December 10, 2019

Hospital, physician groups pan surprise billing compromise

Daily Briefing

    The White House on Monday expressed support for a new bipartisan agreement to address so-called "surprise" medical bills, but the proposal's future is uncertain, as it faces opposition from the provider industry and has yet to receive an endorsement from congressional leadership.

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    Details on the deal

    Senate Health, Education, Labor and Pensions (HELP) Committee Chair Lamar Alexander (R-Tenn.), House Energy and Commerce Committee Chair Frank Pallone (D-N.J.), and Rep. Greg Walden (R-Ore.), the House committee's ranking member, on Sunday announced that they had reached an agreement in principle on legislation to address surprise medical bills.

    The new bill will be similar to the House Energy and Commerce Committee's No Surprises Act (HR 3630), which included both benchmark-rate setting and an arbitration backstop for providers. However, the bill, which has not yet been publicly released, would make it easier for insurers and providers to move forward to an independent dispute resolution by lowering the threshold for arbitration.

    For example, the bill would set payment rates for out-of-network care based on a benchmark of the median in-network rate in a given area and establish an independent dispute resolution process for insurers and providers. That process would enable providers and insurers to appeal median in-network payments above $750—down from more than $1,250 in an earlier version of the bill. Arbiters under the bill would be required to take into account a provider's training and experience, the insurer's and provider's market share, and other extenuating factors when settling on a payment. It is unclear whether arbiters would be required to consider a benchmark payment rate.

    Under the bill, the insurer or provider initiating the independent dispute resolution process would not be allowed to take the same party to arbitration for the same item or service within a 90-day period. Patients would be held harmless in balance bills disputes.

    In addition, the bill would address surprise medical bills from air ambulances. The bill's proposal to address surprise medical bills from air ambulances is similar to the one included in a Senate bill. For example, the bill would require insurers to pay air ambulance carriers at least the median in-network negotiated rate in the area. However, unlike the Senate bill, the new bill would allow insurers and air ambulance providers to use arbitration for air ambulance payments if the median in-network rate is more than $25,000. The bill also would ban air ambulance carriers from balance billing.

    The bill also would require all providers and health plans to give patients their bills within 60 days of discharge—up from the 45 days proposed in the Senate bill.

    Lawmakers said the legislation also will include some provisions that are not associated with addressing surprise medical bills. For example, the House Energy and Commerce Committee in a release said the legislation would:

    • Increase from 18 to 21 the minimum age at which U.S. residents can purchase tobacco products;
    • Provide about $20 billion over five years to fund community health centers; and
    • Require more transparency and bolster competition in an effort to reduce prescription drug and medical costs, including banning anti-competitive clauses in contracts between hospitals and insurers and requiring drugmakers to provide the government with justifications for large price increases.

    The lawmakers said they hope to include the new legislation in an end-of-year government spending bill, which Congress must approve and President Trump must sign by the end of Dec. 20 to avoid a government shutdown.

    Industry groups pan proposal

    Several industry groups have raised concerns about the proposal.

    For example, the American Hospital Association (AHA) raised concerns about the bill having a damaging effect on hospitals because of payment cuts. AHA is asking lawmakers to amend the bill not to include a benchmark payment rate.

    Chip Kahn, the president and CEO of the Federation of American Hospitals, said, "No patient should ever receive a surprise medical bill. However, this package takes two steps forward and three steps back."

    The Greater New York Hospital Association (GNYHA) raised concerns, as well. GNYHA President Kenneth Raske said, "This rush to get surprise billing language into an end-of-year funding bill, without regard to real-world consequences to health care providers, is dangerous and unnecessary. We encourage Congress to slow down and ensure that this important policy is done thoughtfully and correctly."

    The American College of Surgeons (ACS) said the bill's $750 threshold for arbitration is too high. ACS said, "A significant number of physician-provided services have less than a $750 charge. For all those services, the physician would be forced to accept initial payment."

    The Association of Air Medical Services (AAMS) said, "AAMS has been working with members of Congress to develop legislation that would create transparency in the industry and take patients out of the middle, as well as collect data for proper reimbursement. However, we continue to see legislation that will have a devastating impact on the air ambulance community, with no data and very little research, move forward."

    White House praises proposal—but congressional leaders remain mum

    The White House welcomed the proposal and asked Congress to send the bill to the president's desk before the end of the year.

    The Trump administration in a statement said, "This compromise reflects the input of doctors and hospitals and is the result of months of delicate work to reach a deal among congressional members and the White House that protects patients"

    However, House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Mitch McConnell (R-Ky.) have not yet indicated whether they support the proposal. It is also unclear whether Senate Minority Leader Chuck Schumer (D-N.Y.) and the senators who have worked on their own proposal to address surprise medical bills support the new bill.

    The agreement also does not have sign-off from Sen. Patty Murray (D-Wash.), the ranking member of the Senate HELP committee. Helen Hare, Murray's communications director, said Murray did not sign off on the agreement because although she "believes the overall agreement takes important steps forward on a number of issues," she "is [still] working with some members of her caucus on concerns they still have" (Sullivan, The Hill, 12/9; Cohen, Inside Health Policy, 12/9 [subscription required]; Cohrs, Modern Healthcare, 12/9; Armour, Wall Street Journal, 12/9; Fram, Associated Press, 12/9).

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