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Testimony: House Insurance Committee, Promoting Transparency in Patient Billing

Statement of The Hospital and Healthsystem Association of Pennsylvania

For the House Insurance Committee

Submitted by

Jolene H. Calla
Vice President for Healthcare Finance and Insurance
The Hospital and Healthsystem Association of Pennsylvania (HAP)

Harrisburg, Pennsylvania February 5, 2019

Good  morning  Chair  Pickett  and Chair  Deluca. Thank  you for having  me here today. My  name is Jolene Calla and I am the vice president for  health  care  finance  and insurance  for  The Hospital and Healthsystem Association of Pennsylvania, or HAP. HAP represents  and advocates for nearly 240 acute and specialty care hospitals and health systems across the state. We appreciate the opportunity to discuss how HAP and Pennsylvania  hospitals  are  working  to promote transparency in patient billing.

Balance billing is a complex issue, and we applaud the committee for scheduling this informational meeting to better understand the perspectives of consumers and other stakeholders.

I will provide background on this issue, describe ongoing efforts by the hospital community to improve transparency for patients, present hospital observations for consideration as legislation is crafted, and recommend some steps that the Commonwealth could take today to address this issue.


Health insurance has become increasingly complex. Part of the complexities include new insurance product designs, some of which are structured to have tiered or narrow networks. These networks involve higher out-of-pocket costs for consumers when they see providers who are in a less preferred tier or are completely out-of-network for a particular  insurer. That results in higher deductibles and/or copays for the patient.

In addition, health insurers contract separately with health care facilities and physician groups, which means that not all physician groups providing services in a hospital setting will participate with the same insurers as the hospital.

These factors- an d others- make it more and more difficult for consumers to navigate the health care system. This also has led to the problem of "surprise" balance bills, which arise when the hospital is in-network, but some hospital-based physicians providing care in that hospital are not, for example, an emergency department physician, anesthesiologist, pathologist, or radiologist.

Hospital Efforts to Improve Transparency

To help address this complexity, more than 70 percent of Pennsylvania's licensed, general acute care hospitals and some specialty hospitals voluntarily adopted HAP's Principles and Operational Guidelines for Consumer-focused Hospital Financial Services. These principles demonstrate the commitment of the hospital community to ensure that consumers have a better understanding  of their financial responsibilities, and how to get help if they have challenges in meeting those responsibilities. These principles are based upon national best practices developed by the Healthcare Financial Management Association and the American Hospital Association.

Hospitals recognize that, as consumers become more involved in making decisions about their medical care, they need and deserve up-front information about what they may have to pay out-of-pocket for their care. The goals are to eliminate surprises and to help consumers navigate a complex billing system that involves many parties, including insurance companies, patients themselves, physician practices, hospitals, employers, and government entities.

As of January 1, 2019, hospitals are required to post pricing information online for any good, service, or procedure that is provided by the hospital. We know this information is confusing, so hospitals are going above and beyond the federal requirements to connect patients and families with financial counselors or patient advocates who are trained to help people understand what they may have to pay in their individual situations. These extra efforts further demonstrate the hospital community's commitment to promoting transparency  practices and adopting technology, such as customer price estimators, to ensure that consumers have the information they need about financial issues.

Recommendation for Preliminary Steps

There are some practical steps that the Commonwealth could take today to address network adequacy and transparency which would, in effect, help address the issue of "surprise" balance bills.

In the current health care environment, it is increasingly important to continually confirm that insurance products are meeting existing network adequacy standards as set forth in Pennsylvania law. With the proliferation of tiered networks, Pennsylvania could add additional rigor to state monitoring of plan networks, and increase the frequency of insurer reporting, to ensure that access is truly available to plan participants as represented in reports to Pennsylvania regulators.

HAP's Observations

In light of ongoing stakeholder meetings and continued legislative discussion, HAP offers the following observations:

  1. Hospitals agree that, in any proposed legislation, consumers should be held harmless-other than  for  in-network  cost-sharing-and  providers  can  bill the carrier for the service.
  2. The legislation should clearly define the role of the insurer in prohibiting surprise ·bills.Insurers have the primary responsibility to ensure that their networks include adequate providers and that hospital-based physicians are included in their directories and on their websites. Insurers also should be encouraged to take all reasonable steps to proactively educate their members, so plan participants better understand their coverage and its limitations. Taking steps to better define the role of the insurer could serve to reduce the incidences of surprise balance billing.
  3. The hospital community supports efforts to empower consumers. If consumers are provided with more information (written or verbal) early on in non-emergent situations they will have more control in choice and may, in some instances, be empowered to avoid "surprise" bills. Again, insurers are in the best position to help consumers enrolled in their plans with benefit and payment information because insurers have complete details specific to each enrolled individual.
  4. The committee should carefully evaluate any process proposal that includes arbitration. HAP member hospitals have expressed significant concerns relating to any form of mediation that includes arbitration. In other states where this has been implemented, it has imposed a significant administrative burden on providers, and may not meet the goal of establishing a process that appropriately balances the interests and resources of providers and insurers.
  5. Federal attention and potential action on surprise billing. This is not just a Pennsylvania issue. There is currently heightened interest from both parties in Washington to issue some direction that would prevent the surprise balance bill situation from occurring. Proposals under discussion vary in scope and approach, however it should be noted that any federal action could supersede Pennsylvania's efforts.

The issue of "surprise" bills is a  complicated  problem  for  consumers  and the health  care system. In light of recent discussions in Pennsylvania around the potential scope of  surprise  billing legislation, and with the real potential for action at the federal  level,  HAP  is reconvening  our Balance Billing Task Force and will revisit the association position to determine  what,  if  any, changes are needed.

In closing, I would like to  reinforce  that  HAP  is  committed  to  working  with  the  General Assembly, consumers, and other  stakeholders  to  address  this  important  issue.  Thank  you  for the opportunity to comment during today's meeting. I am happy to take any questions you  may  have.




Topics: Billing/Transparency, Insurance, State Advocacy

Revision Date: 2/5/2019

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