There's a new, bipartisan bill to end 'surprise' medical bills. (And this one might actually pass the House.)

Leaders on the House Energy and Commerce Committee on Tuesday released a bipartisan draft bill to address so-called "surprise" medical bills by setting a benchmark payment rate for out-of-network services—a proposal health care providers have said they oppose.

'Surprise' medical bills, explained in 5 charts

The proposal comes after President Trump on Thursday called on Congress to propose and approve legislation to address surprise medical bills.

Draft bill details

Rep. Frank Pallone (D-N.J.), chair of the House Energy and Commerce Committee, and Rep. Greg Walden (R-Ore.), the committee's ranking member, released the 22-page draft bill, called the No Surprises Act, during a meeting with stakeholders on Tuesday. The draft bill represents the first major bipartisan House proposal aimed at addressing surprise medical bills, according to CQ News.

The draft bill would prohibit providers from charging some patients the difference between what a provider charges for an out-of-network service and what their insurer agrees to cover for an out-of-network service—a practice known as balance billing. Under the draft bill, patients who receive out-of-network care from an ED—as well as patients who cannot "reasonably choose their provider"—would be responsible for paying only what they would have been charged if the care had been provided by an in-network provider.

Cases in which a patient cannot reasonably choose their provider would include those in which a patient receives care at an in-network facility from an out-of-network provider.

However, under the draft bill, patients who explicitly agree to accept out-of-network charges would be responsible for paying costs higher than the amount they would be charged for in-network care. The draft bill would establish a payment rate for such cases that would be set at the median in-network rate for services in the geographic area where a patient received care. The draft bill would allow states with pre-existing payment rates for out-of-network care to maintain those rates.

The draft bill would require providers to give patients with scheduled care a written and oral notice at the time of scheduling about their network status and potential charges the patient could incur. If a patient does not sign a consent form acknowledging they know they are seeing an out-of-network provider, the provider will not be allowed to charge the patient an out-of-network rate. 

The draft bill also would authorize $50 million in grants for states to establish all-payer claims databases in order to increase the transparency of health care costs.

The draft bill would not create an arbitration process for resolving surprise medical bills.

Pallone and Walden intend to advance the bill through their committee and send it to the full House for consideration.

Comments

Pallone and Walden said, "We must ensure that patients are not responsible for these outrageous bills, which is why our discussion draft removes patients from the middle. We look forward to receiving constructive feedback on ways to build upon our proposal, so we can advance a bipartisan solution that protects patients from costly surprise medical bills."

Loren Adler, an associate director at the USC-Brookings Schaffer Initiative for Health Policy, said the draft bill likely would drive down health insurance premiums because the proposal would tie payment rates to the median in-network rate instead of the mean in-network rate, which means the proposal would prevent inflated outliers from increasing costs. "This is very key for how [the Congressional Budget Office] will score the bill," Adler said, explaining, "You will likely see savings and premiums reductions because of this bill."

Benedic Ippolito, a research fellow in economic policy studies at the American Enterprise Institute, said the draft bill would decrease health care spending through cuts to physicians and hospitals. Ippolito said setting in-network rates for certain out-of-network care would provide insurers with leverage to negotiate lower payments for specialty physicians, who sometimes choose not to contract with insurers. He added, "There is no question this proposal would transfer a bargaining power from providers to insurers—a fact that is sure to have provider groups up in arms."

Rick Pollack, president and CEO of the American Hospital Association, said, "We strongly oppose approaches that would impose arbitrary rates on providers. Insurers should maintain comprehensive networks and this plan takes us in the opposite direction by removing incentives to contract with providers."

Sherif Zaafran, chair of the lobbying group Physicians for Fair Coverage, urged lawmakers to consider an arbitration process to address surprise medical bills, noting that New York's "Alternative Dispute Resolution" process for such bills has a "proven record of success" (Cohen, Inside Health Policy, 5/14 [subscription required]; McIntire, CQ News, 5/14 [subscription required]; Luthi, Modern Healthcare, 5/14; Owens, "Vitals," Axios, 5/15; Scott, Vox, 5/14).

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