September 2019

Cigna’s Take: Surprise medical billing

As an increasing number of patients are receiving “surprise medical bills” at often exorbitant amounts, state and federal policymakers are looking for policy solutions to provide relief. Surprise medical billing can occur when a patient seeks health care services in an in-network setting (hospital or facility), but in the course of treatment, care is provided by an out-of-network physician who bills the patient directly for those services. This is referred to as a surprise medical bill because the patient believed they were receiving care in-network and would be responsible only for in-network cost-sharing amounts. At Cigna, we know that receiving these bills can be one of the most jarring and frightening things to happen to a family. We share policy makers’ concerns and we will continue working with them and our clients to protect patients.

There is currently legislation in Congress aimed at addressing this issue – one bill is moving in the Senate and one in the House. Both bills would protect patients from receiving bills from out-of-network providers they played no part in choosing. Debate continues over how to ultimately determine reimbursement amounts for these providers. The Senate bill sets a benchmark rate to pay out-of-network providers based on a health plan’s median in-network rate for similar services in the geographic area, which is Cigna's preferred approach. Another approach, which is a component of the House bill and preferred by many hospitals and physicians, is referred to as “baseball-style arbitration.” This would require a neutral third party, known as an arbiter, to decide a final payment between the out-of-network provider and patient’s insurer.

At Cigna, we believe hospitals, medical facilities, and provider organizations should work with their physicians and other providers on behalf of the patients they serve to ensure the availability of in-network providers. This is the first step toward eliminating surprise bills. In fact, a recent study of a 2016 California surprise billing law (which uses a benchmark rate solution) not only protects patients from surprise bills, it resulted in a 16% increase of in-network doctors. Requiring arbitration does not offer a meaningful solution because it does not get to the root cause of the problem. Simply put, arbitration will not enhance network participation to end the practice of surprise medical billing. Instead, it is time-consuming, costly, resource-intensive, and could maintain or enhance existing incentives for providers to remain out-of-network.

We support ending surprise medical bills and will continue working with stakeholders like you to advocate on behalf of our customers and all patients. To learn more about Cigna's position on eliminating surprise bills, click here.