State helps keep surprise medical bills in check

Last year, Michigan’s lawmakers and Gov. Gretchen Whitmer joined together to end surprise medical billing, the unpleasant invoices many patients were receiving after a procedure when one or more of the physicians involved was not covered by the patient’s insurance.

Congress in the waning days of December also addressed the issue, including a ban on surprise medical billing in the federal pandemic legislation. But the federal solution is far less valuable to consumers than the Michigan approach.

Michigan Association of Health Plans was an early advocate of a strong policy to stop surprise billing. We represent most of the major health insurers in the state and many of the state’s Medicaid managed care insurers. Our top priority was getting patients out of the middle of these payment fights.

Health plans often receive complaints from enrollees regarding surprise bills from providers who had strategically decided they could make more money by refusing to negotiate with insurers over bills. Instead, they billed individuals after an operation or medical appointment, and then used bill collectors to pressure patients into paying bills far higher than other providers were charging for the same procedures.

Our solution was the one ultimately adopted in Michigan. In the vast majority of cases, a provider who is not covered will be submitting his or her bills to the insurer, not the patient. Providers will submit payment based on a fee schedule if an agreement on payment cannot be reached.

Congress went another direction. The federal law, which will not be used for most Michigan procedures, calls for the provider and the insurer to go into arbitration.

Arbitrators will consider a variety of matters and then render a financial decision.

As the Washington Post noted in an article, the federal solution was supported by providers and private equity firms, some of which have purchased physicians’ practices, removed them from insurance networks, and then started charging individuals sky-high prices.

MAHP believes the arbitration solution will add costs and uncertainty to what should be a transparent transaction that should be handled with minimal bureaucracy and a high level of certainty. That certainty will protect insurance rates from increases that make it harder for companies and individuals to afford to purchase insurance coverage that is vital in today’s health care system.

We’ll continue to address surprise medical billing costs beyond providers including transport to medical care such ambulances and special air flights. Those issues will require additional work at the state and federal level and MAHP is committed to working on behalf of patients and companies to hold down costs.

– Dominick Pallone, executive director of the Michigan Association of Health Plans

This letter to the editor originally appeared in Crain’s Detroit Business, read more here.