A cold war over how to stop surprise medical bills in Virginia has been dragging on for years.
On one side are insurance companies. On the other are doctors and hospitals. Trapped in the middle are patients, who get stuck with expensive medical bills after finding out after the fact that they were treated by out-of-network providers at otherwise in-network hospitals.
Exhausted by the standoff, two influential members of the House of Delegates are proposing a third-way solution negotiated without lobbyists from either side.
“This is our attempt to find a sweet spot,” said Del. Mark Sickles, D-Alexandria, who proposed the measure with House Appropriations Chairman Luke Torian, D-Prince William.
Insurance companies back legislative proposals that set fixed rates that they can fall back on in the event they get a bill from an out-of-network provider. But doctors and hospitals say those proposed rates are too low and eliminate any incentive for insurance companies to negotiate to bring them in network.
Hospitals and doctors’ groups have generally advocated for proposals that resolve billing disputes through arbitration, a process insurance companies say is so expensive and time consuming it would be impractical for them to contest all but the most expensive surprise bills, tipping the scales in favor of the providers.
Sickles and Torian are proposing a new approach that would rely on the Virginia’s Bureau of Insurance to resolve billing disputes. The regulator would make its decisions on what’s a fair bill based on an as-of-yet-not-calculated “market-based value” that would attempt to average how much services generally cost in a given area.
“No one knows what this will do, but I’m attempting to get a realistic price that’s attractive to doctors but not so rich they’ll never join an insurance network,” Sickles said.
He said he and Torian developed the proposal with experts from the Bureau of Insurance and the nonprofit Virginia Health Information, which tracks health data from a range of providers throughout the state.
The Senate, meanwhile, is sticking with the approach favored by hospitals, doctors and, this year, consumer advocates. Proposed by Sen. Barbara Favola, D-Arlington, the bill would require medical providers and insurance companies to resolve billing disputes through third-party arbitration. The arbitrator would determine the “reasonable” value of the services rendered.
They voted down legislation favored by insurance companies that would allow them to pay whichever was lower: the median in-network costs for the medical services or 125 percent of the amount that would be paid under Medicare. Similar legislation survived crossover last year, but failed largely due to the same debate over the proposed rates.
“There was no move towards compromise,” said Jill Hanken, a health attorney with the Virginia Poverty Law Center. “It was going in the wrong direction in terms of negotiations.”
The Senate Finance Committee also voted down a substitute version of the legislation introduced by committee chairwoman Janet Howell, D-Fairfax, on Monday night that resembled the House’s final version of the bill. The committee initially approved it, but then reconsidered.
“I would regret us making a decision here that none of the stakeholders intended,” said Sen. Jill Vogel, R-Fauquier. “The consumers who are getting screwed aren’t here to advocate on their own behalves.”
Sickles said the differences between the House and Senate likely won’t be worked out until the end of this year’s legislative session, when lawmakers from each chamber will meet for negotiations.
And he said that while lawmakers are trying, he wouldn’t be surprised if the whole initiative fails in the final days of session.
“Because it’s failed for several years now,” he said.