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U.S. News & World Report Homepage MONEY » InvestingRetirementCredit CardsLoansBankingPersonal FinanceCareersReal EstateAdvisors Sign in Financial AdvisorsInvestingMoneyHome Growing Number of Americans Are Facing Early Retirement The economic downturn is pushing older workers out of the nest. By Kate Stalter, Contributor Nov. 30, 2020, at 5:33 p.m. More U.S. News & World Report Many Americans May Face Early Retirement More Senior reading book in house A report found that 2.9 million workers ages 55 to 70 have left the labor force since March.(GETTY IMAGES) ANY TIME A WORKER becomes unemployed during a recession, he or she may need to draw down savings or investments to cover expenses. That problem compounds for workers nearing retirement because they have fewer years ahead to recoup those savings. RELATED CONTENT Guide for Financial Advisors Financial advisors need to help these clients with their retirement planning. A job loss for a person nearing retirement may result in cuts to lifestyle expenses or downsizing the dream for the golden years. In fact, workers over age 55 may be at greater-than-average financial risk due to the current economic downturn, according to a recent report. A report from the Schwartz Center for Economic Policy Analysis at The New School found that 2.9 million workers ages 55 to 70 have left the labor force since March. "These workers are at risk of having to retire involuntarily due to increased health risks coupled with decreased job prospects," according to the study. Researchers note that if these exits continued at the same pace over the ensuing three months, an additional 1.1 million workers in this age group may leave the workforce. That would be a total of 4 million people potentially pushed into retirement due to the pandemic's related economic downturn. [ SUBSCRIBE: Get the weekly U.S. News newsletter for financial advisors. ] Health Concerns Among Reasons Charisse Mackenzie, president of Saturn Wealth in Gilbert, Arizona, says many of her clients chose not to return to the workplace due to fear of contracting the coronavirus. SPONSORED Speak with the Right Financial Advisor For You Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with top fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is legally bound to act in your best interests. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now. "Several of them found that they did not want to commute anymore and did not want to return to the office in person," she says. "Many clients were offered buyouts to encourage them to retire earlier than anticipated, which many accepted." Jeannette Bajalia is the founder and president of financial planning firm Woman's Worth, as well as president of investment advisory Petros Financial Group, which are both based in Florida. Bajalia sees regional differences among her clients when it comes to early retirement this year. "We have offices from north Florida to central Florida, and what I'm seeing is that there are more forced retirements in the central Florida area," she says. "That region has been more impacted by COVID-19 because it's primarily a hospitality and entertainment industry, with Universal Studios, Disney and all surrounding hotels." On the other hand, a number of her clients postponed a planned retirement because they felt less pressured during the work-from-home era. She cites commuting as a source of stress that was eliminated for many. Of course, in any type of economy people have various reasons for deciding to retire or not. That's been true during the pandemic as well. It is important to realize that not all are affected equally by the virus, says Bob Kaye, wealth manager at Retirement Planning Associates in Sherman Oaks, California. "Many employees or companies are affected little or not at all," he says. "Witness the highs of the current stock market as representing corporate profits. There is of course a percentage who are very affected and could lose their job or be laid off or furloughed." He gave examples of employees in the restaurant or beauty industries who may be unlikely to take early retirement voluntarily, as they may have insufficient funds to cover retirement expenses. [ READ: How Can Financial Advisors Serve Clients With Fewer Assets? ] Emotional Aspects Can't Be Overlooked The retirement decision is generally emotional. Even employees who looked forward to retirement often miss the camaraderie of the workplace or the feeling of having a purpose. Mackenzie says economic-related retirements may feel different than planned retirement, as there is a loss of control over the timing. Even if the emotional factors are different, the mechanics of retiring can remain the same. "I really don't think this is different than any other early retirement situation," says Chad Ensign, founder of Ensign Wealth Management in Mesa, Arizona. "It's just a reminder to start building a plan that has some flexibility and contingencies. There will always be unforeseen circumstances that arise that cause early retirement," he adds. Ensign notes that over time, pre-retirees may face personal health challenges, widespread economic issues, domestic and geopolitical uncertainties and recession, among other concerns. "It's similar to what I tell clients about trying to predict a market collapse," he adds. "Over the course of a 30-year retirement, the market will correct, go into recession, a pullback, whatever you want to call it. It will happen five to 10 times, so build a plan that accounts for that." An "earlier than planned" retirement may bring challenges when it comes to income streams. For example, the earliest age to claim Social Security is at age 62. Outside of a few exceptions, such as a surviving spouse, a person who retires before age 62 doesn't have many options on that score and must plan appropriately. Normally, an account owner must wait until age 59½ to make penalty-free withdrawals from an individual retirement account or a 401(k). The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, a $2.2 trillion economic stimulus bill passed by the signed into law in March 2020, allows penalty-free withdrawals through Dec. 31. That's if the account owner has been negatively affected the virus or the economic fallout. The withdrawals are still taxable, but account owners may spread the tax payments over three years. [ READ: Financial Advisor Versus Financial Planner: What's the Difference? ] Have a Plan for Social Security Even claiming Social Security at age 62 may not be ideal, as the recipient is starting benefits before full Social Security retirement age. This means foregoing larger payments that would be available had the recipient waited. The largest lifetime benefit is available to those who wait until age 70. A real financial danger for early retirees, Bajalia says, is foregoing these larger benefits if it's necessary to claim Social Security before full retirement age. It can also be a risk for married couples who are planning on survivor's benefits should the higher-earning spouse pass away first. "Married couples need to be thoughtful about early claiming strategies and need to figure out how to get the most out of Social Security for the survivor," she says. "That's because you end up with only one check, and you want it to be as high as possible because the survivor gets an uglier federal income tax situation. So the problems have to do with the lack of adequate planning. Many individuals think about retirement planning as investment management, and these are two different disciplines." Best Years Are Ahead Even people pushed into a retirement they did not anticipate can stage a strong rebound, Bajalia says. With longer life expectancies, she says, it may not make sense to retire at the traditional age, in any event. "I personally retired at age 55 from a corporate career due to a downsizing the organization went through," she says. "I discovered a need for integrated retirement planning. That was 13 years ago when I started my financial planning career: a second career of purpose and passion, not to earn income or to save money. It was to serve others." She advises her clients to think about their lives in a similar way. "The talent in the baby boomer generation is phenomenal," she says. "The best business ideas, the best business models and the best books are yet to be written by those who may have been forced out of the workforce prematurely. It's not the end, it's a new beginning." 10 Questions to Ask Financial Advisors View All 12 Slides Kate Stalter, Contributor
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Aging Expert Bob Kramer: Hospitals ‘Forced to Face the Fact People Don’t Want to Go There’
By Andrew Donlan | December 13, 2020 Share Send email Bob Kramer was exposed to the aging industry in the 80s when he was serving as a Maryland state legislator. Kramer realized that the aging space was going to become more important — and that seniors would need more resources to be properly cared for in the future. Some of the same problems that existed then still exist today, including a siloed care delivery system and a volume-based payment mentality. But COVID-19 could play a hand at changing that, with home-based care providers leading the way. Kramer serves as a special advisor to the National Investment Center for Seniors Housing & Care (NIC), which he started in 1991. He served as the president until 2017, when he stepped into a role as a strategic director. When COVID-19 arrived in March, there was a slew of new issues to deal with. “COVID, on one hand, has made things more challenging because people are just overwhelmed with the pressures of the disease and how to address it for themselves for their workforce,” Kramer said during the Home Health Care News Capital+Strategy event. “At the same time, though, I do think there has been a propelling forward in terms of moving away from a silo- based approach.” In April, Kramer launched Nexus Insights to facilitate discussion and debate on what person-centered senior care should look like to “rethink the aging industry.” Working across the continuum of care to help break down those silos is a start. Doing so also encourages value-based care, according to Kramer. Creating a home-based care environment that involves risk, where agencies are willing to bet on themselves and what they can do for patients, will help reshape the landscape. “Part of what we see happening … is that we’re moving from a post-acute focus,” Kramer said. Now, a pre-acute mindset is taking hold, which home-based care insiders have been touting in the past year. But Kramer prefers the term “peri-acute.” “Peri-acute means we’re putting a moat around the acute care hospital,” Kramer said. “And your goal as a health provider, and particularly as one taking risk for the health care dollar spend for that individual, is to do everything you can to keep that plan member, that patient, that resident from having to cross that moat.” Some of the provisions that the Centers for Medicare & Medicaid Services (CMS) has made during the public health emergency have played a hand in advancing the way home-based care is delivered. Additionally, the Patient-Driven Groupings Model (PDGM) has moved the industry in the right way, despite it’s warts, Kramer believes. If there is an incentive for home-based care providers to prevent those hospital admissions, which most already hone in on, the system will be more cost-effective and healthy for everyone. “I think those that are most willing to break down silos are those that have the most incentive to do so,” Kramer said. “And the ones who have the most incentive are those that are holding some degree of the risk for the dollar spent for that individual.” That would include insurance plans, Medicare Advantage (MA) plans, Medicare, Medicaid, LTSS plans, physician groups and others. But it’s also about those who partner with them — and that’s where home health and home care providers come in. If value is prioritized, home health and home care providers will undoubtedly be more valued as well. As long as they can prove their worth. Home-based care providers stepping in Family & Nursing Care, a home care company based in Silver Spring, Maryland, believes it can prove its worth. It has before. Its census has been hurt since COVID-19 began, but it’s hoping its innovative partnerships — and the value they provide — can help bring it back. “I think everybody’s hurting right now,” Mitch Markowitz, the VP of business development at Family & Nursing Care, said at Capital+Strategy. “I’m just so sorry that there are a lot of clients, a lot of family members who are taking chances with their loved ones, and they’re not getting the help that they need.” Family & Nursing Care has partnerships with assisted living and senior living facilities, as well as hospitals. Kramer believes the hospitals are the furthest behind when it comes to value-based, integrated care. But they are still the center of the U.S. health care system. “Hospitals have been forced to face the fact that people don’t want to go there,” Kramer said. “They want to do everything they can to avoid it, which makes the hospital more seriously consider partnerships to deliver care out into the community and not always have a model that starts with an admission.” For Family & Nursing Care, that means it has to show hospitals the way. “There’s got to be something in it for the hospitals in order for them to make those partnerships worth it,” Markowitz said. In Maryland, unlike the majority of the states, hospitals are also incentivized to keep patients at home. Home care and home health companies can help them do that. “We’re helping facilitate these conversations in a different way than we ever had before,” Markowitz said. “And that’s probably what’s helping us work with these different types of providers.” COVID-19 has, as Kramer put it, “propelled us into our future faster.” As care becomes more integrated and value takes hold over volume, it will create massive tailwinds for the home care and home health providers who are able to make strategic partnerships and prove what they can do to keep health risks and costs down. “Those partnerships, to me, are absolutely key,” Kramer said. “But none of this is possible if you can’t communicate the data about the individual quickly. That’s what one of the silver linings of COVID has been — it has forced us to enter the 21st-century world of digitization.” Companies featured in this article: Family & Nursing Care, National Investment Center for Seniors Housing & Care, Nexus Insights Andrew Donlan Before becoming a reporter for HHCN, Andrew received journalism degrees from both University of Iowa and Northwestern University. The former, believe it or not, was more fun than the latter. Vaccination Campaign at Nursing Homes Faces Obstacles and Confusion
In coming days, squads of CVS and Walgreens employees, clad in protective gear and carrying small coolers, will begin to arrive at tens of thousands of nursing homes and assisted-living facilities to vaccinate staff and residents against the coronavirus. Related: After 110K Virus Deaths, Nursing Homes Face Vaccine Fears Related: Trump Administration Pushing Delay in Nursing Home Vaccinations SUBSCRIBE FOR $2/WEEKLOG IN THE UPSHOT| ADVERTISEMENT SECTIONSSEARCHSKIP TO CONTENTSKIP TO SITE INDEXSUBSCRIBE FOR $2/WEEKLOG INTHE UPSHOT|Surprise Medical Bills Cost Americans Millions. Congress Finally Banned Most of Them. 937ADVERTISEMENT Continue reading the main story Surprise Medical Bills Cost Americans Millions. Congress Finally Banned Most of Them.Efforts to solve the common consumer problem had been stalled by lobbying pressure and legislative squabbles. 937Sarah KliffMargot Sanger-KatzBy Sarah Kliff and Margot Sanger-KatzPublished Dec. 20, 2020Updated Dec. 22, 2020 ImageSenator Lamar Alexander this month. He has been an advocate of measures to end surprise billing.Senator Lamar Alexander this month. He has been an advocate of measures to end surprise billing.Credit...Anna Moneymaker for The New York TimesAfter years of being stymied by well-funded interests, Congress has agreed to ban one of the most costly and exasperating practices in medicine: surprise medical bills. Surprise bills happen when an out-of-network provider is unexpectedly involved in a patient’s care. Patients go to a hospital that accepts their insurance, for example, but get treated there by an emergency room physician who doesn’t. Such doctors often bill those patients for large fees, far higher than what health plans typically pay. Language included in the $900 billion spending deal that passed both chambers Monday will make those bills illegal. Instead of charging patients, health providers will now have to work with insurers to settle on a fair price. The new changes will take effect in 2022, and will apply to doctors, hospitals and air ambulances, though not ground ambulances. Academic researchers have found that millions of Americans receive these types of surprise bills each year, with as many as one in five emergency room visits resulting in such a charge. The bills most commonly come from health providers that patients are not able to select, such as emergency room physicians, anesthesiologists and ambulances. The average surprise charge for an emergency room visit is just above $600, but patients have received bills larger than $100,000 from out-of-network providers they did not select. ADVERTISEMENT Continue reading the main storySome private-equity firms have turned this kind of billing into a robust business model, buying emergency room doctor groups and moving the providers out of network so they could bill larger fees. Unlock more free articles.Create an account or log inAmong the major consumer problems in the fiendishly complex health system, surprise billing was the rare Washington issue that both parties could get behind. Health committee leaders have been engaged on the issue for years, as has the White House. President-elect Joe Biden included the proposal in his campaign health care agenda. It had the backing of many prominent and powerful legislators, including Senator Lamar Alexander, Republican of Tennessee and the retiring chairman of the Senate health committee. A survey published Friday by the Kaiser Family Foundation found that 80 percent of adults want the practice banned. More than a dozen states, including Texas and California, have passed bans of their own on surprise billing. Even so, the issue struggled to move through Congress as each policy proposal faced an outcry from some faction of the health care industry. “There were a lot of things working in the legislation’s favor — it’s a relatively targeted problem, it resonates very well with voters, and it’s not a hyperpartisan issue among voters or Congress — and it was still tough,” said Benedic Ippolito, a resident scholar at the American Enterprise Institute, who helped explain the issue to lawmakers early in the process. “It has almost everything going for it, and yet it was still this complete slog.” ADVERTISEMENT Continue reading the main storyHospitals and doctors, who tend to benefit from the current system, fought to defeat solutions that would lower their pay. Insurance companies and large employer groups, on the other hand, have wanted a stronger ability to negotiate lower payments to the types of medical providers who can currently send patients surprise bills. PAUL KRUGMAN: A deeper look at what’s on the mind of Paul Krugman, a world-class economist and opinion columnist.Sign UpLegislation nearly passed last December, but was scuttled at the 11th hour after health providers lobbied aggressively against the deal. Private-equity firms, which own many of the medical providers that deliver surprise bills, poured tens of millions into advertisements opposing the plan. Committee chairs squabbled over jurisdictional issues and postponed the issue. This year, many of the same legislators behind last year’s failed effort tried again, softening several provisions that had been most objectionable to influential doctor and hospital lobbies. The current version will probably not do as much to lower health care spending as the previous version, but will still protect patients. After years of defeats, consumer advocacy groups cheered the new legislation. “This was a real victory for American people against moneyed interests,” said Frederick Isasi, executive director of Families USA. “This really was about Congress recognizing in a bipartisan way the obscenity of families who were paying insurance still having financial bombs going off.” The final compromise requires insurers and medical providers who cannot agree on a payment rate to use an outside arbiter to decide. The arbiter would determine a fair amount based, in part, on what other doctors and hospitals are typically paid for similar services. Patients could be charged the kind of cost sharing they would pay for in-network services, but nothing more. This type of policy is generally seen as more advantageous to health care providers than the other proposal Congress considered, which would have minimized the role of arbiters and instead set benchmark reimbursement rates. Several states have set up their own arbitration systems, and have found that most price disputes are negotiated before an arbiter is involved. “If this bill will force them to come to the table and negotiate a solution, it will be a definite win for everybody,” said Christopher Garmon, an assistant professor of health administration at the University of Missouri, Kansas City, who has measured the scope of the problem. ADVERTISEMENT Continue reading the main storyThe new law will bar air ambulances from giving patients surprise bills. These bills are infrequent but, when they do happen, tend to be very large. This summer, a Pennsylvania coronavirus patient received a surprise air ambulance bill that was over $52,000 for a flight between two hospitals that happened while she was unconscious. States that ban surprise bills have been prevented from tackling these cases because federal law bars them from regulating air transit fees. Ground ambulances, which generate a significant number of surprise bills, are excluded from the new law. The Congressional Budget Office found that an earlier version of the plan would cause small reductions to affected providers including emergency room doctors and anesthesiologists. This would happen to providers that both do and do not send surprise bills, because taking away the option would reduce their leverage in negotiating contracts with health insurers. Health insurers tend to be disappointed with the new legislation, while hospitals and doctors have offered a more mixed response. Some have cited the coronavirus pandemic as a reason to delay new rules. The American Medical Association sent a letter to congressional leaders on Tuesday saying it was “deeply concerned” about the possibility of lower reimbursement rates, “especially in light of the significant financial pressures practices have faced in the last 10 months.” TeamHealth, a large private-equity-owned physician staffing firm that has previously engaged in surprise billing, called the agreement “a significant improvement over the catastrophic proposals advanced by major insurance companies over the past two years.” The American Hospital Association, the country’s largest hospital group, and the Federation of American Hospitals, which represents private hospitals, supported the final bill. ADVERTISEMENT Continue reading the main storyAccess more of The Times by creating a free account or logging in.Access more for free.EXPAND Create a free account or log in to access more of The Times. CONTINUESite IndexSite Information Navigation© 2021 The New York Times CompanyNYTCoContact UsWork with usAdvertiseT Brand StudioYour Ad ChoicesPrivacy PolicyTerms of ServiceTerms of SaleSite MapHelpSubscriptionsSurprise Medical Bills Cost Americans Millions. Congress Finally Banned Most of Them. Efforts to solve the common consumer problem had been stalled by lobbying pressure and legislative squabbles. By Sarah Kliff and Margot Sanger-Katz
Senator Lamar Alexander this month. He has been an advocate of measures to end surprise billing.Anna Moneymaker for The New York Times After years of being stymied by well-funded interests, Congress has agreed to ban one of the most costly and exasperating practices in medicine: surprise medical bills. Surprise bills happen when an out-of-network provider is unexpectedly involved in a patient’s care. Patients go to a hospital that accepts their insurance, for example, but get treated there by an emergency room physician who doesn’t. Such doctors often bill those patients for large fees, far higher than what health plans typically pay. Language included in the $900 billion spending deal that passed both chambers Monday will make those bills illegal. Instead of charging patients, health providers will now have to work with insurers to settle on a fair price. The new changes will take effect in 2022, and will apply to doctors, hospitals and air ambulances, though not ground ambulances. Academic researchers have found that millions of Americans receive these types of surprise bills each year, with as many as one in five emergency room visits resulting in such a charge. The bills most commonly come from health providers that patients are not able to select, such as emergency room physicians, anesthesiologists and ambulances. The average surprise charge for an emergency room visit is just above $600, but patients have received bills larger than $100,000 from out-of-network providers they did not select. ADVERTISEMENT Some private-equity firms have turned this kind of billing into a robust business model, buying emergency room doctor groups and moving the providers out of network so they could bill larger fees.
Among the major consumer problems in the fiendishly complex health system, surprise billing was the rare Washington issue that both parties could get behind. Health committee leaders have been engaged on the issue for years, as has the White House. President-elect Joe Biden included the proposal in his campaign health care agenda. It had the backing of many prominent and powerful legislators, including Senator Lamar Alexander, Republican of Tennessee and the retiring chairman of the Senate health committee. A survey published Friday by the Kaiser Family Foundation found that 80 percent of adults want the practice banned. More than a dozen states, including Texas and California, have passed bans of their own on surprise billing. Even so, the issue struggled to move through Congress as each policy proposal faced an outcry from some faction of the health care industry. “There were a lot of things working in the legislation’s favor — it’s a relatively targeted problem, it resonates very well with voters, and it’s not a hyperpartisan issue among voters or Congress — and it was still tough,” said Benedic Ippolito, a resident scholar at the American Enterprise Institute, who helped explain the issue to lawmakers early in the process. “It has almost everything going for it, and yet it was still this complete slog.” ADVERTISEMENT Hospitals and doctors, who tend to benefit from the current system, fought to defeat solutions that would lower their pay. Insurance companies and large employer groups, on the other hand, have wanted a stronger ability to negotiate lower payments to the types of medical providers who can currently send patients surprise bills. PAUL KRUGMAN: A deeper look at what’s on the mind of Paul Krugman, a world-class economist and opinion columnist. Sign Up Legislation nearly passed last December, but was scuttled at the 11th hour after health providers lobbied aggressively against the deal. Private-equity firms, which own many of the medical providers that deliver surprise bills, poured tens of millions into advertisements opposing the plan. Committee chairs squabbled over jurisdictional issues and postponed the issue. This year, many of the same legislators behind last year’s failed effort tried again, softening several provisions that had been most objectionable to influential doctor and hospital lobbies. The current version will probably not do as much to lower health care spending as the previous version, but will still protect patients. After years of defeats, consumer advocacy groups cheered the new legislation. “This was a real victory for American people against moneyed interests,” said Frederick Isasi, executive director of Families USA. “This really was about Congress recognizing in a bipartisan way the obscenity of families who were paying insurance still having financial bombs going off.” The final compromise requires insurers and medical providers who cannot agree on a payment rate to use an outside arbiter to decide. The arbiter would determine a fair amount based, in part, on what other doctors and hospitals are typically paid for similar services. Patients could be charged the kind of cost sharing they would pay for in-network services, but nothing more. This type of policy is generally seen as more advantageous to health care providers than the other proposal Congress considered, which would have minimized the role of arbiters and instead set benchmark reimbursement rates. Several states have set up their own arbitration systems, and have found that most price disputes are negotiated before an arbiter is involved. “If this bill will force them to come to the table and negotiate a solution, it will be a definite win for everybody,” said Christopher Garmon, an assistant professor of health administration at the University of Missouri, Kansas City, who has measured the scope of the problem. ADVERTISEMENT The new law will bar air ambulances from giving patients surprise bills. These bills are infrequent but, when they do happen, tend to be very large. This summer, a Pennsylvania coronavirus patient received a surprise air ambulance bill that was over $52,000 for a flight between two hospitals that happened while she was unconscious. States that ban surprise bills have been prevented from tackling these cases because federal law bars them from regulating air transit fees. Ground ambulances, which generate a significant number of surprise bills, are excluded from the new law. The Congressional Budget Office found that an earlier version of the plan would cause small reductions to affected providers including emergency room doctors and anesthesiologists. This would happen to providers that both do and do not send surprise bills, because taking away the option would reduce their leverage in negotiating contracts with health insurers. Health insurers tend to be disappointed with the new legislation, while hospitals and doctors have offered a more mixed response. Some have cited the coronavirus pandemic as a reason to delay new rules. The American Medical Association sent a letter to congressional leaders on Tuesday saying it was “deeply concerned” about the possibility of lower reimbursement rates, “especially in light of the significant financial pressures practices have faced in the last 10 months.” TeamHealth, a large private-equity-owned physician staffing firm that has previously engaged in surprise billing, called the agreement “a significant improvement over the catastrophic proposals advanced by major insurance companies over the past two years.” The American Hospital Association, the country’s largest hospital group, and the Federation of American Hospitals, which represents private hospitals, supported the final bill. ADVERTISEMENT Access more of The Times by creating a free account or logging in. Access more for free. EXPAND Create a free account or log in to access more of The Times. CONTINUE Site Index Site Information Navigation
SUBSCRIBE FOR $2/WEEKLOG IN THE UPSHOT| ADVERTISEMENT Surprise Medical Bills Cost Americans Millions. Congress Finally Banned Most of Them. Efforts to solve the common consumer problem had been stalled by lobbying pressure and legislative squabbles. By Sarah Kliff and Margot Sanger-Katz
Senator Lamar Alexander this month. He has been an advocate of measures to end surprise billing.Anna Moneymaker for The New York Times After years of being stymied by well-funded interests, Congress has agreed to ban one of the most costly and exasperating practices in medicine: surprise medical bills. Surprise bills happen when an out-of-network provider is unexpectedly involved in a patient’s care. Patients go to a hospital that accepts their insurance, for example, but get treated there by an emergency room physician who doesn’t. Such doctors often bill those patients for large fees, far higher than what health plans typically pay. Language included in the $900 billion spending deal that passed both chambers Monday will make those bills illegal. Instead of charging patients, health providers will now have to work with insurers to settle on a fair price. The new changes will take effect in 2022, and will apply to doctors, hospitals and air ambulances, though not ground ambulances. Academic researchers have found that millions of Americans receive these types of surprise bills each year, with as many as one in five emergency room visits resulting in such a charge. The bills most commonly come from health providers that patients are not able to select, such as emergency room physicians, anesthesiologists and ambulances. The average surprise charge for an emergency room visit is just above $600, but patients have received bills larger than $100,000 from out-of-network providers they did not select. ADVERTISEMENT Some private-equity firms have turned this kind of billing into a robust business model, buying emergency room doctor groups and moving the providers out of network so they could bill larger fees.
Among the major consumer problems in the fiendishly complex health system, surprise billing was the rare Washington issue that both parties could get behind. Health committee leaders have been engaged on the issue for years, as has the White House. President-elect Joe Biden included the proposal in his campaign health care agenda. It had the backing of many prominent and powerful legislators, including Senator Lamar Alexander, Republican of Tennessee and the retiring chairman of the Senate health committee. A survey published Friday by the Kaiser Family Foundation found that 80 percent of adults want the practice banned. More than a dozen states, including Texas and California, have passed bans of their own on surprise billing. Even so, the issue struggled to move through Congress as each policy proposal faced an outcry from some faction of the health care industry. “There were a lot of things working in the legislation’s favor — it’s a relatively targeted problem, it resonates very well with voters, and it’s not a hyperpartisan issue among voters or Congress — and it was still tough,” said Benedic Ippolito, a resident scholar at the American Enterprise Institute, who helped explain the issue to lawmakers early in the process. “It has almost everything going for it, and yet it was still this complete slog.” ADVERTISEMENT Hospitals and doctors, who tend to benefit from the current system, fought to defeat solutions that would lower their pay. Insurance companies and large employer groups, on the other hand, have wanted a stronger ability to negotiate lower payments to the types of medical providers who can currently send patients surprise bills. PAUL KRUGMAN: A deeper look at what’s on the mind of Paul Krugman, a world-class economist and opinion columnist. Sign Up Legislation nearly passed last December, but was scuttled at the 11th hour after health providers lobbied aggressively against the deal. Private-equity firms, which own many of the medical providers that deliver surprise bills, poured tens of millions into advertisements opposing the plan. Committee chairs squabbled over jurisdictional issues and postponed the issue. This year, many of the same legislators behind last year’s failed effort tried again, softening several provisions that had been most objectionable to influential doctor and hospital lobbies. The current version will probably not do as much to lower health care spending as the previous version, but will still protect patients. After years of defeats, consumer advocacy groups cheered the new legislation. “This was a real victory for American people against moneyed interests,” said Frederick Isasi, executive director of Families USA. “This really was about Congress recognizing in a bipartisan way the obscenity of families who were paying insurance still having financial bombs going off.” The final compromise requires insurers and medical providers who cannot agree on a payment rate to use an outside arbiter to decide. The arbiter would determine a fair amount based, in part, on what other doctors and hospitals are typically paid for similar services. Patients could be charged the kind of cost sharing they would pay for in-network services, but nothing more. This type of policy is generally seen as more advantageous to health care providers than the other proposal Congress considered, which would have minimized the role of arbiters and instead set benchmark reimbursement rates. Several states have set up their own arbitration systems, and have found that most price disputes are negotiated before an arbiter is involved. “If this bill will force them to come to the table and negotiate a solution, it will be a definite win for everybody,” said Christopher Garmon, an assistant professor of health administration at the University of Missouri, Kansas City, who has measured the scope of the problem. ADVERTISEMENT The new law will bar air ambulances from giving patients surprise bills. These bills are infrequent but, when they do happen, tend to be very large. This summer, a Pennsylvania coronavirus patient received a surprise air ambulance bill that was over $52,000 for a flight between two hospitals that happened while she was unconscious. States that ban surprise bills have been prevented from tackling these cases because federal law bars them from regulating air transit fees. Ground ambulances, which generate a significant number of surprise bills, are excluded from the new law. The Congressional Budget Office found that an earlier version of the plan would cause small reductions to affected providers including emergency room doctors and anesthesiologists. This would happen to providers that both do and do not send surprise bills, because taking away the option would reduce their leverage in negotiating contracts with health insurers. Health insurers tend to be disappointed with the new legislation, while hospitals and doctors have offered a more mixed response. Some have cited the coronavirus pandemic as a reason to delay new rules. The American Medical Association sent a letter to congressional leaders on Tuesday saying it was “deeply concerned” about the possibility of lower reimbursement rates, “especially in light of the significant financial pressures practices have faced in the last 10 months.” TeamHealth, a large private-equity-owned physician staffing firm that has previously engaged in surprise billing, called the agreement “a significant improvement over the catastrophic proposals advanced by major insurance companies over the past two years.” The American Hospital Association, the country’s largest hospital group, and the Federation of American Hospitals, which represents private hospitals, supported the final bill. ADVERTISEMENT Access more of The Times by creating a free account or logging in. Access more for free. EXPAND Create a free account or log in to access more of The Times. CONTINUE Site Index Site Information Navigation
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AuthorJeff Sodoma, MPA, Esq. is a lawyer based in Virginia Beach, Virginia Blog!Hello, there! Welcome to my blog. I will use this blog as a platform for my writing. I will write about topics in the legal world, certainly, as well as everything else under the sun, because I have many interests (and viewpoints). All views expressed in this blog, unless otherwise noted, are mine alone. One of my interests is music--my wife believes that I should go on "Beat Shazam" because I know so many songs--and I will be, from time to time, analyzing song lyrics and how they relate to the legal world.
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