February 10, 2020

Two House committees on Friday unveiled separate proposals to address so-called "surprise" medical bills—revealing that Congress still hasn't reached consensus on how to tackle the issue.

Inside Congress' epic fight over out-of-network billing

House Ways and Means Committee bill would create arbitration process, but no payment rates

The House Ways and Means Committee on Friday unveiled a bill that would:

  • Limit patients' cost-sharing responsibilities to the in-network rate for emergency medical care provided at out-of-network facilities and for care provided by out-of-network clinicians at in-network facilities; and
  • Prohibit providers from balance billing patients.

To prevent balance billing, the legislation—called the Consumer Protections Against Surprise Medical Bills Act—calls for establishing an arbitration process that insurers and providers could use to settle disputes over out-of-network payments. Under the bill, providers and insurers would have up to 30 days to negotiate a payment rate for out-of-network charges.

If the parties cannot agree on a payment rate during that period, they then could choose to enter an arbitration process established by HHS and the Department of Labor and the Treasury. During the arbitration process, which also could last up to 30 days, both parties would propose their best and final offers to an independent mediator, who would decide on the final payment rate.

According to Roll Call, the mediator would not be permitted to take into account a provider's "usual charges" when devising the payment amount. However, the mediator would have to take into account the median rate typically paid for the services in that region.

The bill also would require insurers to give patients an explanation of benefits that includes cost estimates and notes which providers are in their health plan's network at least three days before a scheduled procedure.

The bill does not include provisions to address surprise medical bills patients receive from air ambulance companies. However, it would require insurers and air ambulance providers to share claims and cost data with HHS.

The bill would not preempt any state laws regarding surprise bills. If enacted, the House Ways and Means Committee's bill would take effect in 2022.

Committee Chair Richard Neal (D-Mass.) and Rep. Kevin Brady (R-Texas), the ranking member on the committee, in a statement said their "bipartisan approach differs from other proposals in that we require—for the first time—that patients receive a true and honest bill in advance of scheduled procedures and we create a more balanced negotiation process to encourage all parties to resolve their reimbursement differences before using the streamlined and fair dispute resolution process."

House Education and Labor bill would establish benchmark payment rates and an arbitration process

Later on Friday, the House Education and Labor Committee introduced a bill that calls for setting a benchmark payment rate for out-of-network care that is based on the median in-network payment rate in a given market. Under the bill—called the Ban Surprise Billing Act—insurers would use the benchmark payment rate to reimburse providers for care costing up to $750.

The bill also would establish an arbitration process that insurers and providers could use to negotiate payments for out-of-network care costing more than $750. Air ambulance providers and insurers also could use the arbitration process for services costing more than $25,000.

Like the Ways and Means Committee's bill, the House Education and Labor Committee's bill would limit patients' cost-sharing responsibilities for certain out-of-network care to in-network rates and prohibit providers from balance billing patients, and would not preempt any state laws regarding surprise bills.

The House Education and Labor Committee's bill also would require:

  • HHS and the Departments of Labor and the Treasury to create an advisory committee to form recommendations intended to protect patients against balance bills from ground ambulance providers;
  • Insurers to maintain accurate provider directories; and
  • Providers and insurers to give patients "a good faith estimate" of cost-sharing charges for health care services within two business days of receiving a request for the estimate.

Proposals highlight lack of consensus over how to address surprise bill

As Axios' "Vitals" reports, the conflicting proposals show "that while everyone wants to prohibit surprise bills, there's still no agreement on how to resolve payment disputes between insurers and providers."

Both of the bills proposed Friday differ from a separate, bipartisan and bicameral measure approved last year by the House Energy and Commerce Committee and Senate Health, Education, Labor, and Pensions Committee—though the House Education and Labor Committee's latest proposal is largely similar to the bicameral measure. Both the House Ways and Means Committee and the House Education and Labor Committee plan to consider their respective bills this week.

Industry stakeholders have been conducting 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.

Already, the Coalition Against Surprise Medical Billing—which represents employers, unions, and health insurers—has come out against the two House proposals introduced Friday.

In addition, America's Health Insurance Plans (AHIP) said it doesn't support legislation that would not establish benchmark payment rates. Cathryn Donaldson, a spokesperson for AHIP, said, "The only solution to protect patients is to establish a fair, competitive benchmark based on locally negotiated rates between doctors and health insurance providers, with no need for arbitration."

Meanwhile, the Federation of American Hospitals (FAH) on Friday expressed support for the House Ways and Means Committee's new bill. FAH President and CEO in a statement said that proposal would "provid[e] certainty for patients while enabling the health care community to settle payments without unnecessary rate setting." He continued, "We are pleased to see this progress on surprise billing legislation and hope that the Congress can unify around this commonsense solution."

Separately, Greater New York Hospital Association President Kenneth Raske said the Ways and Means Committee's proposal is a "significant improvement over the other surprise billing proposals released to date."

Meanwhile, at least one lawmaker is raising concerns about the House Education and Labor Committee's bill. Rep. Donna Shalala (D-Fla.)—a former HHS secretary and current member of the committee—on Friday said she plans to vote against the measure in its current state. "I have problems with it because it's not balanced," Shalala said, arguing that under the bill, "the insurance companies are the big winners. The hospitals in my district and their employees get hurt, and they're the largest employers in my district."

According to Roll Call, federal lawmakers are hoping to pass legislation to address surprise medical bills by May 22, as part of a larger package of bills that would extend funding for certain public health programs (Owens, "Vitals," Axios, 2/10; Luhby, CNN, 2/7; McIntire, Roll Call, 2/7; Cohrs, Modern Healthcare, 2/7; Sullivan, The Hill, 2/7; House Education and Labor Committee release, 2/7; House Education and Labor Committee bill section by section, 2/7; FAH blog post, 2/7).

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