Surprise Medical Bills

Let’s Find the Cure for Surprise Physician Services Stealing

March 9, 2020

[Author’s note: Today’s post deviates from my usual method of addressing a topic in short form and then later, when it gains traction, building it into a full length article for publication. Instead, the post is an initial draft of an essay on surprise medical billing, a thorny subject which, I believe, has an immoral undertone, but not the immorality popularly seen. I welcome your comments and suggestions.]

There is a crisis. But it’s not the one you’ve heard about.

It’s time to fix that. It’s time to change the conversation.

But to do that, you have to change the frame.

From the framers of the constitution, to the framing around that velvet Elvis, to what’s in and, therefore, what’s out of a Robert Frank photograph, framing controls the point of view. Framing, too, controls a conversation and, therefore, the argument, and, therefore, the outcome.

Tucked away in the wallet of Merry Mittleklass, our avatar patient, is her Blue United Free From Worry Plan insurance card. She’s been covered by Blue United for years, but had never (as she says, “Bless my stars!”) seen the inside of a hospital.

That is, until last Tuesday at 7:44 a.m., when she had surgery at Community Memorial St. Mark’s Hospital to repair a hernia.

Community Memorial St. Mark’s and the surgeon were in-network with Blue United. But the anesthesiology group wasn’t. And, so the story goes, Merry was “surprised” when she found out that Blue United had paid the group $200 and that she was “stuck” with a bill for the remaining balance, $1,375.

The popular press, the press of payors, and the populism of politicians all frame this as the out-of-network hospital-based group’s problem. Or, they allege with glee, a problem caused by the out-of-network physicians’ predatory practices.

The name for this frame? “Surprise medical billing”. The resulting cure? Force the group to take, as payment in full, an amount to which they never agreed, the so-called “average.”

But let’s take a closer look.

Earlier this year, the press was abuzz with coverage of the fact that UnitedHealth was not renewing its contracts with Mednax for services in 4 states because those agreements pay Mednax more than UnitedHealth now wants to pay. Come the termination dates, Mednax’s anesthesiologists and neonatologists will be out-of-network. Out-of-network wasn’t Mednax’s strategy. It’s just a fact. As a result, under the common frame, patients will be “surprised” . . . and it will be spun as Mednax’s fault; every one of their bills will be deemed a “surprise medical bill”.

Let’s take a look from another angle. Last week, a radiology group determined that the 80% cut proposed by payor X was unacceptable. (They actually used a different term.) They will not sign the offered contract nor is there any legal or moral reason for them to do so. They will soon be out-of-network, which wasn’t their strategy. It’s just a fact. As a result, under the common frame, patients will be “surprised” . . . and, once again, it will be spun as the group’s fault.

One more view: Some group of anesthesiologists, let’s call them the “Live Free or Die Group” doesn’t want to contract with any payor. They are out-of-network by choice. And, that makes them an outlier. Once again, under the common frame, patients will be “surprised.”

The “cure” proposed, even legislated, by those constructing the frame of “surprise medical billing” is to force non-contracted physicians, whether those physicians are out-of-network by reason of choice or by coercion, to work for a rate to which they never agreed, the so-called “average” rate.

Why? What’s the philosophy, the morality, behind that frame, the frame of “surprise medical billing”? Why should anyone be forced to work for a rate to which they didn’t agree?

Almost at the same time that the UnitedHealth/Mednax story broke, the news was awash with a new round of what’s become a familiar story, one that “activists,” even musicians, rail against: people being forced to work for wages to which they didn’t agree. Only those folks are, it is said, constructing iPhones and computer parts.

In that context, stealing one’s labor is seen for what it is, coercion and theft.

Yet, in a leap over the moral chasm, I’d be surprised if we could find one of those activists who sees forcing physicians to work for rates to which they didn’t agree as the equivalent.

In the context of any of our avatar hospital-based medical groups, Mednax which has been tossed out of network, the radiology group which refused to take an 80% cut, or the anesthesia group which doesn’t want to contract with any payor, is there someone, some entity, which has in fact contracted to provide coverage to the patient, to our avatar Merry Mittleklass?

You bet there is. For one can’t be out-of-network unless there is a network. And that network is a result of Blue United’s contract to provide coverage to Merry Mittleklass.

If Blue United were a general contractor instead of an insurer or health plan, and they contracted to build Merry Mittleklass’s house for $500,000, but then couldn’t get tradespeople to do the actual work for less than $600,000, it would be Blue United’s problem.

If general contractor Blue United can’t force plumbers and electricians to work for less than they’ll agree to accept, why would anyone think that payor Blue United can force pathologists and radiologists to work for less than what they’ll agree to accept? After all, it would be surprise physician services stealing.

Unless the frame is changed as I suggest, that being forced to work for a rate that wasn’t agreed to is theft, hospital-based physicians will never be able to succeed in battling against working for “average” in a universe in which payors throw higher paid groups out-of-network to reduce the resulting average. That’s a spiral to the bottom, which in turn, will sooner or later cause a bigger crisis, the unavailability of, or reduction in quality of, hospital-based services and hospital-based providers.

Over 160 years ago, Frederic Bastiat, the French politico-economic thinker, warned of the danger of quick fixes like the one we’re seeing for “surprise billing.” In his essay, That Which is Seen, and That Which is Not Seen, he wrote that:

“ . . . a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause — it is seen. The others unfold in succession — they are not seen . . . . Between a good and a bad [politician] this constitutes the whole difference — the one takes account of the visible effect; the other takes account both of the effects which are seen and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favorable, the ultimate consequences are fatal . . . .”

For hospital executives and office-based physicians who think that the legislated cure to surprise medical billing is simply a hospital-based physician problem, think again: I recently heard someone refer to his larger than expected share of in-network care as “surprise medical billing.” Yes, it’s a slippery slope.

Re-frame the issue for what it really is before it is too late: Surprise physician services stealing.

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