By STEPHANIE STUMBO

Kentucky Association of Health Plans

Too many Kentuckians are getting caught in vicious billing cycles for medical visits. When patients inadvertently visit a physician that is out of their insurance network, they can get stuck with really high and even excessive bills. Too often, provider groups assert that this is an issue caused by the insurance industry due to excessively low provider reimbursement rates. However; studies show that prices billed are sometimes as high as 60 times what the federal government pays for the same services. This is price gouging, pure and simple, and must be stopped.

These unexpected, unsettling expenses are known as surprise billings. These billings can occur when patients receive out-of-network care from an in-network hospital, or when they receive emergency services at an out-of-network emergency department. Surprise billing is a problem in the health-care system because it leads to higher health-care costs solely because services were provided on an out-of-network basis and often without the patient’s knowledge and consent.

Nearly one in three patients who have trouble paying medical bills attribute the problem to surprise billing, according to a 2016 report. These patients — often through no fault of their own — have experienced a failing in the health-care system that allows out-of-network providers to charge an unlimited amount.

Surprise billing is most rampant among radiology, anesthesia, pathology, laboratory and emergency providers. These providers, along with ambulance providers, tend to remain out-of-network, which causes higher rates.

In order to fully address the challenge of surprise billing by medical providers, comprehensive reform is needed. The single most important element that policymakers must include in surprise billing reform is creating a standardized rate that does not incentivize providers to remain out-of-network or to leave existing health-care networks. Staying out of an insurer’s network should not be a business strategy, but it is.

Any reimbursement system that pays providers more than a median in-network rate in the local market will continue to incentivize providers to be out-of-network and will keep increasing the cost of care across the health system.

Setting standardized, “benchmark” rates that are indexed to Medicare or the median contracted rate would encourage health-care providers to remain in-network and would eliminate surprise bills for patients. Benchmark rates would also allow for health spending to be lowered, providers to receive reasonable rates, and patients to have a better experience with the health-care system.

Hospitals have a role in combating surprise billing. First, hospitals can encourage or require all providers practicing medicine within their hospital to establish a contract with all insurance companies with which the hospital contracts.

Additionally, hospitals can ensure better transparency by notifying patients when they will receive care from out-of-network providers. This communication should occur before care is provided, if possible, and hospitals should minimize these occurrences. Alternative in-network providers should be offered and communication with the patient should be done in a way that does not discourage them from receiving care.

Congress is currently considering what we believe is balanced legislation which would address many of these issues. We believe that as long as they adhere to many of the principles outlined here, these proposals will provide needed reforms to Kentucky patients to protect them from predatory billing practices. We hope our leaders in Kentucky feel the same way.