Bipartisan draft to ban surprise billing sets rates, nixes arbitration

By | May 15, 2019

Dive Brief:

  • House lawmakers on Tuesday released a bipartisan draft bill to ban surprise medical billing and set a minimum payment standard for out-of-network services at the median rate for in-network services in the geographic area the care was delivered.
  • The No Surprises Act does not include an arbitration clause. That will please payers and the White House, which have explicitly opposed such a provision. The bill draft was circulated by the House Energy and Commerce Committee Chairman Frank Pallone, D-N.J., and ranking member Greg Walden, R-Ore.
  • The American Hospital Association, however, is not pleased. “We strongly oppose approaches that would impose arbitrary rates on providers,” AHA CEO Rick Pollack said in a statement. “Insurers should maintain comprehensive networks and this plan takes us in the opposite direction by removing incentives to contract with providers.”

Dive Insight:

The draft is “the strongest proposal to date on the dual fronts of protecting consumers and reducing health care costs,” according to a group of Brookings Institution policy analysts writing in Health Affairs

And it comes days after President Donald Trump called on Congress to take action to ban the practice, which has come under increasing scrutiny as more people obtain insurance and experience an unexpected and high-cost charge from a provider who turns out to be not in-network.

Trump said surprise billing was “one of the biggest concerns Americans have about healthcare” and pushed lawmakers to find a bipartisan solution that applies to all insurance markets and cuts patients out of negotiations.

Also Tuesday, the House Ways and Means Subcommittee announced it will hold a hearing on surprise billing May 21.

The issue of arbitration has been hotly contested. America’s Health Insurance Plans has strictly opposed including the practice in laws banning surprise billing.

In a statement Tuesday, AHIP CEO Matt Eyles praised the newest proposal. “This draft bill would ensure patients are protected; that doctors are paid fairly; that networks are supported; and that the free market is permitted to work to ensure affordable, high-quality care,” he said. “This bill will go a long way to protect American consumers and patients, and we look forward to continuing to work with all members of Congress and the Administration on real solutions.”

But some policy experts argue it’s necessary for comprehensive consumer protection. And there’s reason to think it works. In New York, consumer complaints about surprise bills have declined dramatically since a ban went into effect in 2015, according to a new report from Georgetown University’s Center on Health Insurance Reforms. A key tenet of New York’s law is what is called “baseball style” arbitration, in which the payer and provider each submit one payment offer and a neutral arbiter selects which will be used.

The authors of the Health Affairs post side against arbitration, saying such a provision “could be unpredictable, lacks transparency, and could involve significant administrative costs.”

As action picks up at the federal level, states are also eyeing legislation. Colorado Gov. Jared Polis, a Democrat, was expected to sign a bill this week that bans surprise billing. Washington state has approved legislation, and Texas also has a law currently under consideration.

A federal ban would be far more powerful, because state laws don’t apply to employer’s self-funded plans. The federal bill proposed Tuesday, however, defers to state regulations on payment rates.

“We must ensure that patients are not responsible for these outrageous bills, which is why our discussion draft removes patients from the middle,” Pallone and Walden said in a joint statement Tuesday. “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.”

Healthcare Dive – Latest News