Odds are pretty good if you walk into an emergency room anywhere, it's going to be run by a company based in Tennessee. In roughly two-thirds of ERs, the doctors don't work for the hospital. Instead, they work for a physician services firm, and the biggest are Envision and TeamHealth.
Those companies treat the patients and handle the billing. And that has made them prime targets in the growing rage against "surprise medical bills," which has resulted in legislation being considered by Congress.
Often, the surprise is that the physician was out of network, even though the hospital was in network. This often occurs in emergency rooms since, at best, someone will make sure a hospital is covered by their insurance. Once there, most people wouldn't even know to ask if the physicians are in their network.
Envision and TeamHealth have been accused of using this as a way to just get paid more and boost their profits. But both companies insist they always prefer to have an agreement with insurers.
"If we are not in-network, we are not in-network because we've been offered an unreasonably low level of reimbursement," TeamHealth CEO Leif Murphy tells WPLN in an interview.
Even if the insurance company won't agree to pay the doctor staffing company as much as they would like, most specialties can't afford to remain out of network with the big insurers for long. Patients will just stop coming.
But ERs attract patients anyway. And the common practice has been that physicians take what they can get from insurers and bill the remaining balance to the patient, known as "balance billing."
The balance bill has become the quintessential example of a surprise medical bill, though survey data from the 2018 Kaiser Health tracking poll shows patients are more often just surprised at how little their policy covers, requiring a big deductible or copay. But there is a growing consensus that balance billing — while it may have been good for business in recent years — is something patients won't put up with anymore.
Concerns With Alexander-Murray Bill
The proposal these companies are most concerned about comes from their own senator, Lamar Alexander. He's chair of the health committee and he's been trying to push through some bi-partisan legislation to address health care costs before he retires next year. There's a lot in it, but item number one deals with surprise billing. For starters, he would try to do away with much of the balance billing by essentially forcing doctors to match the networks of the hospitals they're in.
Murphy of TeamHealth has some concerns since doctors would lose leverage with health insurers. He points out, insurance companies sometimes have a virtual monopoly in a market, even in a state. And while his company is worth billions of dollars, the big insurers are many times bigger.
"I'm not opposed to a ban on balance billing whatsoever," Murphy says. "If we ban balance billing, we have to have a mechanism in place, though, where we can insure that we do get to reasonable contract rates between the payer and the provider."
According to a 2018 Yale study, sometimes these physician staffing companies have strategically gone out of network in the hopes that insurers will hear enough complaints from patients, and agree to higher in-network rates.
Murphy says TeamHealth stopped going after patients for out-of-network charges three years ago. But that's required constantly suing insurers, spending $10 million on litigation in 2018, according to Murphy.
The Alexander-Murray bill and several others would create a system where a third party steps in to decide what's fair. This is being tried in New York state already. TeamHealth and Envision executives generally think it could work nationally and leave patients out of the fray, though the details will be important.
TeamHealth and Envision have thrown their support behind House legislation from Reps. Raul Ruiz of California and Phil Roe of Tennessee.
Why Surprise Medical Bills Spiked Into Public Attention
Media attention, like the Kaiser Health News 'Bill of the Month,' explains much of the energy behind surprise medical bills, which has also inspired state legislatures to take action. But the pocketbook issue also exposes a fundamental fact about how health care has come to be paid for.
"Right now, the commercial payers cross-subsidize much of the care that's provided to Medicare and Medicaid patients. And that type of cross-subsidization is required to ensure the system stays in place," says Adam Brown, an ER physician and senior vice president with Envision.
Brown acknowledges that patients with commercial insurance are being over-charged to keep emergency rooms afloat, often several times more than what Medicare pays. And as rates for commercial insurance have escalated along with out-of-pocket requirements, that sticker shock is shocking more people.
It's a tug-of-war between big business and even bigger business. But physician service companies say they're trying to defend the livelihoods of physicians and maintain emergency rooms in under-served areas.
"I think we can all agree that what's happening now is not feasible long term," Brown says. "We all want to see an improvement in the way the system is delivering."