- A bipartisan group of senators has drafted a bill that would put an end to surprise billing by banning the practice of balance billing and forcing insurers to pay additional charges for patients who receive emergency services from out-of-network providers.
- The legislation would require insurers to pay out-of-network providers at 125% of the average in-network rate while limiting patient liability to in-network costs.
- Hospitals have yet to comment on the draft, but may wait until it is formally introduced. Sen. Bill Cassidy, R-La., a sponsor of the bill, told The Hill that lawmakers are planning on refining the legislation before introducing it at the beginning of Congress' next session in January.
This move follows several high-profile reports of patients leaving emergency rooms with outsized bills for standard procedures, often discovering they've been treated by an out-of-network provider in an in-network facility. The draft bill gets to the heart of that issue directly by legally prohibiting patients from being charged more for receiving care from out-of-network doctors at an in-network hospital.
It's a common practice. According to a recent survey from research group NORC at the University of Chicago, 57% of U.S. adults have been surprised by a medical bill they thought would have been covered by insurance.
This is not the first legislative attempt to stifle the practice of surprise billing. Several states, most recently New Jersey, have similar laws in place that address the issue of overcharging patients who see out-of-network providers at in-network facilities. Laws in Connecticut and California, like this bipartisan draft bill in the Senate, are comprehensive in that they require payers and providers to agree to terms on their billing disputes without involving the patient — or the patient's pocketbook.
Loren Adler, associate director at USC-Brookings Schaeffer Initiative for Health Policy, told Healthcare Dive that one of the biggest differentiators in state legislation has been within provisions that require insurers to make some amount of payment to providers. In states like New York and New Jersey, that payment has been disputed in an arbitration process. In California and Connecticut, the amount is mandated by the state. This bill follows the lead set by the latter, but at an even higher rate for insurers.
"This is 125% of the average allowed amounts in that region for that type of service. More or less, it's like average in-network rates," Adler said. "It's easiest to think of it as the average in-network rate with a 25% add-on."
That type of add-on has not been seen in state legislation.
In the House, New Mexico Rep. Michelle Lujan Grisham in 2017 introduced a bill called the Fair Billing Act that prohibits patients from paying more than in-network cost-sharing amounts and only allows providers to charge higher rates if they obtain written consent from the patient at least three days in advance. This bipartisan draft, too, would require that providers give patients written notification in advance of treatment, but specifically before receiving any follow-up nonemergency services at an out-of-network facility.
Surprise billing most often occurs in two situations: When the patient is treated by out-of-network physicians who contract with in-network hospitals, and when patients receive follow-up treatment after receiving emergency treatment.
The hospital industry has pushed the blame on insurers. While the American Hospital Association did not respond to Healthcare Dive's request for comment on the draft bill before publication, Ashley Thompson, the association's senior vice president of policy, has opined on surprise billing in the past.
America's Essential Hospitals, the lobbying group for safety net hospitals, told Healthcare Dive its policy staff has not had a chance to fully analyze the draft bill.
Adler said hospitals have not historically been the biggest opposition to surprise billing legislation at the state level. Rather, emergency room doctors and anesthesiologists, who stand to lose the most, are the two main groups most likely to line up in opposition to this bill if it were to move forward as-is.
"It's unclear, because the payment rate required from insurer to provider in these surprise billing situations is relatively high," Adler said. "I would expect some mild pushback at the time being from insurers as well."