- The Democratic and Republican leadership of three House committees and one Senate committee said on Friday they agreed on a method to resolve surprise medical bills, increasing the chances a fix is included in year-end funding legislation Congress is hustling to finalize this week.
- Under the proposal, disagreements between health insurers and providers on how much to pay for surprise medical bills would be settled by an independent arbiter. The approach is favored by providers, while insurers had advocated for tying payments to median in-network rates, a strategy called benchmarking.
- Passage of the deal is by no means assured, however, and payers are continuing to lobby Congress to tweak it.
Surprise medical bills occur when a patient receives care at an out-of-network facility, or from an out-of-network provider at an in-network facility. Tackling the exorbitant bills was a key health priority for Congress last year, but was pushed to the legislative wayside as Washington's attention was held hostage by the COVID-19 pandemic this year.
Legislators dithered between a handful of different strategies to stop surprise billing in multiple pieces of legislation last year. Providers generally prefer an independent arbitration process to resolve disputed bills, while insurers prefer tying the amount of the bills to in-network rates, an approach doctors and physician staffing companies, many backed by deep-pocketed private equity groups, characterized as price fixing, pouring millions into ads opposing it.
Friday's agreement would hold patients harmless for surprise billing for all out-of-network emergency services and air ambulances, along with much out-of-network care provided at in-network facilities. Patients would only be responsible for in-network cost-sharing, including deductibles, in emergencies and other situations when they can't choose their own provider.
Patients can still receive out-of-network care at an in-network hospital if the patient consents ahead of time.
If a payer or provider contests a bill, they can elect to go to an independent arbitration process. In concessions to insurers and as guardrails meant to curb potential fraud, after a bill goes through arbitration, the party that challenged the bill can't bring the dispute for the same item or service again for 90 days.
Additionally, the arbiter needs to take the median in-network amount for an item or service into account when deliberating whether to accept the insurer or provider offer — and they're prohibited from considering billed charges, curtailing fears providers will increase their prices to skew arbitration in their favor.
Unlike other proposals, though, Friday's fix does not include a minimum payment threshold to enter the arbitration process.
Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy, said in a Friday tweet thread that the legislation is a "clear improvement over the status quo," but isn't perfect.
Arbitration can be clunky and add administrative burden. Additionally, arbiters are instructed to consider previously contracted rates between payers and providers, likely benefiting whichever party leveraged the threat of surprise billing to get higher contracted rates, such as PE-backed physician networks, Adler said.
Arbiters are also instructed to consider relative market shares of the provider and payer, the training and experience of the provider and complexity of the healthcare services provided.
Payers immediately spoke out against the bill's dispute resolution process.
"While we continue to analyze the bill in all its complexities, we continue to believe strongly that any real solution must be clear and straightforward for consumers, and must protect patients by relying on fair, market-based prices based on locally negotiated rates — without loopholes," Matt Eyles, CEO of insurer lobby America's Health Insurance Plans, said in a statement.
Though hospital lobby American Hospital Association applauded the choice of arbitration, the group on Sunday called for tweaks. AHA doesn't want arbiters to consider public payer reimbursement rates, which pay providers less than privately negotiated ones. The group also wants the initial payment made by an insurer for out-of-network services to be considered their first offer for arbitration, if disputed.
The bill would also require providers to give patients "good faith estimates" for the price of scheduled care. AHA said providers should only have to provide an estimate upon patient request, not for all scheduled care.
The deal was agreed to by Chairman Frank Pallone, D-N.J., and Ranking Member Greg Walden, R-Ore., of the House Energy and Commerce Committee; Chairman Richard Neal, D-Mass., and Ranking Member Kevin Brady, R-Texas, of the House Ways and Means Committee; Chairman Bobby Scott, D-Va., and Ranking Member Virginia Foxx, R-N.C., of the House Education and Labor Committee; and Chairman Lamar Alexander, R-Tenn., and Ranking Member Patty Murray, D-Wash., of the Senate Health, Education, Labor and Pensions Committee.
The bipartisan group said Friday the proposal will save about $18 billion, and they're working to include it in year-end spending legislation.
However, Congress faces a tight timetable and ongoing gridlock over additional COVID-19 relief. The spending package must be approved by Dec. 18 to avoid a government shutdown.
The deal, however, concludes a yearlong stalemate between the powerful House and Senate committees. Energy and Commerce and HELP agreed last year to use a benchmark rate to resolve surprise bills, with an arbitration backstop for large enough bills. Ways and Means opposed that idea, punting a surprise billing fix to 2020.
The legislation, if passed, would not supersede existing state laws prohibiting surprise billing for their fully-insured population. That could result in bureaucratic complexities if states elect to keep their patchwork laws, Adler said, with two paths for surprise billing disputes: one (state) if a patient is fully-insured and another (federal) if they're self-insured.
Currently, 32 states have enacted laws meant to stop balance billing, according to The Commonwealth Fund.