While President Donald Trump prods Congress to limit surprise billing, at least three states are debating legislation to ban the practice.
Colorado is expected to become the latest on Tuesday to join a handful of other states with laws on the books taking aim at the policy, where a patient gets hit with an unexpected medical bill, usually from an out-of-network provider at an in-network facility.
Senior administration officials last week laid out some core aspects they would like to see in a federal bill including a solution that works across all insurance markets and encompasses emergency and elective services. They did not support an arbitration process, which payers also oppose. Provider groups, for their part, have said they would not be behind a fixed rate setting.
The chairman and ranking member of the Senate Energy & Commerce Committee responded they were committed to work on bipartisan legislation to end the practice.
But no one is expecting Washington to act fast.
Current state laws vary in scale and effectiveness. Federal legislation would be more effective, as it would protect the millions who receive self-funded coverage through their employer. But the political climate in Washington, where even historically bipartisan efforts move slowly at best, has left states to step in and do what they can.
"State action is certainly better than nothing," Thomas Waldrop, policy analyst for the Center for American Progress, told Healthcare Dive.
The Colorado General Assembly passed a bill earlier this month that prohibits surprise billing and sets a reimbursement rate based on either commercial claims data or the insurers' median in-network rate for the service. Gov. Jared Polis, a Democrat, is expected to sign the bill Tuesday, a spokesman told Healthcare Dive.
A surprise billing law is also on the governor’s desk In Washington. It calls for a "commercial reasonable amount" to be paid to out-of-network providers and establishes arbitration if the parties cannot agree on a rate through negotiation.
In Texas, a bill has passed the Senate and is currently making its way through the House. It requires an arbitration process for payments that do not include patient involvement. Previous legislation in the state required people receiving surprise bills to request remediation.
The American Hospital Association says it supports a surprise billing ban but opposes bundling of emergency services or rate setting. Most legislation, however, includes set rates, which Kevin Lucia, a policy analyst for The Commonwealth Fund, told Healthcare Dive is needed to really tackle the issue.
Lucia has studied state surprise billing laws, and while he is still evaluating these new state bills, they appear to have the elements necessary to be deemed "comprehensive." Legislation receives that designation when it includes protection for emergency and non-emergency services, has a payment standard and/or dispute resolution process and has a provision ensuring patients are not responsible for any costs beyond in-network charges.
Importance of state laws
The Employee Retirement Income Security Act of 1974 limits the effectiveness of state surprise billing legislation because state laws can't apply to employer self-funded plans, which cover the majority of Americans. Still, the laws can serve a few key purposes.
Several of the bills proposed in Congress defer to state laws on issues like rate setting or arbitration. So even if Washington passes a ban on surprise billing, states that want to set their own plans can count on using their own laws going forward.
Also, by passing state-level bans, officials can set expectations of price transparency for payers and providers — a framework to potentially build upon in further regulation, Christina Cousart, senior policy associate at the National Academy for State Health Policy, told Healthcare Dive.
"States have a lot of authority over providers ... just making sure the providers have posted information and are being as informative as possible when consumers are coming into their facilities," she said.
Surprise billing isn't a new phenomenon, but it's garnering more attention lately and spurring the lawmaker action. One reason for this is simply that more people have insurance, as the provisions of the Affordable Care Act have ticked coverage numbers upward.
"I think generally we've seen the insured rate go up a bit over the past couple of years, so as more people have insurance more people are going to have interactions with it," Waldrop said.
The issue has also gotten more news coverage, as multiple publications have reported on egregious stories and brought attention to the underlying causes — and potential consequences — of an enormous and unexpected charge.
It's easy to empathize with these patents' horror stories, Lucia said. "I think it's an issue that really hurts consumers and it seems like it hurts them in ways they have no control over," he said.
In the absence of federal regulation, states will continue to receive complaints from their residents, and local regulators may feel an obligation to attempt to provide whatever protection they can, Lucia said.
There's public support behind legislation to ban surprise billing. A recent Kaiser Family Foundation poll found that half of respondents said it should be a "top priority" for Congress. Another 36% said it was "important" but not a top priority.