Ending Surprise Billing: What You Need to Know
Main Points
CBO projected the Lower Health Care Costs Act to save $7.69 billion by 2029
The Lower Health Care Costs Act aims to eliminate surprise medical billing by setting rates for out-of-network providers
The Lower Health Care Costs Act would help drop premiums for employment-based insurance by 1%
If you have ever gone to the doctor or emergency room and thought your visit would be covered only to receive a bill in the mail for thousands of dollars, you are not alone. This, all too common, scenario has been felt by millions of Americans and congress is looking to change the rules around out-of-network billing.
However, the impact of the The Lower Health Care Costs Act would impact mental health providers just like it would impact hospitals and larger health care organizations.
CBO projected the Lower Health Care Costs Act to save $7.69 billion by 2029. Lamar Alexander (R-TN) and Patty Murray (D-WA) introduced the legislation, otherwise known as the Lower Health Care Costs Act, in June. The bill aims to eliminate surprise medical billing by setting reimbursement benchmarks for out-of-network care, meaning payers would only have to pay the local median in-network rate for the services.
This means that even if you are out-of-network, you will still be paid the in-network rates and cannot bill your patient for the remainder. This has long been an attractive element of being an out-of-network provider, but that may go away
However, according to the Congressional Budget Office, "“The decline in premiums would occur because the bill would require insurers to reimburse out-of-network providers on the basis of their own median rates for in-network providers (that is, the amount at which half of payment rates are higher and half are lower). Those median rates are generally lower than the current overall average rates,”
CBO estimated that the surprise medical billing provisions would generate the most savings. The office projected the proposals to increase revenues by $24 billion and reduce direct spending by $1.1 billion from 2019 to 2029, for a total decrease in the deficit of almost $24.9 billion during the period.
Therefore, the Lower Health Care Costs Act would save consumers and employers approximately $7.69 billion by 2029. Which is both good and bad news.
The Lower Health Care Costs Act aims to eliminate surprise medical billing by setting rates for out-of-network providers. As discussed above, no longer would providers be allowed to balance bill their patients. Instead, they would have to accept the median in-network rate.
This could mean decreased revenue for private practices that are in and out-of-network with insurance companies. However, this legislation also means that large insurance companies have the ability to set rates and eliminates the economic incentive to negotiate a contract with a provider. This could spell difficulty for providers who are looking to increase rates or become in-network with an insurance provider.
In the coming months, be on the lookout for more updates on this legislation.
The Lower Health Care Costs Act would help drop premiums for employment-based insurance by 1%. According to a recent Gallup poll, healthcare costs were chief among the biggest financial problems in America. The motivation around The Lower Health Care Costs Act is to help employer groups and consumers spend less on insurance premiums and balance bills.
This creates a benefit and a downside to providers. On the one hand, payment will be fairly amicable between insurance plans and that will help patients to actually pay their bills. On the other hand, providers will no longer be able to balance bill which could result in a revenue reduction.
One of the ways to offset this challenge is to market to more private pay clients since the reduction in out-of-network reimbursement may result in less revenue for the practice.
This bill has yet to be passed, but as a provider or biller, you will want to stay tuned for future updates. We will be publishing consistent posts about this legislation and any other relevant updates to health insurance or mental health billing.
