Page 9 - Delaware Medical Journal - November/December 2019

The Fight for Price Transparency and Against Surprise Billing
PRESIDENT’S PAGE
ANDREW W. DAHLKE, MD
MSD President Andrew W. Dahlke, MD is a Neuroradiologist who practices with Southern Delaware Imaging Associates in Lewes.
Medicine is the one industry where a service is purchased, and the user of that service has no idea
how much it will cost. Consumers usually don’t care about the cost, unless they are uninsured, have not met their deductible, or are getting a surprise bill through out- of-network exposure.
Medical prices (especially at hospitals) are sky high and make as much sense as the $10,000 toilet seat cover purchased
by the U.S. Air Force for the C-5 Galaxy cargo plane.1 When I ask hospital CEOs and CFOs why hospital prices are so high, they always argue that because we lose money on every Medicaid and Medicare patient, we have to make up the difference on the patients that are privately insured.
Back in our parents’ generation, a hospital or a doctor would bill for services and
the insurer would pay that amount. The private insurers fought back and said, “We cannot pay those high fees; we will only pay you 85% of what you charge.” The hospitals said OK, and promptly raised their rates to compensate. This same process of payment cuts and compensatory hospital price hikes has continued with multiple iterations over decades. This process explains why
the technical fee for an MRI or CT in a hospital system is often $2,000 or more, and the technical fee for an MRI or CT at
President Donald Trump’s executive order
on price transparency states that effective price transparency must distinguish between billed charges (i.e. the hospital price) and the negotiated payment rate paid by the insurer.2 These contractual arrangements determining the differential between hospital charges and payments have been clouded in secrecy for decades.
If the price of a service, the payment received from the three largest private insurers, payment received from Medicare, and payment received from Medicaid were all listed at the time of scheduling a procedure, a self-pay patient would have the opportunity to negotiate with the provider.
Currently, when a hospital gets a self-pay individual, the typical cash discount is 10%. This pales compared to the 75% discounts that are negotiated by powerful insurance companies. The uninsured, and those caught inadvertently receiving expensive full-price out-of-network care, pay through the nose. These people need to be protected. This second situation is what is referred to as “surprise billing.”
Insurers build incomplete networks
by lowballing independent doctors on reimbursements. The hospital getting
a better deal will agree to terms and sign the contract. The doctors who are independent and are offered below- Medicare rates do not sign the contract. This produces a situation where independent on-staff physicians are out of network, while the hospital itself is in
Del Med J | November/December 2019 | Vol. 91 | No. 6 249