WASHINGTON, D.C.—Recent studies from California and New York demonstrate the real impact and potentially unintended consequences of proposals meant to protect patients from surprise bills.

A new survey of California physicians shows the state’s law to solve surprise billing is not working as intended. There are real concerns the model—which mirrors the rate setting, or benchmarking proposals under consideration in Congress—could increase health care costs as much as 30 percent and limit patients’ access to in-network physicians.

Physicians report greater difficulty in contracting and the vast majority are concerned that similar federal legislation could accelerate health care consolidation. Other findings include:

• 94 percent of physicians agree the congressional bills modeled after the California law will economically incentivize insurers to terminate contracts with physicians.
• 88 percent of physicians said the California law allowed insurers to shrink physician networks, decreasing patient access to in-network physicians in their community.
• 79 percent of physicians said the California law negatively impacted the availability of emergency and on-call physician specialists who respond to emergencies.
• 77 percent agree that the federal legislation will disproportionately harm rural areas.

In direct contrast, recent findings from the New York Department of Financial Services found the state’s solution to stop surprise billing lowered in-network emergency physician payments by 9 percent while saving New York consumers more than $400 million in four years.

“California’s experience is a warning sign that federal surprise billing proposals that include rate setting will endanger America’s emergency care safety net while raising health care costs,” said Laura Wooster, MPH, Associate Executive Director of Public Affairs for the American College of Emergency Physicians. “Instead, Congress should model federal legislation after the fair and proven approach used in New York, which successfully protects patients from surprise bills while avoiding unintended consequences.”

The New York-style model—similar to the approach included in HR 3502, the “Protecting People from Surprise Medical Bills Act”—can ensure system savings while preserving access to care for patients. It’s been proven to be efficient and fair to insurers and providers. And, by effectively utilizing independent dispute resolution (IDR), it lowered the cost of care, generated savings and nearly eliminated surprise bills. 

“It is hard to reconcile the findings from New York—which the New York Department of Financial Services based on its own data about the real-world impact of the law—with flawed third-party analyses, especially those promoted by insurance industry-supported researchers and others,” said Wooster.

There are also significant issues with the Congressional Budget Office (CBO) analysis of surprise bill proposals, which is limited to a paraphrased recounting of an email from the agency to a Congressional office, rather than a full report.

ACEP urges Congress to take a thoughtful approach and look to proven successes when considering the best solution to protect patients without impacting access to care or driving up costs.

Visit www.protectemergencycare.org for more information.