On June 12, the Subcommittee on Health of the Committee on Energy and Commerce held a hearing entitled, "No More Surprises: Protecting Patients from Surprise Medical Bills," featuring testimony from patient advocates, physician and hospital groups, insurer and employer representatives, and the air ambulance industry. Throughout the hearing, the panelists discussed their views on several state models to address surprise billing, with the provider community favoring New York's hybrid model that includes "baseball style" arbitration and payer groups favoring the California model, which features setting rates based on the greater of 125% of Medicare or the average contracted rates. The provider community has been a strong proponent of arbitration, arguing that the New York model — and arbitration models more broadly — allow for fair rates to be negotiated, and that models that set rates can force providers to accept lower payment and result in inadequate provider networks. The payer community on the other hand, has argued for the setting of appropriate and reasonable benchmarks rates for reimbursement, arguing that models such as California have led to lower rates of surprise billing and increased network participation, while arbitration would increase costs to the system.

The panel also discussed the committee's draft bill, the "No Surprises Act," which would prohibit balance billing and limit patient cost-sharing to the in-network amount for emergency services, and services provided by certain facility-based providers in the private insurance market. It would resolve payment disputes by requiring that the insurer pay at minimum the median in-network negotiated rate for the service in the geographic area where the service was delivered and require patient notice and consent for scheduled, out-of-network care. While many on the committee noted support for the bill, Rep. Raul Ruiz (D-CA) said there are too many loopholes and that his bill, the "Protecting People from Surprise Medical Bills Act," includes more robust patient protections. Rep. Larry Bucshon (R-IN), a physician, said he prefers a hybrid approach like New York's to help solve the problem and that the draft bill could lead to a "race to the bottom" in terms of physician payment. Rep. Morgan Griffith (R-VA) and Rep. Ben Ray Lujan (D-NM) were the only to question the representative from the air ambulance industry, asking for a better explanation of the high costs incurred and getting a response that the problem is the low rates of reimbursement for Medicare, Medicaid, and the uninsured.

For more details, see the attached Tax Alert.

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House Energy and Commerce Hearing on Surprise Billing