New York's arbitration program for surprise billing leads to decline in consumer complaints: study 

Medical bill healthcare cost price patient spending
A case study dives into New York's surprise billing arbitration program. (Getty/everydayplus)

Consumer complaints about surprise medical bills have fallen substantially in New York in the wake of a 2014 law that established a “baseball-style” arbitration protocol to address these situations, according to a new report. 

Researchers at the Georgetown University Center on Health Insurance Reforms (CHIR) conducted a case study (PDF) on the state’s Emergency Services and Balance Billing Law and found that state officials report a “dramatic” decline in consumer reports about balance bills since the law took effect in 2015. 

Based on an analysis of calls to the Consumer Service Society’s helpline for surprise billing, 57% of complaints were handled using the systems established under the law. 

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“It’s downgraded the issue from one of the biggest [consumer complaints our call center receives] to barely an issue,” a state regulator told the CHIR researchers. 

RELATED: Solution to surprise billing should fall to hospitals, insurers—not patients, experts say 

In addition to surveying state officials, the Georgetown researchers also interviewed physicians, insurers and patients, and they found that overall the participants view the arbitration process as fair. However, providers were more enthusiastic than insurers, according to the study. 

As of October, the number of resolutions in favor of insurers and in favor of physicians is about even, according to the study—618 were decided in favor of payers and 561 in favor of providers.  

Insurers were more likely to win disputes over out-of-network emergency care billing, while providers were more likely to win in situations where a patient is treated by an out-of-network physician without his or her knowledge during an elective procedure. 

However, there are still some challenges that need to be addressed within the arbitration system, according to the study. For one, self-insured plans are not subject to the law, as regulation of such plans is supplanted by the Employee Retirement Income Security Act. 

RELATED: Insurer-backed coalition forms to push efforts to stem ‘surprise bills’ 

In addition, the law doesn’t address consumer literacy around provider networks, which is a major source of the problem. Insurers have also pushed for lawmakers to include surprise bills from out-of-network hospitals—for example, if a patient is unable to choose a hospital in an emergency—in the arbitration process. 

“Determining how providers set prices for their services, or ultimately what those services should actually cost is ‘three-dimensional chess,’” the authors wrote. “New York’s surprise billing law doesn’t attempt to answer any of those questions—it simply says patients should not be the ones expected to figure it out. On that score, the law has been a success.” 

Surprise billing has become a hot-button political issue, though little action has been taken to address it. President Donald Trump has called for Congress to take steps to mitigate such bills, but White House officials did say they were not enthusiastic about expanding arbitration as policymakers look for models. 

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