Monday, December 19, 2011

Legislative battles

As financial pressures impinge the health care system, the various players sometimes seek legislation to protect their interests.  I have heard of two such situations in Massachusetts, and I offer them for your consideration and your comments.

The first involves emergency ambulance service.  Earlier this year, several of the major insurers in the state stopped reimbursing out-of-network ambulance providers, and instead started to send the checks to patients who used those ambulances. Those ambulance companies now have to try to collect from people for payments, and they are losing hundreds of thousands of dollars.

(This only relates to emergency calls, not routine transfers. For routine transfers, ambulance providers already agreed to be reimbursed at agreed-upon rates with insurers and municipalities.)

I can understand why the insurers want to use lower cost ambulance services, but I have trouble imagining a more cruel thing than approaching a patient or a patient's family after an emergency situation (which perhaps led to long-lasting disability or death) to collect funds that the insurers have sent to the family.  It is also inherently inefficient and adds costs if the ambulance companies have to try collect funds from hundreds of individual patients rather than the few insurance companies.

Rep. Jim Cantwell of Marshfield has filed a bill to force insurers to pay EMS providers, and it has a cost-control provision that would give ultimate rate-setting power to local selectmen.  The Fire Chiefs Association, Massachusetts Municipal Association and Massachusetts Hospital Association support this bill.  This sounds like one that, in legislative parlance, "ought to pass."

Then there is a proposal that comes out of the growth of tiered networks, in which insurers charge higher co-pays or otherwise limit coverage to patients who choose higher cost providers.  Well, it turns out that some of those high-cost providers are seeking legislation that would require insurers to include them in the low-cost tier of the network.  The two fields at play are pediatrics and cancer care.  The providers' argument is that they offer essential services not available at other providers, or that they offer similar services but at higher quality.

Given the current absence of current and publicly available quality and outcome data, it is hard to make a persuasive argument for this exemption from the tiering system.  If I were a legislator, I would want to see the numbers and be assured that the stated services are indeed not available from other lower-cost providers or that they are not the same quality. And, yes, if then persuaded that these are essential and of higher quality and are being allocated away from poorer people because of the pricing regime, legislation might be warranted.  But the burden of proof should lie with the providers requesting such an exemption.  Also, since things change over time, the process for such exemptions should rest with a regulatory agency rather than having specific providers' names being written into the law.

I welcome your thoughts on both of these matters and wonder, also, if people are seeing similar issues arise in their states.


nana said...

...and all of this is opaque to the consumer.... the real cost of anything!
We are retired, using pensioner benefits of large Co. for health insurance - trying to be responsible consumers along with "watching our pennies". Our present plan choice has a lifetime limit (cheaper premiums than other choices) but it is impossible to guess how that limit would be reached.
There is no public listing of what Medicare routinely pays (per hospital day, semi-private, for instance) or what the plan would then pay (which accumulates toward that limit). And the provider "charge" of course is entirely different than either.
You champion transparency, and I couldn't agree more. How can a consumer be an educated and responsible partner in trying to hold down health care costs without it?

Barry Carol said...

I think it’s reasonable for insurers to send their checks for out-of-network reimbursement directly to the ambulance companies for the reasons you stated. However, patients and families should not be liable for the full difference between the reimbursement rate and the list price if the ambulance companies accept less as full payment from insurers with whom they have contracts. As I’ve said many times, all insurer contract rates should be ascertainable by both patients and referring doctors.

Regarding the tiering, high cost providers who claim to have unique or differentiated offerings should be able to prove it as you suggested. In theory, it should be possible to include those providers in the preferred tier for those services only but not all of their routine services for which they charge much more for comparable or sometimes even inferior quality. If I were a legislator on the receiving end of the providers’ argument as you stated it, I would tell them to pound salt.

The ABH Blogger said...

This is just shifting costs by insurers to anyone else. The tragedy is that local taxpayers will have to make up the difference, or response times will get longer.