Doctors and Health Plans Strike Last-Minute Deal on Uncontracted Payments

A consensus emerged pegging rates to the median from the all-payer, all-claims database, averting confusion when a new law protecting consumers from surprise billing takes effect on March 1.

Physicians and health insurers have struck a deal on the problem of payment for uncontracted providers, pegging reimbursements to the state’s All-Payer, All-Claims database, in a deal that the Senate Health Committee approved on Wednesday.

The pact allows insurers to reimburse an out-of-network provider for emergency services or other covered services at an in-network health care facility according to the median commercial insurance reimbursements in the database in 2015. The index will then be fixed to inflation.

Although both sides gave up ground to reach a deal, insurers held firm in final negotiations while physicians agreed to the position that the health plans laid out a month ago.

The doctors could have been left in a chaotic arrangement next month -- unable to bill patients, but left fighting health insurers to get paid anywhere close to market rate for their services. There were even signs that the new leverage for insurers was driving down rates for contracted providers.

“I think if we don’t come up with anything, the providers are more imperiled than the insurers,” said Sen. Lee Beyer, D-Springfield.

“With the balance billing ban's March 1 effective date around the corner and no set reimbursement standards in place, insurance companies were beginning to lower contractual rates,” said Courtni Dresser, a lobbyist for the Oregon Medical Association.

“The agreed-upon amendment, although imperfect, will provide some temporary predictability. Providers who find themselves in ‘surprise billing’ circumstances will have some predictability in what reimbursement from their patients' insurance they will be paid, while patient themselves will be afforded access to needed services as well as what we hope will be financial protection under their benefit plans.”

The Oregon Medical Association and other doctors’ groups had tried to get insurers to agree to pay them 125 percent of the median payments, since the data is three years old, and pegging it to the general consumer price index in future years may not keep up with rising medical costs.

Consumer advocate Jesse O’Brien, the policy director at OSPIRG, said he opposed setting the rate above 100 percent of the median, and was happy to see a deal that could stabilize access for consumers. “It didn’t make any sense to get more than the in-network amount,” he said.

The billing problem the agreement tries to fix occurs when patients go to hospitals and clinics that are covered by their insurance, but individual physicians and possibly nurse practitioners are not. The patient-consumer is often unaware of this hole in their insurance coverage and can end up with big bills that their insurance would not cover. About 3 percent of all claims fall in this category.

A law approved in 2017, which is to take effect on March 1, prohibits physicians from billing patients directly when the insurer won’t give them fair compensation.

The new agreement defines fair compensation for providers, and if the Legislature approves, will expire in 2022, giving stakeholders time to revise the law.

Medical providers and insurers had not reached an agreement after months of deliberation led by the Department of Consumer & Business Services, and the two sides were still digging in before this session, preventing a bill from being introduced.

Instead, the policy will come as an amendment to Senate Bill 1549, an unrelated bill that allows Oregon State Hospital patients to keep their Medicaid coverage while housed in the institution. That bill, because of a quirk of legislative rules, has become a catchall of unrelated amendments, including a policy to ease the ability of insurers to offer health-savings accounts.

Chris can be reached at [email protected].