House Committees Advance Bills to Address Surprise Billing

Kerry Dooley Young

February 14, 2020

Two US House of Representative committees this week made their cases for different approaches for preventing surprise medical bills ― the unexpected costs patients are saddled with that result from services provided by out-of-network clinicians or companies.

The House Ways and Means Committee on Wednesday passed by a voice vote its bipartisan bill. The measure seeks to establish more use of third-party negotiators ― or arbitration ― for settling certain disputes about payment for out-of-network care. The bill has the support of the American Hospital Association and the American College of Emergency Physicians, according to news releases. In a prepared statement, the American Medical Association also praised the committee's reliance on mediation for disputes on bills.

On Tuesday, the House Education and Labor Committee advanced a more hybrid proposal that seeks to use established prices in local markets to resolve many disputes about out-of-network bills. For cases in which bills top $750 or, in the case of air ambulance services, $25,000, clinicians and insurers could turn to arbitration, described by the Education and Labor Committee as independent dispute resolution.

House Education and Labor passed this bill in a 32-13 vote. Support and dissent were mixed among both Democrats and Republicans. Although most Americans may never get a surprise medical bill, the fear of receiving one can be "paralyzing" and lead people to avoid visits to physicians and hospitals, said Rep. Virginia Foxx of North Carolina, the committee's ranking Republican.

"We, as elected representatives, cannot sit idly by as American families forgo care they need for fear that they'll end up responsible for an unexpected, unaffordable surprise medical bill," she said.

Leaders in both parties have spoken about using a May deadline as a target date for legislation on surprise medical billing.

In December 2019, Congress passed a major fiscal 2021 spending bill that carried with it a short-term fix for the community health centers program and a few other smaller federal medical initiatives. The short-term patch runs out on May 22. Senate Leader Mitch McConnell (R-KY) noted the deadline this week when answering a question on surprise medical billing during a press conference.

"We will have the expiration in May of several popular healthcare provisions, for example, the community health centers that will generate another discussion, and we will continue to try to do that," McConnell said.

The Congressional Budget Office (CBO) last year put a $22.2 billion price tag on the cost of a proposed extension of three federal programs: community health centers, the National Health Service Corps, and certain teaching health centers.

To address these three federal programs in a May bill, lawmakers likely will want to offset the cost of the extensions with savings from another measure. CBO's $22.2 billion estimate comes from its July 2019 review of a Senate Health, Education, Labor and Pensions (HELP) package of legislative proposals, which also addressed surprise medical billing. CBO estimated that almost $25 billion could be saved over a decade if Congress were to enact HELP's proposals on surprise medical billing.

The HELP bill called for mandating that insurers reimburse out-of-network costs on the basis of their own median rates for in-network providers. Although CBO has not published a score of the House Education and Labor's surprise billing legislation, the committee staff had indicated the measure likely would save about $24 billion.

CBO has estimated that Ways and Means' surprise billing legislation would save almost $18 billion over a decade.

Better Directories

A key step for curbing surprise billing would be to have insurers better update their directories of which clinicians are in network, according to AARP, which advocates for Americans older than 50.

In a February 11 letter, Megan O'Reilly, AARP's vice president for government affairs, said her organization was pleased that the House Education and Labor legislation on surprise medical billing included mandates on directories. There have been reports about directories being unavailable and about confusing and outdated information in the ones that can be accessed.

The legislation requires real-time updates and regular audits, seeks to standardize directories across health plans in individual and group markets, and compels insurers to notify consumers if a clinician they have visited has left the network, O'Reilly wrote.

O'Reilly also stressed a need for clinicians to consider insurance networks in making decisions about patients' care.

Consumers who invest time researching their insurers' offerings and seeking in-network care "should not be saddled with a bill from a separate provider or lab for which they had no choice," O'Reilly said.

"Once at the facility or doctor's office, the discretion is with the provider ― not the consumer ― to consult specialists, order tests, and process images," she wrote.

Editors at JAMA made a similar argument this week in a note accompanying a new report on surprise medical billing.

More than 1 in 5 elective procedures result in liability for out-of-network costs. The average surprise bill is just over $2011, according to an analysis of insurance data published in the journal. Surprise medical bills often stem from services provided by anesthesiologists, surgical assistants, pathologists, medical consultants, and radiologists.

Surgeons have an "ethical responsibility to speak out against surprise billing," write JAMA editors Karen E. Joynt Maddox, MD, MPH, and Edward Livingston, MD. Otherwise they risk losing the trust of patients who later receive unexpected bills for their care.

"When feasible, surgeons should ensure that all the personnel involved in the care team that they are leading accept the same insurance plans and should consider refusing to work in facilities that allow surprise billing," Joynt Maddox and Livingston write.

Will Congress Act?

The JAMA editors also urged lawmakers to tackle surprise billing.

"There has been pushback from physician groups, particularly those backed by private equity firms, who argue that such legislation will have potentially negative consequences for clinicians by reducing their leverage to negotiate fair reimbursement," Joynt Maddox and Livingston write. "While it is important that legislation take these issues into account, it is crucial that patients' interests remain paramount."

It's unclear whether there is enough public pressure for Congress to act in 2020 on surprise medical billing. There remains a clear division of opinion among powerful groups about how best to address this issue.

Critics of the benchmark approach contend it gives too much power to insurers at the expense of the medical community.

"We already know insurers are looking for any way they can to pay the least amount possible," said House Ways and Means Chairman Richard Neal (D-MA) on Wednesday. "They will work to push those rates down, regardless of what it means for community providers like physicians, hospitals, and our constituents who they employ."

Congress should examine the effects of insurers entering agreements with too few clinicians, a condition known as narrow networks, Neal said. "Surprise bills would be much less common if insurer networks were more robust," he said.

Critics of the arbitration approach say it benefits private equity firms, which are linked to physician staffing firms, at the expense of consumers.

The Ways and Means bill would create "a new system that is markedly worse than current law for patients and families," said James Gelfand, senior vice president for health policy at the ERISA Industry Committee, which represents large employers, in a February 10 statement.

Gelfand puts the blame for surprise medical billing on those involved with the medical profession who avoid insurers' networks and then charge unreasonable fees in emergencies.

"A government-mandated arbitration regime will waste billions of dollars and countless hours and only reward the most financially motivated players in the health care system ― air ambulance companies, investor-owned physician staffing firms, and hospitals that have become financially intertwined with private equity firms," Gelfand said in the statement.

Lawmakers ultimately punted on this issue last year when faced with this difficult choice of picking sides among powerful interest groups.

Serious congressional debate on surprise billing kicked off in 2019 with the HELP Committee's healthcare package. It included a provision that sought to use established prices for medical services in settling disputes about surprise medical bills.

That was very unpopular with many physician groups, especially those often involved with out-of-network cases. Four organizations opposed to the benchmark approach — the American College of Emergency Physicians, Envision Healthcare, US Acute Care Solutions, and US Anesthesia Partners — last year gave roughly $1.1 million to members of Congress, according to a recent Kaiser Health News analysis. (Private equity firm KKR, which owns the physician-staffing firm Envision Healthcare, a physician-staffing firm, also owns Internet Brands, Medscape's parent company.)

The House Energy and Commerce Committee then followed with a hybrid model for handling surprise medical billing, as reported by Medscape Medical News. Somewhat akin to the House Education and Labor Committee's new bill, the 2019 Energy and Commerce proposal allows for both benchmarks and arbitration.

A December effort to advance a compromise House-Senate bill faltered, with lawmakers punting on the issue of surprise medical billing until at least this year.

The two House markups this week appear to have left many advocates of the differing approaches to surprise medical billing stuck in their positions.

Rep. Phil Roe, MD (R-TN), was among the naysayers in the Tuesday vote on the House Education and Labor's hybrid measure. Roe has been a leader for many months in efforts to have Congress use the arbitration model.

The House Education and Labor bill "will empower insurers to set low reimbursement rates and narrow networks, harming patients by driving the fixed price for services as low as possible," Roe said in a statement.

He instead urged his colleagues to proceed with the Ways and Means approach to surprise billing.

But Egan Kemp, a healthcare policy advocate with the nonprofit consumer watchdog group Public Citizen, maintains that the Ways and Means approach is "the outlier in the process and continues to delay crucial protections for patients.

"The influence of private equity, one of the worst abusers of surprise bills, is evident in their legislation," he said in a statement to Medscape Medical News, in which he urged swift passage of legislation on this matter.

"The time has come for Congress to act to protect patients from surprise medical bills," Kemp said. He noted that patient advocates, consumer groups, and unions have supported the benchmark approach.

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