Lawmakers Go Back to the Drawing Board on Surprise Medical Bills
Under election-year pressure to provide relief to constituents angered by surprise medical bills, lawmakers in both parties are working on proposals that, at the very least, will show they are taking the problem seriously.
The legislative vehicle of choice is a measure for funding Medicare and Medicaid programs set to expire at the end of May. Three draft bills are competing to be attached to the Medicare and Medicaid legislation. With just three months remaining to come up with language acceptable to the Democrat-controlled House, Republican-controlled Senate, and the Trump White House, lawmakers have their work cut out for them. The three drafts pit the competing interests of hospitals, patients, and insurance providers against one another, further complicating the task of reaching a compromise.
In the House, two surprise billing bills cleared committees of jurisdiction in mid-February; one passed the Ways and Means Committee, and the other was approved by the Education and Labor Committee. The third draft in play was adopted by the House Energy and Commerce Committee and the Senate Health, Education, Labor, and Pensions (HELP) Committee last year but failed to make it into the year-end budget deal.
The drafts have four elements in common: each address arbitration, rate-setting, transparency, and medical emergencies.
House Ways and Means Committee Draft
The House Ways and Means Committee draft would use Major League Baseball-style arbitration to resolve disputes over out-of-network bills. Either party could initiate a 30-day negotiation, followed (if necessary) by a 30-day mediation with an independent third party.
There would be no set rate for out-of-network services, but during dispute resolution the third-party mediator would consider the median contracted rate specific to the plan, as well as rates for similar providers, services, and geographic areas. Under the draft, patients would receive a “true and honest estimate” before services are rendered that would include cost, what providers will deliver the service and whether providers are in-network.
Additionally, ambulance companies would have to report cost data to the U.S. Department of Health and Human Services, and insurance companies would have to report data on claims for the services. Providers would be prohibited from sending a bill to patients receiving emergency medical services from a non-participating provider or facility.
House Education and Labor Committee Draft
The Education and Labor Committee draft blends set rates with arbitration and creates a benchmark rate for care that would cost less than $750.
The rate would be set at the median in-network price for a service in a given geographic region. Air ambulance disputes below $25,000 would also have a benchmark rate applied to them. In disputes over services costing more than $750 or air ambulances costing more than $25,000, payers and providers could enter into an independent dispute resolution process, which would determine the final payment for service.
As for transparency, the draft would prohibit certain out-of-network providers from presenting a bill unless a notice is sent 72 hours in advance of the elective out-of-network procedure and the patient signs a consent form.
House Energy and Commerce/Senate HELP Committees Draft
Like the House Education and Labor draft, the joint proposal between the HELP Committee and the House Energy and Commerce Committee, known as the Lower Health Care Costs Act, provides for arbitration in service disputes involving more than $750 and in air ambulance disputes of more than $25,000. Criteria the arbiter must consider include training and experience of a provider, market share of both payer and provider, and acuity of the patient.
The party initiating the arbitration would not be allowed to bring the same party to arbitration for the same service for 90 days. It would require insurers to pay the median in-network rate in a given region for services costing less than $750.
Similar to the House Education and Labor draft, the proposal would prohibit certain out-of-network providers from sending a bill unless the provider gives a 72-hour notice of network status before the patient receives out-of-network care and the patient provides consent. Providers would also be required to publish certain in-network and out-of-network cost information, including deductibles on members’ insurance cards. Patients would only be allowed to pay the in-network amounts for out-of-network care.
The Political Prospects
Even though time for a compromise is rapidly running out, and the political atmosphere for bipartisanship is highly unfavorable, elements for a deal could be found in the similarities between the House Education and Labor draft and the House Energy and Commerce/Senate HELP draft.
In a February 12 tweet, President Trump underscored his support for bipartisan surprise billing legislation. “Ending surprise medical billing moving ahead in Congress!” Mr. Trump tweeted. “Thanks to Ways & Means and Education/Labor Committees for your work on Bills (sic) to protect patients and end medical bill ripoffs! Work with Energy & Commerce, HELP committees to send BIPARTISAN bill to my desk.”
A Better Solution
Mandating truth in advertising and requiring providers to give good faith estimates of costs is a better solution to solving the surprise billing dilemma, say Doug Badger and Brian Blase, economists at the Galen Institute.
In their December 2019 report, A Targeted Approach to Surprise Medical Billing, Badger and Blase say Congress should avoid arbitration as a solution, “which has a host of problems, including imposing contractual terms on parties that have not entered into a contract.”
Rate-setting, the authors state, should be reserved for emergency care.
“Patients should be protected from balance billing in this situation, and Congress should apply existing federal regulations to determine the rate that insurers compensate providers,” the authors wrote.
Bonner R. Cohen, Ph.D., (firstname.lastname@example.org) is a senior fellow at the National Center for Public Policy Research and a senior policy analyst with the Committee for a Constructive Tomorrow.
Badger, Doug and Blase, Brian, “A Targeted Approach to Surprise Medical Billing,” The Galen Institute, December 2019: https://www.heartland.org/publications-resources/publications/a-targeted-approach-to-surprise-medical-billing