As the Trump administration looks for ways to reduce the burden on Americans when they receive a surprise medical bill, it could borrow ideas from New York, which approved legislation in 2014 that has safeguarded residents in the state from being hit with out-of-network charges.
Since going into effect in 2015, the law has largely worked the way it was designed, according to a case study from Georgetown University Health Policy Institute Center of Health Insurance Reforms that evaluated the impact of the law just a few years later.
Surprise billing has recently come into the spotlight after a number of sky-high medical bills from insured Americans made headlines over the last year, highlighting the financial burden of receiving out-of-network services without a patient’s knowledge or consent.
New York is just one of nine states with laws that gives consumers protections for both emergency and in-network hospital services, applies protections across all types of state-regulated insurance, holds consumers harmless from extra provider charges and adopts an adequate payment standard or establishes a dispute resolution process, according to the report.
Researchers with Georgetown evaluated the implementation and operation of the law five years after it was enacted, through interviews with state regulators, consumer advocates, insurance company representatives, physician and hospitals representatives and expert observers that took place in early 2019.
Law in effect
Across the board, most stakeholders agreed the law is “working as intended to protect consumers from a significant source of financial hardship," according to the report. A recent analysis of claims data found a 34% drop in out-of-network billing in New York since the law came into effect. Consumers saw more success with surprise billing, with 57% of calls to the Community Service Society’s consumer help line resolved thanks to the protections in the law.
“[The law] is working great...it works really well for consumers,” one consumer advocate said in the report.
Regulators and insurance company representatives agreed consumer complaints saw a “dramatic” decline about balance billing.
But there are still some gaps in consumer protections. Protections are not extended to self-funded health plans, which are not regulated by the state. Second, network misinformation is the biggest problem for consumers receiving surprise bills, the report stated. Patients can simply be misinformed by office staff at their doctor’s office, representing the doctor is in network when they actually are out of network. Patients also can get surprise bills if they rely on inaccurate, out-of-date plan provider directories to find in-network providers. About 35% of calls about surprise bills to the consumer help line are complaints about inaccurate network information.
Furthermore, not everyone agreed on the success of the independent dispute resolution process, with IDR decisions being split roughly evenly between providers and payers––as of October 2018, 618 disputes were decided in favor of the health plan and 561 in favor of the provider, according to the report. Fortunately, health plans and providers are making more of an effort to resolve disputes before filing with IDR.
Still, the success of the law should not be understated, as the state was determined to create consumer protections, beginning with a report in 2012 that put the legislative process in motion.
“That report was a really important first step,’” A stakeholder said in the report. “’We have this law because [the regulator] gives a damn...and embraced the idea of putting the consumer first.’”
From there, the New York Department of Financial Services (DFS) drafted a bill and took stakeholder feedback to make adjustments, packing much of the negotiations into the front-end stage of the process. Bringing all relevant parties into the bill process was key to the success of the law’s passage, according to Georgetown researchers.
When the law was being implemented, the state departments also worked with stakeholders, including addressing health plans that were originally concerned with reimbursement changes that could potentially disincentivize affected physicians from joining networks and create incentives for physicians to increase billed charges.
Tapping providers and engaging all stakeholders in the implementation also enabled the state to leverage the existing infrastructure and resources.
Five years after the law went into effect, New York consumers are afforded more protections that could be an example at the federal level as policy discussion are underway for a national solution.