December 15, 2020

Surprise! Congress reached an unexpected agreement on 'surprise' medical bills.

Daily Briefing

    Key congressional committees on Friday announced that they reached an agreement on draft legislation intended to ensure patients no long receive so-called "surprise" medical bills, bringing hope for a long-stalled initiative that many experts did not expect Congress to address until next year at the earliest.

    3 major factors driving the surprise billing legislative landscape

    Background: Congressional efforts to address surprise bills stall in 2019

    Federal lawmakers throughout 2019 had set their sights on approving legislation to address surprise medical bills, but their leading proposals had faced opposition from some industry stakeholders and federal policymakers. Ultimately, congressional leaders decided to delay legislative action on surprise medical bills until 2020 to give lawmakers more time to work on the issue.

    Industry stakeholders' and some policymakers' biggest clashes on legislative proposals to address surprise medical bills mostly centered around whether the federal government would set benchmark payment rates for out-of-network medical services that insurers and providers would use to determine payments for that care, whether the federal government would establish an arbitration process for insurers and providers to settle payment disputes, or both. For much of last year, industry stakeholders conducted intense lobbying efforts vying for their preferred proposals on how to address surprise medical bills—and blasting the proposals they dislike. In general, insurers support setting a benchmark payment rate for out-of-network bills, while providers support creating an arbitration process for settling out-of-network payment disputes.

    And although leaders in Congress had intended to pick up efforts to address surprise medical bills early this year, lawmakers ultimately spent most of 2020 focused on legislation intended to address America's novel coronavirus epidemic. As a result, lawmakers largely sidelined their push to address surprise medical bills, and many experts and stakeholders did not expect Congress to make progress on legislation intended to address surprise medical bills until sometime next year.

    Key committees announce late-year deal to address surprise medical bills

    But four key congressional committees—the Senate Health, Education, Labor, and Pensions (HELP) Committee; the House Energy and Commerce Committee; the House Education and Labor Committee; and the House Ways and Means Committee—surprised stakeholders and observers last week, when they announced late Friday that they had reached an agreement on a draft legislative proposal targeting surprise medical bills and that they were hoping to have Congress approve the legislation before the end of this year.

    The draft legislative proposal, called the "No Surprises Act," would prohibit out-of-network providers from billing patients for more than they would be charged in network and prohibit health plans from requiring patients to pay extra for "out-of-network emergency care, for certain ancillary services provided by out-of-network providers at in-network facilities, and for out-of-network care provided at in-network facilities without the patient's informed consent," according to a section-by-section breakdown of the proposal. The proposal also would prohibit out-of-network air ambulance providers from charging patients more than their in-network costs in the same instances. Notably these provisions would not apply if a provider notifies a patient of their estimated costs of out-of-network care at least 72-hours prior to the patient receiving the care, and the patient consents to the care.

    In addition, the proposal would require health plans to attribute any "out-of-network surprise bills" to a "patient's in-network deductible." The proposal would require insurers to make up front payments to providers for any applicable out-of-network care, but the proposal does not call on the federal government to set any payment benchmarks for out-of-network care.

    The proposal also would create a "baseball-style" arbitration process for providers (including air ambulance providers) and insurers to use to settle payment disputes, and the section-by-section breakdown states that the proposal would "[e]nsur[e] that patients are kept out of the middle of provider-plan billing disputes."

    Under the proposal, providers and insurers would have a "30-day open negotiation period" to settle disputes over out-of-network claims, according to the breakdown. If providers and insurers are not able to reach a resolution during that timeframe, they can use the new, binding arbitration process that will be known as Independent Dispute Resolution (IDR) and administered by independent entities that have no affiliations with insurers or providers. There would be no monetary threshold for triggering the IDR process, and the involved insurer and provider each would put forward a proposed payment rate for the services provided.

    During the IDR process, the independent entity would consider median in-network payment rates for the services involved in the claim, as well as any relevant information submitted by the insurers and providers and other certain factors. The entity then would issue a decision regarding the proposed payment amounts, and the parties would have to abide by that decision and make any necessary payments within 90 days.

    According to the breakdown, the proposal would bar parties that initiated the IDR process from initiating another IDR process against the same part for the same services for 90 days following the initial IDR decision.

    Among other things, the new legislative proposal also would:

    • Require air ambulance providers to submit two years' worth of cost data to HHS and the Department of Transportation (DOT), require health insurers to submit two years' worth of claims data related to air ambulance services to HHS, and require HHS and DOT to publish a report on air ambulance costs and claims;
    • Require health plans to include in-network and out-of-network deductible requirements and out-of-pocket maximums on enrollee's plan or insurance identification cards;
    • Require health plans to provide enrollees with an Advance Explanation of Benefits for any scheduled services three days in advance, at minimum, that details which providers will be administering the services, how much the services will cost, and whether the providers participate in the health plan's network;
    • Requires health plans to provide consumers with a price comparison tool;
    • Require federal agencies to conduct follow-up investigations and release reports on how the legislation's provisions affect the health care industry;
    • Require providers to submit charges to health plans no more than 30 calendar days after services are provided or a patient is discharged, health plans to adjudicate and return charges to providers no more than 30 calendar days after receiving them, and providers to send adjudicate bills to patients no more than 30 calendar days after receiving the adjudicated charges from insurers.

    Further, under the legislative proposal, patients would not be obligated to pay any charges they receive for care more than 90 calendar days after the care was provided.

    The legislative proposal also would extend certain federal funding, at current levels, for community health centers, the National Health Service Corps, the Special Diabetes Program for Type I Diabetes, the Special Diabetes Program for Indians, and the Teaching Health Center Graduate Medical Education Program for fiscal years 2021, 2022, 2023, and 2024.

    What are the bill's prospects?

    In a statement issued Friday, House Speaker Nancy Pelosi (D-Calif.) called for the new proposal to be included in a federal spending package that Congress must approve before the end of this year to avoid a government shutdown.

    Separately, Senate Minority Leader Chuck Schumer (D-N.Y.) said he hoped Congress would pass the new proposal "into law as soon as possible."

    However, it appears unlikely that Congress will approve the legislation before the end of this year.

    According to Inside Health Policy, multiple sources have said Senate Majority Leader Mitch McConnell (R-Ky.) does not want to include measures intended to address surprise medical bills in a year-end spending package. Representatives for McConnell did not respond to Politico's or The Hill's requests for comment on the matter, the publications report.

    With the last remaining days of 2020 counting down, Congress has limited time to tackle key year-end bills, including spending packages and potentially new coronavirus relief bills. That could mean lawmakers won't have time to advance separate legislation related to surprise medical bills.

    Further, some industry groups already have raised concerns about the legislative proposal, Axios' "Vitals" reports.

    For example, "Vitals" reports that the American Hospital Association (AHA) on Sunday said lawmakers should "consider several modifications to the dispute resolution process to reduce burden on all parties and ensure fair consideration of offers." In addition, AHA said it has "significant concerns" with some of the proposal's measures pertaining to billing and transparency, according to "Vitals."

    Separately, America's Health Insurance Plans said, "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," "Vitals" reports.

    Beyond 2020, it becomes even less clear whether Congress would pass legislation intended to address surprise medical bills, Politico reports. According to Politico, that's because "[t]wo of the key Republican champions of a surprise billing fix"—Senate HELP Committee Chair Lamar Alexander (R-Tenn.) and Rep. Greg Walden (R-Ore.), the ranking member on the House Energy and Commerce Committee—"are retiring this year" (Cohen, Inside Health Policy, 12/11 [subscription required]; Bill breakdown, accessed 12/14; Luthi/Roubein, Politico, 12/11; Owens, "Vitals," Axios, 12/14; Sullivan, The Hill, 12/11).

    Learn more: 3 major factors driving the surprise billing legislative landscape

    surprise billing

    We examined the three major factors driving surprise billing and five key components of state surprise billing legislation. States’ experiences can prepare stakeholders for the expected effects of similar proposals at the federal level and inform lobbying efforts that align with organizational goals.

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