Many Americans have been faced with surprise medical bills. Surprise medical bills typically result when obtaining medical care from a provider or facility that you may not realize is out of your insurance network. As a result, you are faced with paying a large balance of a bill in excess of what your health insurer will cover. Several states have passed surprise billing legislation over the past few years which contain certain safeguards including prohibiting balance billing when a consumer had no other provider choice, setting reimbursement standards for providers in the case of balance billing and establishing a balance billing dispute resolution process. However, there remains no consistent standard across states nor is there any national regulation to date on this issue.
To address surprise billing, Senate and House leadership have backed bipartisan legislation that would require insurers to pay at least the median in-network negotiated rate or a benchmark rate for the area market for out-of-network services in an effort to protect consumers against large unexpected out of pocket costs for their healthcare. The proposed legislation is a part of a larger proposed healthcare reform legislation known as the Lower Health Care Costs Act of 2019, which in addition to preventing surprise medical bills, addresses a) encouraging transparency and health plan innovation efforts; b) increasing awareness and knowledge of the safety and effectiveness of vaccines; c) creating obesity prevention guides, d) improving public health data systems; e) preventing discrimination in healthcare; f) improving access to healthcare in rural areas; and h) addressing prescription drug prices.
The proposed legislation is an attempt to appease as many parties as possible, but has drawn criticism from payers, providers and hospitals, therefore it is likely to continue to undergo revision. The American Hospital Association (AHA) opposed the proposed legislation stating that setting a benchmark rate would be problematic as it “gives insurers an incentive to remove hospitals from their networks and force artificially low reimbursement rates, which limits access.”[1] Additionally, the American Association of Medical Colleges opposed the proposed legislation stating that they “are committed to ensuring that patients have access to the critical services provided by teaching hospitals and academic physicians, and therefore continue to strongly oppose any proposal that includes benchmark rate setting.”[2] Whereas the Coalition Against Surprise Medical Billing (CASMB), which is backed by multiple payer and employer groups, including America’s Health Insurance Plans opposes including arbitration in the legislation, but not the benchmark rate setting. CASMB in a statement expressed concerns about abuse of the arbitration process based on experience under state laws governing surprise billing.[3]
Congress faces a fast-approaching deadline to get a ban passed this session and is still charged with funding the government by December 20, 2019. However, the House Ways & Means Committee announced on December 11, 2019 a vague outline of a rival proposal to address surprise billing and called for lawmakers to delay legislative action on the Lower Health Care Costs Act until 2020. The Ways & Means plan appears to be different from other legislative proposals as it includes a “reconciliation process” prior to arbitration if providers and insurers cannot agree on payment for emergency or out-of-network care at in-network facilities, but all major details remain unclear. After the announcement by Ways & Means, both the AHA and CASMB indicated their willingness to work with Congress on surprise billing legislation, however the AHA indicated its continued opposition to the setting of benchmark rates while the CASMB indicated their support in favor of setting benchmark rates.[4]
While it remains unclear what final legislation will look like, there seems to be a concerted, immediate effort by Congress to address surprise medical bills. We will continue to monitor this legislation as it moves through Congress.
[1] Rick Pollack, AHA Statement on Surprise Billing Announcement, Am. Health Assoc., Dec. 8, 2019, https://www.aha.org/press-releases/2019-12-09-aha-statement-surprise-billing-announcement (last accessed December 12, 2019).
[2] American Association of Medical Colleges, AAMC Statement on Surprise Billing Announcement, Am. Assoc. of Med. Col., Dec. 9, 2019, https://www.aamc.org/news-insights/press-releases/aamc-statement-surprise-billing-announcement (last accessed December 12, 2019).
[3] Press Release, Coalition Urges Congress to Maintain Benchmark Provision As Surprise Billing Safeguard, Avoid Arbitration, Coalition Against Surprise Med. Billing, Dec. 8, 2019, https://stopsurprisebillingnow.com/coalition-urges-congress-to-maintain-benchmark-provision-as-surprise-billing-safeguard-avoid-arbitration/ (last accessed December 12, 2019).
[4] Compare Rick Pollack, Statement on House Ways and Means Committee Proposal on Surprise Billing, Am. Health Assoc., Dec. 12, 2019, https://www.aha.org/press-releases/2019-12-12-statement-house-ways-and-means-committee-proposal-surprise-billing (last accessed December 12, 2019) to Press Release, Coalition Statement on Ways & Means Committee Proposal To Address Surprise Medical Billing, Coalition Against Surprise Med. Billing, Dec. 12, 2019, https://stopsurprisebillingnow.com/1140-2/ (last accessed December 12, 2019).
[View Source]
