AMA to write balance-billing legislation

Chicago -- The solution to inadequate physician reimbursement is simple to some doctors: Bill the patient for any costs that are not covered by the insurer. But physicians need to be successful with a newly approved AMA initiative on Capitol Hill to have the ability to do that.

The American Medical Association, which has long supported the concept of "balance billing," decided at its Annual Meeting in June to prepare federal legislation that would allow physicians to recoup their costs from the patient regardless of primary payer. Medicare and most private insurers currently prohibit or limit participating doctors from charging their own prices to beneficiaries.

Unless Congress changes the statute, doctors who accept all Medicare patients must make do with the program's defined fee for covered services and cannot charge extra even if the cost of providing the services exceeds the amount that the practice is actually paid. Nonparticipating physicians that accept Medicare assignments on a case-by-case basis may balance bill patients, but the extra amount that can be charged is limited to a set percentage of the initial payment.

Physicians supporting a stronger legislative stance on the issue said that the ability to balance bill would alleviate many of the shortfalls that practices are facing, from inadequate Medicare funding to excess costs related to medical liability. They said that a federal solution would take the financial burden off physicians and predicted that private payers would follow the government's lead in relaxing the billing rules.

"If we could balance bill, we would not have a liability insurance problem, because we could put a surcharge to cover our liability on every one of those bills," said David Ingis, MD, an internist and alternate delegate from Willingboro, N.J. "We wouldn't have an HMO problem, because if the patients weren't getting enough money from the HMOs, they would go back ... and ask for more money to pay for the services that we're charging. And we wouldn't have a Medicare problem for the same reason."

Moreover, letting doctors make up their costs in this way would allow them to establish a truly free market system in which physicians could come up with their own reasonable prices and convince the patient that any extra required payment will be well spent, said Bohn Allen, MD, a surgeon and AMA delegate from Arlington, Texas.

"The whole concept of balance billing may be the mechanism that saves medicine," he said. "This is the opportunity for us to get back to the sacred relationship between the patient and the physician and let them decide what the value of the service provided by the physician is."

Concern for patients

But doctors already have the ability to charge whatever they want by completely opting out of Medicare and private insurance and trying to sell their services to patients who will pay out of pocket, said Diane Archer, special counsel at the Medicare Rights Center in New York. Doctors who decline to take that route shouldn't place a higher financial burden on vulnerable beneficiaries simply because the third party's reimbursements are inadequate, she said.

"If they are losing money on a service, they should be going to Medicare and arguing that the rate is not sufficient," Archer said. "To put the patient in the position of having to pay more for services for which they can barely afford the supplemental insurance is not a reasonable solution."

Some physicians at the Annual Meeting also expressed wariness about embracing a system in which some seniors who can barely make ends meet could be required to commit more dollars on top of their premiums and coinsurance payments.

Doctors may find themselves in uncomfortable positions in which patients either fail to settle their bills or use money that they need for other health care expenses, said Charles Willson, MD, a pediatrician and alternate delegate to the AMA from Greenville, N.C.

"How much of what we balance bill would actually be paid by the patient -- how much can they afford?" he asked. "And if they pay our bill, will they be able to buy their medications?"

Alan Harvey, MD, an anesthesiologist and delegate from Boston, said that the call for legislation would interfere with the Association's strategy for fixing the Medicare sustainable growth rate, part of the formula for determining physician pay.

"This resolution will compromise the AMA's focus, angering seniors and distracting Congress from the SGR," he said.

Seeking an end to frustration

The Association's decision to write its own legislation on balance billing does not mean that the push to fix the Medicare formula will take a back seat, said AMA Trustee Rebecca J. Patchin, MD, an anesthesiologist in Riverside, Calif. Both efforts stem from the same frustrations that physicians have with the current reimbursement system, she said.

One of these frustrations lies in the inability of doctors to adjust coinsurance payments downward for needier seniors without adversely affecting the physician fee schedule, Dr. Patchin said. By charging the patients who can afford to pay the appropriate price for their services, doctors would be free to reduce or cancel co-payments for the patients who need the most financial help.

"I will be very happy if I don't have to charge ... co-payments, if I could write that off legally as a service," she said. "I can't do that now."

If financial shortfalls are alleviated through more contractual freedom, doctors would need to provide the highest quality care to convince patients to stay with them and help offset the full costs of their services, delegates said.

"I want to stand with my head high and charge my patients appropriately," said Marcy Zwelling-Aaamot, MD, an internist and delegate from Los Alamitos, Calif. "And if I have not done my job, then let them walk, and let me learn and do it better the next time."