In a letter to President Trump, the Association of American Physicians and Surgeons (AAPS) writes that reports on “surprise billing” make an effective emotional appeal, but legislation is actually being pushed by insurers to protect themselves against having to pay a fair market price for services patients need.

The reason patients get unexpected bills from out-of-network physicians is that insurers have increasingly narrow networks. Hospitals can’t fill their “on-call” schedule with in-network physicians. The plan may exclude physicians who provide costly services, such as cancer care, or physicians who are unwilling to sign the take-it-or-leave-it managed care contract.

Physicians may decline to participate “because the allowed fee does not even cover costs, because the administrative burdens are costly and onerous, and/or because the plan imposes constraints that prevent physicians from offering the best care,” the letter states.

“To stay in business and offer quality care, physicians stay out of network. If plans are allowed to dictate prices and government forbids balance billing, plans will be dictating what services patients will be able to receive.”

AAPS points out: “Price controls always cause shortages. Just as rent control causes a shortage of apartments, prohibiting free market billing for medical care causes physicians to retire early, work fewer hours, or provide less charity care. This leaves patients worse off.”

Most outrageous bills are from hospitals billing patients at chargemaster rates. These fake bills, which are rarely paid, inflate the losses that hospitals claim in order to preserve their tax exemption or to increase their Medicaid DSH (disproportionate share hospital) payments.

The answer to inflated prices is price transparency and free-market competition, not more price controls that protect the profitability of managed-care cartels, AAPS states.

The Association of American Physicians and Surgeons (AAPS) is a national organization representing physicians in all specialties, founded in 1943. Its motto is “omnia pro aegroto,” or “all for the patient.”