The cost of providing employer-sponsored insurance coverage continues to rise, and new legislation requires employers with at least 50 employees to offer affordable coverage or face a financial penalty. Employers are responding in a variety of ways to rein in their health expenditures while complying with these new regulations. One such option is to contract with payers who offer more fixed reimbursement rates. For example, TrueCost, a plan offered by Custom Design Benefits, sets its reimbursement rates based on Medicare rates plus a 40 percent provider bonus. A recent article originally in The Cincinnati Enquirer states that at least nine employers representing more than 5,000 employees are now offering TrueCost.
This arrangement has ignited opposition from local hospitals and doctors who claim this reimbursement is insufficient and would prefer to negotiate rates with insurers. In response to the new insurance plan, hospitals and doctors have indicated they will engage in “balance billing,” a practice that involves seeking payment directly from a patient for the portion of a medical bill not reimbursed by the health plan. The employer groups participating in TrueCost are aware of this risk and have communicated it to enrollees. Yet, TrueCost believes their rates are reasonable and necessary in order to control escalating health care costs. In light of the balance billing threat, TrueCost provides advocates to assist enrollees in locating providers who will accept their plan, though many of the region’s largest health systems have stated they will not accept TrueCost as an insurance carrier.
Several states, including California, have initiated bans on balance billing in response to legal challenges of the practice. These states hold that balance billing places undue pressure on patients to cover the balance of a medical bill disputed by their insurer and provider. No such ban exists in Ohio; however, banning balance billing practices may not be a complete solution, either. HCFO-funded researcher Yaa Akosa Antwi, Ph.D., Indiana University, is currently examining the effects of the balance billing ban in California as it relates to the quality of care received in the emergency department. Antwi’s study will inform policymakers of the effects and potentially unintended consequences of legislative changes to reimbursement. She anticipates finishing the study and publishing her findings later this year. The results will be timely, particularly given the response to the diffusion of TrueCost and the potential for balance billing practices to escalate.