Thread: "Surprise billing" is something most people have heard about, where a patient goes to a hospital or physician for whatever reason and thinks she is in network with her commercial insurance, and then receives a bill for a physician or a service that is out of network.
2/ The question is, WHY is that provider or service out-of-network? Increasingly, the answer is that insurance companies refuse to negotiate to reasonable rates and in good faith with hospitals and physicians, and reduce or narrow the scope of covered services in policies.
3/ From the perspective of the insurance provider, this makes perfect strategic sense. A $200B+ revenue commercial insurer will never miss one physician or hospital but that insurer may represent 30% or patients or more for any one particular provider.
4/ Therefore, take-it-or-leave-it negotiations and contract brinksmanship are increasingly common tools used by insurers to cut payments. My hospital in fact experienced a contract holdout last year that resulted in a 3 month lapse. In the end there was no choice but to cave.
5/ Of course, physicians and hospitals WANT to be in network - it is very important for revenue cycle management to receive a known and negotiated rate for services, and they want patients to have their services covered by insurers without the unpleasantness of balance billing.
6/ Insurers on the other hand, want a network that is as limited as their customers will tolerate, because obviously limiting access to network covered services reduces utilization, and they want a network of physicians and hospitals terrorized into the lowest possible rates.
7/ So really, while there have certainly been malicious acts of surprise billing by unscrupulous physicians and hospitals (most famously so-called drive by surgeries) it is in general more accurate to call the problem addressed by proposed legislation "surprise insurance gaps".
8/ This is obviously a very brief explanation of an issue with many wrinkles and presupposes a general understanding of the relationship between patients, their commercial insurance companies, physicians, and hospitals. Happy to address any questions. @CenterRotation #radiology
