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COVID-19 Patients Should Not Face Surprise Medical Bills

In the crush of news over the explosive spread of COVID-19, Congress has moved aggressively to pass the Families First Coronavirus Response Act. While imperfect, this bill will do much to provide free COVID-19 testing and extended paid sick leave for many but not all workers. But it doesn’t cover hospitalization or care needed for people who actually contract the disease.

It also doesn’t take up the issue of surprise medical billing at a time when we expect a massive surge in emergency room visits and hospital admissions related to the disease.

If patients go to the emergency room of a hospital covered by their health insurance, they may receive a large out-of-network bill if the ER has been outsourced to a physician staffing firm that is not covered by the insurance. The physician staffing firm can charge whatever it likes.

Legislation to curb surprise medical bills has failed to pass the House or Senate after almost a year of haggling over technical provisions: While patient advocates and payers want out-of-network doctors to charge a fee benchmarked to in-network or local rates, physician providers and staffing companies backed by private equity firms have lobbied hard to prevent this, resulting in a stalemate.

At this time of crisis, large physician staffing firms that have been the worst offenders of surprise medical billing may take advantage of the crisis. They stand to make “outsized” returns as the surge of COVID-19 patients overtake ER rooms and are admitted to hospitals. Once admitted, patients may continue to face surprise medical bills by out-of-network doctors. With the length of stays unpredictable but likely to be long, patients may face particularly large surprise bills compared to the past.

Even in non-crisis times, patients have faced millions of dollars in out-of-network bills. A recent academic study, for example, found that if these medical specialists were not able to charge out-of-network rates, physician payments from privately insured patients would have been 13.4 percent lower and annual spending for people with employer-sponsored insurance would have been $40 billion lower.

Private equity-backed physician staffing firms, in particular, have large incentives to continue surprise medical bills unabated because their business model — of buying out companies and loading them with excessive debt — depends on it.

They need outsized returns to service the debt and pay it down — returns they cannot get via in-network rates.

The exponential increase in the COVID-19 emergency patient load, however, provides an ideal opportunity for physician staffing firms to raise their revenues exponentially as well — once again on the backs of patients in crisis.

Congress must act immediately to reign in the unscrupulous practice of surprise medical billing.

If the government won’t act, then physician staffing firms should self-restrain — before they are publicly shamed.

If millions of Americans can self-isolate, then private equity firms and out-of-network doctors who have already made millions on the backs of sick people can do the right thing  — if they choose to.

Rosemary Batt is the Alice Hanson Cook Professor of Women and Work, Cornell University ILR School.

Eileen Appelbaum is the co-director of the Center for Economic and Policy Research and visiting professor, School of Management, University of Leicester, UK. Appelbaum and Batt are co-authors of “The Potential for Good Jobs in Hospitals and Outpatient Care,” and “Private Equity at Work: When Wall Street Manage Main Street.” 

This column first appeared in The Hill.

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