June 01, 2017

Bills, Bills, Bills: Alternative Dispute Resolution Takes Center Stage in Health Care Billing Disputes

Michael Kilpatrick Morton, Nevada Legislative Counsel Bureau, Carson City, NV

As the controversy over access and affordability to health insurance and healthcare continues to swirl in the nation’s capital,1 state legislatures, insurers, and providers remain tasked with operating under a framework that provides adequate healthcare to consumers while sufficiently compensating providers for such care. Central to the debate over the cost of healthcare is choosing the most efficient and patient-centered way to settle billing disputes among patients, providers, and insurers. One focus of these disputes is balance billing, which occurs when a provider of healthcare bills a patient for the difference between the provider’s charge for services provided to the patient and the reimbursement for such services paid by the patient’s insurance carrier.2 Charges billed for services rendered by out-of-network providers can cause substantial financial strain or ruin -- according to one study, the average out-of-network charges are three times greater than the corresponding Medicare rate for such procedures.3 Often these out-of-network charges occur in situations when emergency services and care are rendered. Since 2015, some states have taken legislative action to curb the practice of balance billing,4 while others are currently considering policies to both help patients avoid out-of-network charges incurred when receiving emergency care while creating protections to ensure fair payment practices for both providers and insurers through the utilization of alternative dispute resolution (ADR). 

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