On May 21, the House Ways and Means Committee held a hearing entitled, “Protecting Patients from Surprise Medical Bills,” featuring testimony from the ERISA Industry Committee (ERIC), American Hospital Association (AHA), American Medical Association (AMA), and America’s Health Insurance Plans (AHIP). Like previous hearings on surprise billing, the provider groups expressed concern with rate setting and favored arbitration between providers and insurers as the preferred method to address payment to out-of-network providers in surprise billing situations, noting their concern with underpayment and resulting network inadequacy that favors insurers. The insurer and employer groups, however, favor setting a standard rate for services and in-network guarantees for in-network facilities, flagging concern with provider overpayment when arbitration is on the table. They also supported informed consent for patients in non-emergency situations and noted that ground and air ambulance bills must also be addressed. All parties agreed that the patient should be held harmless and in general be only responsible for in-network cost-sharing when faced with surprise bills, noting that there must be a federal solution to surprise bills to address the millions of Americans with employer-based coverage preempted from state laws. Expressing some frustration following the hearing, Subcommittee Chairman Lloyd Doggett (D-TX) told reporters “We did not identify significant grounds for compromise between the two positions today.”

The issue over arbitration versus rate setting is also being played out in the various pieces of legislation offered in the House and Senate and could become a hurdle to getting a bill over the finish line. On May 23, Senate HELP Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) released a health care cost containment package that included provisions to eliminate surprise medical bills, laying out three options for resolving payment disputes: guaranteeing providers at an in-network facility are considered in network; independent arbitration for bills costing more than $750 and paying a median rate based on contracted prices in the area for rates below that; and paying the provider based on the median contracted rate in the area without an arbitration mechanism. Last week, Sen. Bill Cassidy (R-LA) and Sen. Maggie Hassan (D-NH) also introduced their version of surprise billing legislation, which would set a predetermined “median in-network rate” but also allow for independent dispute resolution between health plans and providers. In the House, the “No Surprises Act” has emerged as the primary bill, co-authored by Energy and Commerce Committee Leaders Reps. Frank Pallone (D-NJ) and Greg Walden (R-OR), which would set provider payment rates based on the geography in certain surprise billing situations. Other hearings and legislation are expected out of the House Education and Labor Committee, which has primary jurisdiction in the House. Earlier this month, President Trump called on Congress to pass surprise billing legislation, with administration officials noting they do not favor the arbitration approach.

For more details, see the attached Tax Alert or click here.

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House WM Surprise Medical Billing