Physicians object to price benchmarking

by jerry on October 13, 2019
Related to an earlier post, some doctors have joined together to voice opposition to California's solution to surprise billing. The video features many different physicians going through various talking points (it would seem more honest for them to just say that they want to be paid more instead of trotting out the line "patients over profits"). Fortunately, the physicians do not object to ending surprise billing altogether, but rather a specific component of California's legislation called benchmarking -- the practice of resolving disputes between providers and payers by referencing the local average (a practice that I thought gave too much power to insurers). The video does underscore its support for New York's version of the legislation.

I found a Vox article that explains how disputes between providers and payers are resolved under the New York law. Instead of referencing local averages, the New York legislation apparently takes its cues from Major League Baseball. Under this model of arbitration, a neutral third-party is appointed, and both the provider and the payer are allowed to each give one number, and the arbiter can only choose one of those two numbers. By not allowing the arbiter to make up a third number, each party has an incentive to temper its own number in hopes that it will be selected. This arbitration model does indeed seem more fair, assuming that both sides believe the arbiters are neutral.

Unfortunately, it seems that New York's law does not protect patients who rely on mistaken information given by the provider's office. For example, if a provider claims to be in-network, but is not actually, apparently, the patient can be on the hook for the out-of-network price. It feels that there should already exist other types of consumer protection laws covering that case.