Two professional organizations representing emergency doctors warn that a new federal rule could lead to higher out-of-pocket costs for consumers when they need emergency care outside their health plan’s network of providers. But consumer advocates and health policy experts say the groups’ proposed solution doesn’t adequately protect consumers.

Under the health law, plans can’t generally charge consumers higher copayments or coinsurance when they visit an emergency department that’s not in their network. So if the plan charges a flat copayment of $500, for example, or coinsurance totaling 30 percent of the cost of services for an emergency department visit at an in-network hospital, it can’t charge consumers more than that rate if they get emergency services at an out-of-network facility. The only plans that are exempt from this provision are those that have grandfathered status under the health law.

However, the law doesn’t prohibit doctors and hospitals from “balance billing” consumers for out-of-network emergency care if their insurer doesn’t pay the full amount charged. That practice is what really harms consumers, say advocates.

“Our main interest is getting the consumers out of the middle,” says Chuck Bell, programs director at Consumers Union, a consumer advocacy group that has been involved in state efforts to prohibit balance billing. “Even if [the federal government] had written the regulation the way [emergency physicians] advocate, we would likely see balance bills going to consumers.”

Emergency services providers say they are in a tough spot because federal law requires them to treat anyone who comes through their doors, whether or not they have insurance or can afford to pay.

Here’s how it works: When health plans contract with physicians to be part of a provider network, the doctors agree to accept a certain amount for their services as payment in full. But if doctors or other providers don’t have a contract with the patient’s insurer, they are not bound to accept only the insurer’s reimbursement and may bill the patient to try to collect any unpaid balance.

The health law doesn’t change that. Rather, it says that insurers must pay a “reasonable amount” before a patient can be billed for the rest. The new federal rule, released in November, defines “reasonable” as the greatest of these three options:

— The median amount negotiated with in-network providers for the emergency service.

— An amount calculated using the same method the plan would generally pay for other out-of-network services.

— The amount paid for the service by Medicare.

The final regulation was not significantly different than the standards spelled out in the interim regulation that was issued in 2010 after the health law passed.

The American College of Emergency Physicians and the Emergency Department Practice Management Association maintain that the regulation’s first two options allow insurers to essentially pay whatever they want because their payment data is proprietary. Medicare reimbursement rates are generally lower than those of private plans.

Without a transparent, objective standard in place, the emergency providers say, insurers will pay them less and emergency providers may in turn try to collect the unpaid balance from consumers, unless they live in one of the dozen or so states that prohibit balance billing by out-of-network providers.

Insurers have already been ratcheting back their payments to emergency physicians for out-of-network services since the interim rule was released, says Dr. Jeffrey Bettinger, chair of ACEP’S task force on alternative payment models. For example, two insurers have reduced out-of-network payments to emergency physicians by $600 million annually, Bettinger says.

The physicians want the payment standard to be “usual and customary charges,” adjusted for geographic variations, using a transparent, independent claims database such as that provided by the nonprofit group Fair Health.

Insurers, however, say providers’ charges are too high and the process by which they are set is often opaque. A study last fall by America’s Health Insurance Plans, a trade group, used Fair Health data to examine the charges billed by out-of-network providers in 2013 and 2014 and compared them to the average fees paid by Medicare in 2014. Analyzing 1.16 million emergency department visits of high severity, the insurers’ group found the average Medicare payment was $176, while the average out-of-network charge was significantly higher, $971.

“It comes down to the prices emergency doctors are charging, which are often far higher than what Medicare pays,” said Clare Krusing, an AHIP spokeswoman. “So the question really is, ‘Are these fair prices in the first place?’”

Krusing says insurers aren’t suggesting that Medicare be used as the benchmark, but that average charges for many services are excessive.

Consumer advocates, such as Bell, and some researchers who have studied consumers’ billing issues, say the government could take a more consumer-friendly approach by eliminating balance billing for emergency care altogether. New York did that with a law that took effect in April. Under that law, insured consumers generally can’t be billed for out-of-network emergency care. (The law doesn’t apply to self-funded companies that pay their employees’ claims directly.) The law also sets up a dispute resolution process for insurers and providers to determine payments.

“It’s promising what New York did, because they extract the consumer so they can’t be used as leverage between the providers and insurers,” says Kevin Lucia, a senior research fellow at Georgetown University’s Center on Health Insurance Reforms, who co-authored a study examining state efforts to protect consumers from balance billing.

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