At the Margins

Surprise billing is still a problem. Here's how the legislative fixes compare.

by Lauren Robinson and Robin Brand

Surprise billing continues to garner significant media scrutiny with stories of unexpected medical bills up to tens of thousands of dollars, exacerbating patients' fear and frustration. The attention has spurred debate around potential state and federal government solutions. Providers and insurers (and their respective lobbyists) are now squaring off, each advocating for different solutions, with patients stuck in the middle.

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Action at the state level

Surprise billing legislation actually isn't new; state laws attempting to remedy the issue aren't uncommon. Yet 32 states have laws that are insufficient for the nearly 61% of patients with federally regulated insurance plans. Only 13 states have passed comprehensive protections that prohibit providers from surprise billing, hold patients financially harmless, cover emergency and non-emergency services, and provide a payment resolution process.

Federal bills to watch

There are currently eight federal bills addressing surprise billing in play, varying in coverage, and in legislative status. The No Surprises Act (H.R. 3630) and Lower Healthcare Costs Act (S. 1895) are gaining the most attention.

Both bills were introduced this summer and implement protections modeled after the 13 states with comprehensive legislation. The federal legislation incorporates provisions to review revenue sharing, establish a state payer claims database, and regulate payment for air ambulances.

Not all bills are created equal

Although both bills share common themes, S. 1895 provides a more holistic approach to lowering health care costs, improving care quality, and expanding access by focusing on broader issues such as contract regulations between providers and insurers, limited services for minority populations, inefficient health care data exchanges, and constrained preventive health programs.

The debate over benchmark payments

Both bills include a benchmark payment process that establishes a pre-calculated rate that providers will be reimbursed; providers have argued that this process would de-incentivize insurers to contract in-network and ultimately harm patient access. This disruption compounds providers' fears surrounding network adequacy and appropriate reimbursement, but legislators aren't acting blindly. Fourteen states have established a similar payment resolution process to the one proposed in both bills.

Providers and payers aren't the only ones invested in this fight

Private equity (PE) firms' role in the surprise billing debate has garnered attention, given PE ownership and continued investment in physician practices and staffing firms. Doctor Patient Unity, a group funded by Blackstone and KKR's physicians staffing firms, spent $30 million on ads that targeted surprise billing legislation, assumedly because they benefit from out-of-network billing.

Energy and Commerce Chair Frank Pallone (D-N.J.) and ranking member Greg Walden (R-Ore.) have launched a bipartisan investigation to examine the role of PE in rising health care costs and surprise billing. Pallone and Walden are requiring CEOs of these firms to report annual revenue from out-of-network and in-network billing, outline any decreases or increases, and describe the role the firm has in the staffing companies' billing strategy.

 

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