When it comes to ending surprise medical billing, we know that a fair benchmark standard based on local market rates is the best way to provide safeguards for patients and their families during health emergencies while ensuring that providers are reimbursed at a market-based rate.
While arbitration would mandate an expensive, time-consuming and convoluted process that does nothing to address the actual problem behind surprise medical billing, a local benchmark standard would protect patients from unfair and unreasonable bills while reimbursing out-of-network providers based on a fair rate that reflects the actual cost of care in their communities.
A fair local benchmark standard is quickly becoming a consensus solution to the problem of exorbitant surprise bills. However, those who benefit from non-market pricing are committed to maintaining their pricing power. Some have even asserted that requiring those providers who purposely opt out of networks and engage in surprise billing to accept local, private-sector in-network rates is equivalent to government price-controls and a step towards a single-payer system.
This couldn’t be further from the truth.
The reality is that a fair benchmark standard based on local, in-network rates intentionally relies on private sector processes for establishing a market-based rate for medical care in a geographic area without having to rely on government rate-setting. No government entity is setting rates for providers and private-sector negotiations remain in place between providers and health plans.
Under the local benchmarking proposal included in the Lower Health Care Costs Act, health plans and providers would still be responsible for calculating rates specific to local markets and specialties.
These rates would only apply to providers that remain out-of-network and only in emergencies or when out-of-network providers see patients at in-network facilities. Further, a benchmark rate does not prevent a provider from negotiating with a health plan before care is provided.
A local, market-based benchmark standard is the right way to address surprise billing precisely because it harnesses the power of private markets to protect patients and ensure providers are reimbursed fairly.
The real threat to private sector health care are entities that insist on gaming the system. Far from paving the way for single-payer health care, this local benchmarking proposal would make the market-based system work better and more efficiently, saving taxpayers $25 billion over 10 years, according to the Congressional Budget Office. That’s a recipe for success.