July 16, 2019

The House Energy and Commerce Health Subcommittee on Thursday advanced a bill (HR 3630) to address so-called "surprise" medical bills by setting a benchmark payment rate for out-of-network services.

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Background

Pressure has been mounting in Congress to pass legislation to address surprise medical bills after President Trump in May called on lawmakers to approve such a measure.

The Senate Health, Education, Labor and Pensions (HELP) Committee last month voted 20-3 to approve its own bill intended address surprise bills by establishing benchmark payment rates for out-of-network services based on the median in-network rate in the geographical area where the care was provided—a move hospital groups opposed.

House committee advances No Surprises Act

The House Energy and Commerce Health Subcommittee advanced an amended version of a bill introduced by Committee Chair Frank Pallone (D-N.J.) and Rep. Greg Walden (R-Ore.), the committee's ranking member.

The bill, called the No Surprises Act, similarly to the Senate HELP bill would establish benchmark payment rates for out-of-network services based on the median in-network rate in the geographical area where the care was provided. The House subcommittee amended the bill to tie the median in-network rate to the rate for 2019 and allowing it to grow with inflation. According to Axios' "Vitals", providers favor an arbitration-style process over the benchmark, but they had argued that the House bill's original benchmark rate would have fluctuated each year, giving insurers an unfair advantage in negotiations for in-network rates.

However, some economists say the provision ties the benchmark rate for out-of-network care to inflated prices. For instance, American Enterprise Institute's Ben Ippolito said, "Put another way, freezing rates at their current level means that providers will continue to benefit from their willingness to surprise bill patients."

In addition, the House panel's bill would require health care facilities to give patients at least 24 hours notice before an elective treatment if an out-of-network provider would be involved in their care and would prohibit providers from so-called balance billing.

The bill would require providers to give patients with scheduled care a written and oral notice at the time of scheduling about their provider's 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 would not be allowed to charge the patient an out-of-network rate.

Further, patients who receive out-of-network care from an emergency department—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.

What's next?

The House panel's bill now heads to the full committee. However, it is unclear how far the House or Senate bills will advance, because lawmakers, providers, and insurers disagree on the best approach to address surprise medical bills, the Wall Street Journal reports.

While insurers support the proposal to establish a benchmark rate for surprise bills, hospitals and physician groups oppose the proposal, and favor an independent arbitration process to resolve surprise bills.

Robert Seligson, president of the Physicians Advocacy Institute, said, "Physicians applaud continued bipartisan efforts to end patients' responsibility for surprise medical bills, but remain deeply concerned that legislation imposing an arbitrary, government-set benchmark to settle disputes will drive even more health care consolidation, result in less choice in physicians, and force patients to pay higher prices." Seligson said the House panel's bill "cedes control over resolving disputes to insurers, who created narrow physician networks and high-deductible health plans that are root causes of the surprise medical bill epidemic."

Bruce Siegel, CEO of America's Essential Hospitals, said the bill's proposal to set benchmark rates is "restrictive." 

In a recent brief sponsored by doctors groups, Paul Clement, a former GOP solicitor general, argued that the proposal for a benchmark rate violates the Constitution's Fifth Amendment, which includes a clause limiting the power of eminent domain, the Journal reports.

Inside Health Policy reports that House Energy and Commerce Health Subcommittee Chair Anna Eshoo (D-Calif.) and Senate HELP Committee Chair Lamar Alexander (R-Tenn.) separately have said they would consider supporting an arbitration provision in the final bills.

According to Politico's "Pulse," Rep. Raul Ruiz (D-Calif.) said there is a "strong possibility" he will propose separate legislation to address surprise bills through an arbitration process (Armour/Peterson, Wall Street Journal, 7/10; O'Brien, HealthLeaders Media, 7/11; Gooch, Becker's Hospital CFO Report, 7/11; Owens, "Vitals," Axios, 7/11; Diamond, "Pulse," Politico, 7/11; Gooch, Becker's CFO Report, 7/10; Cohen, Inside Health Policy, 7/11 [subscription required]).

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