Fair Physician Payment for Services Rendered
My name is Dr. Theodore Mazer, president of the San Diego County Medical Society, trustee of the California Medical Association, and, most importantly, a solo practitioner of otolaryngology in active medical practice. I represent over 4,000 local doctors who practice medicine, not medical management. Thank you for accepting SDCMS’ request to hold this additional hearing on fair physician payment for services rendered and the proposed DMHC regulations regarding bans on billing patients, which are, unfortunately, a destructive, not constructive, approach.
The DMHC and the governor made two statements regarding so-called “balance billing” that ring true, yet the approach being recommended by proposed DMHC regulations fails to target the right party. First, you have asked that the patient not be put in the middle since the plans have indemnified their enrollees for emergency care. That being the case, the plan should be held fully accountable and responsible for paying the physician for services needed to stabilize and treat their enrollees when presenting to the ER. Second, you state that plans must compensate physicians for these services and that physicians are entitled to be fairly paid. Yet, the DMHC has wrongly sided with the health plans and their delegated groups in holding to the totally unsupportable claims that: 1) non-contracted physicians are prohibited from billing patients for emergency services; 2) there is some sort of implied contract between a plan and a physician providing emergency services when the physician has no signed contract; and 3) fair rates are somehow based on governmental and contracted rates rather than fees that a physician traditionally charges for services.
The first assumption holds no water; nothing in HS code 1379 prohibits holding the patient responsible for the bill when the providing physician holds no contract with the patient's insurer. The second point is more concerning as it violates every concept of contract law and fairness. It essentially eliminates any reason for a plan to EVER enter into fair and reasonable negotiations with doctors to provide services, while allowing health plans to arbitrarily set rates for all providers of medical services. As well, it leaves no reason for the plans to actually create adequate networks to serve the very patients they are responsible to. The third, point regarding how one arrives at UCR, is more the subject of the Gould criteria discussion — which will take place later — but, clearly, one doesn't include in calculations of USUAL rates the DISCOUNTED rates that a contract results in, since such contracting already implies that a discount is taken from UCR in return for something (directing patients). To use that discount as representing a true customary rate is wrong.
DMHC should use its actual scope of authority to ensure that plans have in place adequate networks of contracted providers who are available for such coverage 24 hours a day, with readily available contact numbers for ERs to get hold of them. Absent such networks, built by open and fair negotiations between doctors and plans (rather than the take-it-or-leave-it actions by plans that garner their power by DMHC inaction), the plans should absolutely be held responsible for paying UCR, not discounted rates, to those doctors who indeed place themselves in the service of patients day and night, often for hours and days after admission, and at personal liability. For the DMHC to ban the ability of non-contracted doctors to bill the patient, while simultaneously failing to hold the plans responsible to pay the physician's bill as charged or to force the plan to prove that such a bill is not reasonable, is an approach that defies a logic. It will, in fact, not result in removing the patient from the middle of the problem but rather in causing a decline in the public's access to emergency care.
With on-call coverage already at the heart of ER problems, such an approach by the DMHC is tantamount to active destruction of the emergency care system and is irresponsible. In the end, if the plans either negotiated fair rates (which they clearly do not, or there would be few gaps in coverage) or paid fairly for non-contracted care, the patient would not NEED to be in the middle. What is needed is a balanced approach that recognizes that physicians need to be fairly paid for their services in order to maintain access to such services, while plans need to be held responsible for either creating adequate panels or paying reasonable rates to those physicians who cover the ERs when contracted docs are not available, all the while protecting the patients from so-called egregious billings by physicians. In fact, thus far very few examples of such egregious billings have actually been demonstrated to exist by the DMHC.
Ethical doctors and organized medicine stand with the patient regarding egregious billing if it is shown to exist. For these matters, we must work together to develop an appropriate and PROVEN dispute resolution system to be used by physician and payer. But, until such a system is developed and shown to be workable, physicians will not, and cannot, tolerate any ban on billing for fair payment for services rendered in the ER setting. Nor will the on-call system likely survive such a ban.
The DMHC has used the term “pay and chase” in this regard. The fact is that it is indeed the plan's responsibility to pay claims, and, if the plans or their agents somehow feel the rates charged are too high, it is the plan that needs to chase and prove their point. After just a few such “pay and chase” cases, I fully expect that plans will cease their false claims about egregious billings since the vast majority of billings are reasonable. What is unreasonable is the payments the plans offer and pay. What is more unreasonable are regulations that continue to favor plans that render no care while hammering the very providers of that care to a point where care will cease to exist.
CMA stands ready to work with the DMHC to create fair and appropriate mechanisms to look at and resolve the in fact rare cases of unfair billing. CMA stands just as ready to fight unfair regulations that ask doctors to serve public needs without seeking fair compensation for time and services.
Additional comments:
1) With reference to the Independent Dispute Resolution Process (IDRP): Why is it that, when a patient voluntarily gets out-of-network care, the plan pays its share, and the doctor then bills the patient … with the plan’s blessing? And if a non-insured patient is seen in the ER, they MUST be twice billed before a request is made for Maddy funds? Is this situation really that different? If it is, then why doesn't the plan comply with its own responsibilities to relieve the patient of responsibility? The issue is much worse when one considers that plans direct patients to the very emergency rooms where the ER docs have no contracts, then denies full coverage for the ER doctor's services because they were out of network!
The DMHC also asks that non-contracted doctors be forced to use the internal appeals policies of plans before going to court or billing the patient. I ask, if the doctor has not agreed to accept any terms from the plan, why on earth would the doctor be subjected to an internal appeals process, which we all know takes months and often gets dropped by the plans? I can give you great examples of ongoing internal appeals processes on thousands of dollars of claims in my practice that have been generating paperwork and lost time for over six months!
2) With reference to how one sets market value for physician services: This question was raised numerous times, and several suggestions, including use of Gould criteria NOT including already discounted rates from contracts or government payors, were given. Most important in the DMHC discussion is that it is NOT the purview or role of the DMHC to do anything to set rates! Far from it. The DMHC should be addressing how to allow for fair negotiation of rates between parties and for fair payment using market information and UCR standards when no contract exists. UCR can be defined in numerous ways using Gould and available data from plans that show what a given service is billed at by physicians in a local area. That is 'market' and should be the basis of any settlement of a disputed billing. DMHC should not be trying otherwise to establish market rates.
3) With reference to cost-shifting and who is responsible for costs of uninsured: DMHC questions were raised as to why the health plans should be asked to pay providers more in order to offset the costs of the uninsured. In the first place, that argument is a smoke screen. Paying fairly for non-contracted services is simply that: paying fairly for services provided when a contracted provider is not readily available in the ER setting due to inadequate panels and unfair health plan contracting terms. It is a wholly separate issue from funding for uninsureds.
Secondly, if plans paid fairly, more physicians would be inclined to provide services for the uninsured. In fact, it is currently ONLY physicians and hospitals that provide for those services, since insurers NEVER pay anything for the uninsured. To imply that the physicians are asking the plans to pay them for the uninsured indirectly is absurd. Furthermore, the plans are highly profitable and truly ought to help absorb the burden that has already been thrust upon the actual providers of care (along with the state). The implication that it is the providers themselves who are responsible to take in the additional burdens, while the plans continue to escalate both premiums and profits, ignores the unfair and non-level playing fields already in place and advances the dissolution of the emergency care safety net. For the DMHC to even consider that somehow it is the private doctor's responsibility to absorb all of the unreimbursed care — while for-profit plans and delegated groups take the money to the bank, while failing to provide adequate networks — is shortsighted … if not evidence of bias on the part of DMHC as to the capacities and responsibilities of the parties.
Thank you for your consideration and hopeful abandonment of these ill-conceived and improperly directed proposed regulations.