EP307: The Surprise Billing Legislation: Its Impact on Providers, Hospitals, Self-insured Employers, and (Most of All) Patients, With Loren Adler

In this health care podcast, I speak with Loren Adler, who is the associate director of USC-Brookings Schaeffer Initiative for Health Policy and has a particular focus on surprise billing. I wanted to talk to Loren about the surprise billing legislation that is going into effect on 1/1/22.

I will let Loren explain, but, in short, this legislation removes the patient from the mix. If a provider decides to send a surprise bill, the patient will just pay the co-pay or coinsurance they normally would have if the provider had been in network. Then, it’s up to the provider who sent the bill and the insurer to duke it out on the back end.

What this back end duking out consists of is the provider sending their big surprise bill to the insurer. The insurer may reply, with regrets, “Hey, we’re only gonna pay you … whatever … a fraction of the big bill.” The provider may at that point say, “Fine … whatever. I’ll take it.” Or the provider may say, “No can do. I’ll see you in arbitration.”

This arbitration that then happens is a style called baseball arbitration, and Loren gets into the “why” there. Also, a provider cannot trigger an arbitration more than once every 90 days for the same service. So, there’s a wrinkle that will slow the roll of any provider with a plan to clog up the system by arbitrating every claim.

I quiz Loren mercilessly about exactly what the provisions of this legislation are and the winners and the losers. But we also talk a lot about potential ramifications. For example, making surprise bills illegal will potentially accelerate bundled payments, if you think about it, because one of the reasons why bundles have stalled is because various parties who enjoy surprise billing refuse to be a part of the bundle—and then the whole thing just flies off the track.

Also, premiums will go down approximately 1%, they say, for self-insured employer plans. And Loren and I get into the “why” of that—or, more accurately, Loren gets into the “why” of that.

In listening to this recording, I realized we do sort of pick on anesthesiologists a bit here. So, apologies to those anesthesiologists who have been billing fairly this whole time, which is definitely the majority.

You can learn more at brookings.edu.

Loren Adler is associate director of the USC-Brookings Schaeffer Initiative for Health Policy. His research focuses on a range of topics in health care economics and policy, including provider payment and consolidation, insurance markets, Medicare, the Affordable Care Act, prescription drugs, and COVID-19 testing. Previously, he served as research director for the Committee for a Responsible Federal Budget and as a senior economic policy analyst for the Bipartisan Policy Center.

Adler holds a bachelor’s degree in mathematical economics from Wesleyan University and a master’s degree in applied economics from Johns Hopkins University.

03:04 What is this surprise billing legislation?
04:27 What happens when a patient is sent a huge bill from the provider?
06:15 What is “the going rate”?
09:44 “If you weren’t leveraging surprise billing beforehand, this law has no effect on you.”
11:14 Will this legislation push the industry toward one hospital bill?
12:20 What will providers have to do if they don’t like what insurance wants to pay them?
15:26 What is benchmark pricing?
17:37 “Fundamentally … it’s really consumer groups and patient groups plus your self-insured employers … on one side and then provider groups on the other.”
18:19 Is this surprise billing legislation a compromise?
19:48 “Arbitration really isn’t meant to adjudicate every single claim.”
20:11 “The idea is really to kind of push the facility … to negotiate and figure this all out.”
20:50 Are hospitals being impacted by this bill?
24:56 What happens to providers who decide to send surprise bills anyway?
26:09 What are the implications of this legislation for self-insured employers?
28:48 Why have ground ambulances been left out of this surprise billing legislation?
32:23 “At the end of the day, I think this is a net positive for consumers and should be considered a win.”

You can learn more at brookings.edu.