
California's ‘Surprise’ Billing Law Is Protecting Patients and Angering Doctors - avocado4
https://www.nytimes.com/2019/09/26/upshot/california-surprise-medical-billing-law-effects.html
======
riahi
Physician here.

The problem with this law is it takes the medical reimbursement contract
system and then shoots the physicians in the back.

When insurance companies are trying to get people to join their network, they
offer competitive rates. Once they are large enough, they start to exert
downward pressure on physician reimbursement to both existing and new medical
service providers (hospitals and physicians). The only way to counteract their
pricing power is to be willing to walk. Physicians do not like going out of
network; the insurance companies make it incredibly painful, refuse to pay
you, and instead send the check to the patient who is expected to deposit it
and forward it to the patient (if they pay at all).

However, what has happened post-ACA is massive consolidation across the
medical services sector so that large staffing companies would deliberately go
out of network to force better rates strategically. It was no longer the
individual physicians choice whether or not to out of network; rather their
employers'.

However, these laws are a huge gift to the insurance companies. They remove
the physician/hospital's ability to negotiate, and already, we are seeing
insurance carriers refuse to negotiate or offer rates greater than 125% of
Medicare. It also completely eliminates the incentive for insurance carriers
to even bother creating a provider network. This is not the intent of the law
and fundamentally is acting as a wage-cap.

Medicare rates are intentionally set by fiat and often below the cost of goods
sold. 125% of Medicare is an arbitrary "sounds good" number that is not
helping anyone but the insurance companies.

Instead, a better version of the law would be to have payments indexed to the
FAIR health claims database
[[https://www.fairhealth.org](https://www.fairhealth.org)].

Yes, I agree the medical reimbursement system in the US is not ideal; however,
this is tantamount to price fixing which in EVERY thread on compensation for
software engineers, people think what Google/Apple/et Al did to prevent wage
increases and poaching was unethical and unfair to workers. I don't think this
is any different.

~~~
CPLX
> we are seeing insurance carriers refuse to negotiate or offer rates greater
> than 125% of Medicare... fundamentally is acting as a wage-cap.

Sounds good to me.

Sorry I feel your pain but medical costs are out of control and you’re part of
the problem.

Consult with your friends in the industry and figure out how to make billing
reasonable and fair or it’s going to be imposed on you.

~~~
riahi
Right, I'll get on repealing Medicare, EMTALA, and now Balance Billing
legislation before I can legally offer a sane bill. /s

The proposed solution to balance billing is linking the "out of network rate"
to the FAIR health claims database. It keeps the insurers honest and allows
competition at the market rate.

If you gut everyone, hospitals will close and access to care will shrink.

~~~
jcrben
FAIR Health is a claims db. It doesn't have a single price. You think every
doctor should be paid at what percentile - 90th? Doesn't make that much sense
to me. I know that's typical UCR.

Also, you don't have to do everything, but you could start by doing something
other than complaining about doctors who have ruined many people's lives
getting paid less.

I'm working on setting up a Bay Area chapter of
[https://rightcarealliance.org/](https://rightcarealliance.org/) (which is
national) for grassroots healthcare organizing - feel free to hit me up if
you'd like to participate.

~~~
riahi
I'd settle for 75th percentile to force insurance carriers to actually
negotiate and not deliberately keep pruning their provider networks by
offering terrible rates.

~~~
CPLX
You can’t have all the doctors paid at the 75th percentile. That’s like saying
you want everyone’s children to be above average. It doesn’t make mathematical
sense.

At some point someone actually has to set the rate for things. If market
mechanisms aren’t working there needs to be another method.

The point here is that sticking customers with out of control surprise bills
they have no way of foreseeing or avoiding needs to be removed from the list
of options.

~~~
riahi
75th percentile would be for when out of network. It would work to reduce
ridiculous charge-master surprise bills but still provide a redress mechanism
for monopolistic insurance companies playing hardball and cutting
reimbursement 60% in one year (see Anthem BC/BS to pathology in multiple
states).

The argument here is that by destroying the threat of out of network, the
insurance company has literally no incentive to offer rates better than
Medicare. That’s a huge unfair advantage to insurance companies.

~~~
CPLX
> The argument here is that by destroying the threat of out of network, the
> insurance company has literally no incentive to offer rates better than
> Medicare.

Yup. Works for me.

> That’s a huge unfair advantage to insurance companies.

Not so much. Guess what I think the next part of the plan should be?

------
coolspot
I once got a surprise bill from in-network ER because they invited a
specialist for consultation, That specialist sent me a separate bill later.

No one told me upfront it will cost additional $450 to hear from the
specialist that "sometimes kids are having stomach pain for no any reason".

Edit: Additional information - Blue Shield CA HMO, Cedars-Sinai ER , circa
2012. $150 ER co-pay, later $10,000 bill fully paid by insurance + $450
specialist bill not covered by insurance.

~~~
hundreddaysoff
I'm an ER doc. A couple of points:

1\. If we consult a specialist, that usually means we have no idea what's
going on. Sometimes, we do it for "customer service" if a patient really wants
the consult and doesn't seem to trust what we're telling them. If we know
ahead of time that a specialist is going to say that they don't know the cause
of the pain and there's nothing to be done, then in absence of customer
service issues we usually don't consult the specialist. I'm sorry you feel you
got a raw deal on that.

Why we focus on customer service issues is another interesting topic. It
basically comes down to hospital admin, like most other bureaucrats, love
customer feedback surveys (Press-Ganey being the most common) and doctors can
get in trouble or even lose their jobs if their customer service scores drop
low enough.

2\. Unfortunately doctors are completely ignorant about the financial aspects
of this. Likely the specialist didn't even know you would be charged $450 for
his consult. I don't see any good solution to this problem, especially as
we're taught in med school that the patient's health is the most important
thing and financial aspects should be secondary. Not saying I agree or
disagree with this, just that even if a doctor disagrees with this there's no
way for them to change the facts.

~~~
marcus0x62
[https://www.google.com/amp/s/www.nytimes.com/2014/09/21/us/d...](https://www.google.com/amp/s/www.nytimes.com/2014/09/21/us/drive-
by-doctoring-surprise-medical-bills.amp.html) <— this sort of thing is
completely indefensible.

I’m just about the most free-market person you’ll ever meet, but the current
situation in the US is completely untenable. I’m beyond caring about how the
insurance companies tie your hands, how you’re just a doctor focused on
patient-care/“customer service” (that’s a new one) or anything else. Here’s
the bottom line: doctors have the most to lose by not fixing this nonsense.
Insurance execs, hospital administrators, and other various parasites can go
_MBA_ something else. You lot are the ones with specialized and non-
transferable skills. If you all collectively don’t start using your knowledge
of the medical system to propose _real changes_ , then the rest of us about
going to _impose changes on your profession that I promise you will not like._

------
imgabe
It should go further. End the in-network / out-of-network crap. One price per
procedure that is the same for all customers. All providers should accept all
insurances. The system we have is insane.

~~~
jefftk
Currently rates are set via negotiation between providers and insurers.
Roughly, when the provider and insurer can't agree on a price, then the
provider will be out of network for that insurer.

Let's say we remove this, and now we have a doctor who wants to charge $200
and an insurer that wants to pay $100. How should it be resolved?

~~~
imgabe
The insurance company could do their freaking job and crunch the numbers to
figure out what the average price is going to be at the providers their
customers go to and set their premiums accordingly so they can cover what they
expect to pay.

Some of their customers will go to a doctor where a procedure costs $200, some
where it costs $50, some where it costs $100. If the prices were published
patients could actually make a choice based on that information.

~~~
kova12
Insurance should be just that - insurance. It's for catastrophies, not for
sore throat visits. You should only claim health insurance benefits in
exceptional circumstances. You don't use Geico for oil changes. And at the
same time there shouldn't be any place that would charge you without warning
about cost. Analogy: when you go to Firestone to rotate tires, they tell you
upfront what's it gonna cost. You don't go there and they would be like: "we
can not tell you how much it would cost. Every car is different. We might need
to call for specialist from discount tire and he would bill you for
consultation separately". No, that does not happen. They take your car, and
they tell you exactly what they need to do and what will be the cost. Health
care should be the same, competition on price and quality, and none of this
insurance third party nonsense

~~~
jefftk
_> And at the same time there shouldn't be any place that would charge you
without warning about cost_

This isn't unique to healthcare, though it's worse in healthcare than other
places. Say I hire a plumber to put in a toilet, and when they open up the
wall to run their pipes they find major problems that need dealing with. It
wouldn't be code compliant to seal things back up without fixing them. Now
it's going to cost me $10k instead of $1k. (Analogy to complications during
surgery, though it's less time sensitive and I would have the option of
evaluating multiple people to fix the bigger problem.)

------
zbsnsbskd
Just today I called my local hospital asking them how much they were going to
charge me for an ultrasound _Id already preformed_. I’m in the middle of a
qualifying life event and the new insurance retroactively kicks in.

I need to know how much this will cost to decide which plan is better, mine or
my spouses.

The lady didn’t know how much they would charge. This is the only industry
where they don’t know how much they’re going to chi argue me _after the
procedure_

An orange farmer has a price for his oranges months before his orange trees
blossom.

These geniuses can’t figure out the price after they delivered the product.

BS

~~~
g82918
> An orange farmer has a price for his oranges months before his orange trees
> blossom

The futures market, how can we do that for people?

Joke.

~~~
test6554
Seriously though, if you applied cold rationality to healthcare and did not
let human dignity get in the way, we would treat the healthcare industry more
like an auto-repair shop or a veterinarian office.

~~~
kova12
It is only undignified in your mind. There's nothing wrong with being open
about your prices, healthcare or not

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floatingatoll
Here’s the report the NYT drew much of their data from: [https://health-
access.org/wp-content/uploads/2019/09/ha-ab72...](https://health-
access.org/wp-content/uploads/2019/09/ha-ab72report-092619.pdf)

------
subhobroto
This is extremely welcome and much needed change BUT please, everyone reading
this, pay attention to the fact that IF you get healthcare through your
employer (aka "Group" health plan), this regulation MIGHT NOT APPLY to you and
your plan if your employer did not purchase the plan through the ACA
marketplace!

Group health plans are, EXEMPT, from most state regulations. I know it does
not make sense and sounds unbelievable but unfortunately your employer has
more lobbying power than you do!

As a result you, the employed, could still be on the hook for hundreds of
thousands of dollars in surprise medical bills with little recourse (because
you are employed and don't qualify for financial relief) and can have your
wages garnished, which WILL be exercised by the provider if you refuse to pay
the bill.

The providers are OON precisely because they make more money that way and
there's little reason for them to be in-network (they have nothing to gain by
being in network!)

So if you go to the ER today in an ambulance - that's highly likely to be OON
- and have your XRays and/or CT scans read by a radiologist that's also highly
likely to be OON and attended to by specialists that are also highly likely to
be OON, you ARE on the hook for everything unless you're lucky enough to have
a CA state regulated health plan.

Most individual plans purchased through the ACA marketplace are required to be
in compliance with the regulations of the state that the employee is resident
of.

Group health plans are not.

If your employer did not purchase the plan through the ACA marketplace, even
if the plan is ACA compliant, it might not be required to comply with the
regulations of the state that the employee is resident of as long as it's in
compliance with current federal regulation of health benefits.

This can take a lot of employees by surprise, specially employees of
multistate employers where the employer chooses the cheapest plan in
compliance with current federal regulations without necessarily looking into
state level details.

I put in some details here: [https://www.quora.com/In-the-US-the-majority-of-
people-under...](https://www.quora.com/In-the-US-the-majority-of-people-
under-65-years-old-have-health-insurance-through-their-employers-What-is-the-
logic-behind-tying-health-insurance-to-an-employer/answer/Subhobroto-Sinha-1)

I really hope each of you take measures to decouple health insurance from
employment.

How do we, in this day and age, still think, an employer has the right to
solely dictate the standard of care we receive?

Please, if you think it's logical to so severely and tightly couple health
insurance with your employer, let's have a discussion.

~~~
jcrben
Yes, self-insured employer plans are exempt from state law under ERISA. It
sucks but the big multi-state corporate lobby doesn't want to have to deal
with the patchwork of state laws.

I believe the DOL could fix this via regulation, but doubt they will.

S 1895 Lower Healthcare Costs Act would fix this nationally
[https://www.natlawreview.com/article/beyond-surprise-
billing...](https://www.natlawreview.com/article/beyond-surprise-billing-
lower-health-care-costs-act-2019)

~~~
subhobroto
Loved the link, thank you.

I personally believe, the main way to untangle this mess is to make it
indifferent for employers to provide primary care plans and repeal Executive
Order 9250 that allows employers to claim exemptions.

They are free to provide any secondary and supplementary plans

It's past the time employers and health insurance are tightly coupled.

It's holding back progress.

~~~
jcrben
Everyone who knows anything about healthcare policy has been on board with
decoupling for decades, but the big corporate self-insured plans lobby plus
the union lobby plus the loosely-informed general public is too strong.

ACA exchanges set up the infrastructure to decouple in a market-oriented way.

But single-payer would also fix it.

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ChuckMcM
tl;dr version, law works as expected and takes money out of the pockets of
people who were over charging. They are mad and so they are throwing around as
much FUD as they can dig up in an effort to keep this from spreading.

I know, the question of "over charging" is a difficult one to answer. All of
the evidence on people willing to be doctors in California suggests that there
are plenty of suppliers who will work willingly in the new system. That says
to me it is working as intended.

~~~
ASalazarMX
Good. Free market doesn't work when refusing to pay for the product costs you
in health or even life.

~~~
yunesj
> Free market doesn't work when refusing to pay for the product costs you in
> health or even life.

The free market works great to provide food.

~~~
pxeboot
If you are in the US, food is one of the most heavily subsidized items people
typically buy.

------
sabujp
had a child born in a hospital in the bay area before this law and had the
anaesthesiologist send a bill that looked he typed it on his typewriter.
Wasn't even one of the official one's you see from a dr's group. No website,
no email, just the guy's personal #.

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Causality1
Socialized healthcare works. Capitalistic healthcare works. This ungodly mess
we've created in the US that combines the worst aspects of both doesn't work.
When everything is secret and there's no actual competition between providers
but also no regulatory controls to prevent abuse you get the worst possible
results.

~~~
cma
In which countries does capitalistic healthcare work well? Or do you mean just
within your theory it works well and that there are none that actually do it?

~~~
surfmike
Switzerland. Netherlands. In one ranking they are the best systems in Europe.

~~~
shantly
Do any of them not have price controls and a “public option” of some sort? And
sometimes prohibition on for-profit insurance (Switzerland, for example,
IIRC)?

~~~
surfmike
No public option from what I know. Insurance is all private, Swiss require no
profits while Netherlands allows for profit. Government subsidies and
restrictions exist on the plans, similar to Obamacare.

------
davidhyde
While I agree with the sentiment behind the article I think it is disgustingly
and unnecessarily subjective. They have stripped their readers of the basic
human desire to make up our own minds about what they read. Shame on them. The
irony with my comment it that it is not in the least bit objective. Shame on
me.

