AAOS October 3, 2017
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Legislation Introduced to Address EHRs, HIT

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State Corner – ICYMI: AAOS, State Orthopaedic Societies Successful in Combating Insurer Campaign to Set Payment Rates to Medicare

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State Corner – ICYMI: AAOS, State Orthopaedic Societies Successful in Combating Insurer Campaign to Set Payment Rates to Medicare

State CornerIn 2017, AAOS continued to work through legislative proposals addressing out-of-network bills or “surprise” bills. In fact, more than half of all states had at least one proposal this year, but only a handful ended up being enacted. Of those enacted, four state laws (AZ, IN, NH and LA) were largely disclosure and/or study committee bills. Texas expanded their current mediation process, with the support of the Texas Orthopaedic Association, while Maine was the only state that passed broader bans on out-of-network billing. A problematic bill passed both Houses in Nevada, but was ultimately vetoed by Governor Brian Sandoval citing, in part, opposition from the Nevada Orthopaedic Society. Click here to read Governor Sandoval’s veto letter mentioning the Nevada Orthopaedic Society. 

Balance billing happens when a patient’s health insurance company pays an out-of-network physician or other health care provider less than the amount the physician charges for the care.  Because the physician and the health plan have not agreed upon payment through a contract, the physician bills the patient for the remainder of the costs.  A commonly used term – “surprise billing” – references a type of balance billing where a patient receives care at an in-network facility, but the care is provided by an out-of-network physician or other health care provider, without the patient knowing the provider is out-of-network.  This happens because physicians and hospitals contract with health insurance companies separately, and with dozens of health insurance products in a market, it is rare that a physician is asked to participate with all the same products as each hospital where the physician provides care.  So-called “surprise billing” can also refer to emergency care provided by an out-of-network provider.

Many state orthopaedic societies attempted to address the issue proactively, offering legislators proposals that frequently included a ban on “surprise” billing in exchange for fair payment from insurers for the out-of-network care. The fair payment has been identified most commonly as a percentage of charge data from an independent database (i.e. FAIR Health). A coalition of specialty societies, led by AAOS, American College of Emergency Physicians and American Society of Anesthesiologists have engaged with the other hospital-based specialties to draft principles that support such a legislative proposal. A version of these joint principles was adopted as AMA policy in June. To read the joint principles, click here.

Unfortunately, trepidation by lawmakers to adopt a “FAIR Health” standard, and a continued interest in a Medicare-based standard, shows medicine has much to do in the way of education and messaging before the next legislative session. 

To best address the root causes of the problem and protect patients from these unanticipated out-of-pocket costs, state orthopaedic societies have advocated for policies that ensure that all health insurance companies provide adequate access to in-network physicians, including physicians that practice in hospitals, and that insurance companies provide coverage as promised when a patient goes out-of-network.

To read a repository of work that state orthopaedic societies have created in the last two years, click here.