A House panel on financial issues got deep in the weeds of health care policy Tuesday as lawmakers took up a controversial proposal to change the way insurers are reimbursed by hospitals and other providers when patients receive care beyond their insurance network.
The deceptively simple 11-page bill was the subject of over an hour of testimony and debate. Insurance and business groups generally supported it while many physicians and providers’ groups, with some exceptions, opposed it.
The proposal – HB 221, filed by Rep. Carlos Trujillo – would give insurers the discretion to charge a “reasonable” fee to bill providers when patients go out-of-network, which is common in emergency room situations.
Essentially all legislators and testifiers agreed on one basic principle of the bill: hold the patient – one third of the patient/provider/insurer triad – harmless. But for the other two legs of the triangle, the devil was in the details.
Republican Rep. Jay Fant put the question simply early on in debate: “If balance billing the patient is prohibited, what cost gets eaten and who eats it?”
Committee Chairman Rep. John Wood, who presented the bill in place of the absent Trujillo, disagreed with the frame of the question, but much of the testimony that followed seemed to assume it as the crux of the issue.
Executive Director of the Florida Orthopedic Society Fraser Cobb told the panel the bill would swing leverage in contract negotiations too far in the favor of insurers.
Cobb said if passed the legislation would take away providers’ incentive to negotiate, leading to more arbitration and ultimately higher rates for patients. He also said most on-call orthopedic surgeons – 81 percent, according to an internal survey – would likely pull out of emergency duty, leading to less access and higher costs.
Daniel Brennan of the Florida College of Emergency Physicians struck a similar note when he said the bill’s “one-sided” payment mechanism was “destined to undermine” relations between insurers and physicians.
National Federation of Independent Businesses representative Tim Nungesser, on the other hand, was among the roughly half of speakers in favor of the bill. He told the panel his travels around the state hearing “horror stories” of over-billing by providers.
The Florida Association Health Plans is also in favor of the legislation.
“The current system of balance billing threatens Florida’s consumers by putting them on the hook for the retail cost of health care services,” said the group in a statement Tuesday morning. “Even in instances when a policyholder is able to choose to go to an in-network hospital and even an in-network surgeon, they may also be seen by an out-of-network anesthesiologist, leaving them subject to a balance bill for the cost of the anesthesia services, which can amount to a financially debilitating bill.”
“Fortunately,” said FAHP, the bill would “shield consumers from the practice of surprise balance billing by prohibiting health care providers from billing a consumer for the balance of the retail charges above what the insurance company has already paid in situations when a consumer has no ability to choose an in-network provider.
Lawmakers were of two minds about the bill too, despite its unanimous passage.
“Since we started talking about this issue a year ago, I’ve been on both sides of this debate,” said Republican Rep. David Santiago. “It’s very complicated. What we did with the bill, was we created a food fight.”
Republican Rep. Kathleen Passidomo summed up many of her colleagues’ views when she said the bill was “20 pounds of potatoes in a five-pound sack.”
Passidomo, at attorney by trade, said she was tempted to vote against it because it created “so much bureaucracy. I don’t think we need all that.” She added she would not vote ‘Yes’ on the bill in its current form – or, she added, in the likely event it expands even more during the committee process.
Half a dozen amendments sponsored by Trujillo were not heard due to his absence. Whether the changes they contain will better appeal to future panels remains to be seen.
The bill is set to be heard next by Appropriations before hitting the Health & Human Services Committee. A just-filed Senate companion bill has not yet been taken up.