UPDATE: June 19, 2019: The Senate health committee will vote on an updated draft of the Lower Health Care Costs Act on June 26. The bill would hold patients harmless for surprise bills by only requiring them to pay the in-network cost-sharing amount for any out-of-network services. Plans will pay providers the local median amount for that geographic area, an approach favored by insurers but opposed by providers.
In response, the American Hospital Association called the benchmark payment rate "arbitrary, government-dictated reimbursement" and "unworkable."
Dive Brief:
- Legislators didn't appear to come closer to a concrete solution for surprise billing payment methodology in a Senate committee meeting Tuesday on a slate of proposals to lower healthcare costs. The HELP committee heard input on a bipartisan discussion draft that includes a proposal to ban out-of-network medical bills with three potential options for payment resolution.
- Chairman Lamar Alexander, R-Tenn., seemed to support a guarantee that any care received at an in-network facility would be covered by a patient's insurer, a measure also backed by some industry panelists but opposed by the provider lobby.
- Sens. Maggie Hassan, D-N.H., and Bill Cassidy, R-La., came out against using only a benchmark payment rate, in line with hospital and health system interests. The two have their own proposal that would tie out-of-network payment to in-network median rates initially before a provider could request arbitration.
Dive Insight:
Panelists cheered the pro-competitive aspects of the bill package, like establishing of a national all-payer claims database to increase transparency, restricting pharmacy benefit manager spread pricing, banning gag clauses in negotiations between payers and providers and provisions to bring generic medications to market more quickly.
"Whenever possible, we should rely on competition, not regulation," Sean Cavanaugh, chief administrative and performance officer for Aledade, which works with primary care ACOs, said. But U.S. healthcare has a "number of market failures" that prevents it from functioning correctly, he said.
Efforts to tackle surprise billing receive strong support from both sides of the aisle. The act being debated Tuesday ensures no one will pay more for their care than their in-network cost-sharing amount in a surprise billing situation. But the payment mechanism isn't as clear-cut.
Providers support third-party arbitration while payers and employers generally advocate for rate setting. The Senate bill includes a third option: an in-network guarantee. According to Ben Ippolito, a research fellow at the American Enterprise Institute, the in-network guarantee is the "only option that will address the market failure that gives rise to surprise medical bills" by stopping them before they occur.
While some lawmakers spoke in support of rate setting, Sen. Mitt Romney, R-Utah, said arbitration could inject unnecessary administrative burden into an already loaded system. Romney said he's "concerned at first blush that arbitration is going to be highly complex."
The Senate proposal is far from the only plan aimed at ending surprise billing. House Energy and Commerce Committee Chairman Frank Pallone, D-N.J., has put forward a draft that sets a payment rate at the median rate for in-network services in that particular location.
The debate over surprise billing garnered the most attention Tuesday, but larger issues loomed. The package of draft bills also pushes for more price transparency on the part of providers and payers. The White House is reportedly also considering taking action to mandate publishing negotiated rates between the parties and hasn't backed down from threats to repeal the ACA.
Although the committee was able to largely avoid partisan squabbling, tensions did erupt along party lines when it came to Trump administration dismantling of key provisions of the ACA in an ongoing effort Sen. Bob Casey, D-Pa., said could "only be described as sabotage."
HELP ranking member Patty Murray, D-Wash., recited a litany of Trump proposals chipping away at key ACA provisions, including the Texas lawsuit seeking to declare the law unconstitutional, expansion of short-term and association health plans and slashing funding for navigators.
"To put a finer point on it, when your car is totaled, you can't fix the windshield and expect to start driving," Murray said.
But Alexander deflected, noting the fight over the ACA was not the committee's purpose Tuesday. "The cost of health insurance remains way too expensive and I'm sure the debate about how to fix that will continue," he said. "But that is not this discussion."