Many employers are concerned about the burden that surprise medical bills — those costly, unexpected bills patients get after they receive care from an out-of-network provider they reasonably assumed was in their network — create for their employees. Surprise: out-of-of network charges are causing many Ohioans financial hardship.
Ohio lawmakers appear to be similarly concerned, and both the Senate and the House have legislation pending to address the issue. Both Senate Bill 198 and House Bill 388 would hold patients harmless by banning balance billing by providers for out-of-network services. Unfortunately, that’s where the similarities between the two approaches ends.
On Wednesday, the Ohio Chamber provided testimony before the House Finance Committee in support of the House version of the legislation. While not perfect, HB 388 is a workable approach to solving the problem of surprise billing.
It does so by establishing a reasonable benchmark in law that is based on rates already established by the private market for situations when the insurer and provider cannot come to an agreement on an appropriate payment amount. Basing the amount the insurer must reimburse providers, and that a provider must accept as payment-in-full, on a market rate is key. Alternatives such as basing it on providers’ billed charges would only drive up health care costs. A market-based approach, on the other hand, ensures fair payment to providers without discouraging network participation.
HB 388 also doesn’t rely on an arbitration mechanism to solve the problem. States like New York that have enacted laws punting payment disputes to an arbitrator to determine the reimbursement rate have experienced significant cost escalation. Beyond higher reimbursement amounts, arbitration also creates new administrative costs with money being wasted on arbitration preparation expenses and, ultimately, an arbitrator’s fees.
Unlike HB 388, SB 198 would create a New York-like arbitration process as the primary means of addressing the problem. The Ohio Chamber will likely testify in opposition to SB 198. Employers want their employees protected from surprise medical bills. As the legislature tackles this issue, the Ohio Chamber is committed to working with the legislature to find a solution that not only protects patients by ending surprise billing, but also ensures a reasonable reimbursement rate for providers without raising already soaring health insurance costs. HB 388 is the better approach to achieving this balance.