evidence indicates that physician staffing firms charge significantly higher in-network rates than their counterparts, thereby driving reimbursement upwards as they enter into staffing arrangements with hospitals, the committee said.

Physician staffing companies have argued that some insurance companies have refused to negotiate reasonable reimbursement rates with providers, increasing the likelihood that providers will be out-of-network and balance bill patients. 

In the letters to physician staffing companies, the leaders press the companies for answers as to the policies and practices when a provider is not in-network with a patient's insurance company, including the policies as they relate to sending surprise bills, and the relationship with certain private equity firms.

In the letters to insurers, the leaders press the companies for answers as to the negotiating of reimbursement rates with physician staffing companies and how insurers protect enrollees from receiving unanticipated bills from an out-of-network physician at an in-network facility.

THE LARGER TREND

On Sept. 16, Energy and Commerce Committee Chairman Frank Pallone, Jr. D-NJ, and Ranking Member Greg Walden R-OR, launched a bipartisan investigation into practices of private equity firms surrounding surprise billing.  In letters to KKR & Co. Inc., Blackstone Group, and Welsh, Carson, Anderson, & Stowe, Pallone and Walden request information and documents pertaining to the firms' ownership of private physician staffing and emergency transportation companies, which recent research shows are a leading source of surprise medical billing.

Earlier this month, the House Ways and Means Committee announced its own proposal to end surprise billing, in a rival plan to a Senate and House bill.

ON THE RECORD

"We are concerned about the impact of surprise billing on the nation's rising healthcare costs and the devastating effect that the practice is having on Americans," committee members said by letter. "Therefore, we request your assistance to understand better why surprise billing occurs, the policies and practices that help protect individuals from surprise billing, and the current incentives behind the negotiations between providers and insurers."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com