Policy and Regulation News

House Hearing Outlines Competing Solutions to Surprise Medical Bills

A House hearing about surprise medical billing came to little conclusion, save for a renewed commitment to patient protections.

surprise medical bill

Source: Getty Images

By Sara Heath

- Legislation to address surprise medical bills must center on the patient, protecting patients from having to take part in mitigating extraordinarily high medical bills.

Such was the conclusion of a House Ways and Means Committee hearing on the matter, although little other consensus was reached.

As more patients report receiving a surprise medical bill, or a hospital charge they did not expect or did not expect to be so high, industry leaders are acknowledging their role in addressing these issues. The onus should be on the payer, provider, and Congressional leaders, not on patients, to reduce these costs.

“Hospitals and health systems are deeply concerned about the effect of unanticipated medical bills on our patients, which could impact their out-of-pocket costs and undermine their trust and confidence in their caregivers,” testified Tom Nickels, the president and CEO of the American Hospital Association (AHA). “Protecting patients from surprise medical bills is a top priority for the AHA Board of Trustees and all of our members.”

Representatives from the American Medical Association (AMA), America’s Health Insurance Plans (AHIP), and the ERISA Industry Committee (ERIC) agreed, stating that surprise medical bills undercut industry efforts to improve patient care and deliver treatment at an affordable and reasonable cost.

READ MORE: Health Plans Ask Congress for Unified Action on Surprise Billing

For its part, Congressional leaders including Lloyd Doggett (D-TX), who led the hearing, acknowledged a role for the legislature to tackle surprise medical bills.

“We can count on neither the media nor the states to take the surprise out of these bills for every patient,” he said in his opening remarks.

Instead, federal action informed by the views of healthcare industry leaders will be necessary, hence the purpose of the hearing.

The hearing brought to the forefront a flurry of solutions, each gaining both support and critique from the testifying industry stakeholders.

The notion of benchmarking payment rates received both positive and negative reviews. A benchmark payment rate would establish the rate at which a hospital would be reimbursed in the event that a patient received out-of-network emergency care.

READ MORE: Payers, Providers, Lawmakers Debate Surprise Billing Guidelines

The patient would not be held liable for the entirety of the out-of-network cost; instead, the hospital would receive a standard reimbursement rate from the payer, a plan that gained support from ERIC.

ERISA represents a set of national standards that health plans must follow. Most patients are enrolled in ERISA health plans, making ERIC a key player in the plan to address surprise medical bills.

Setting a national benchmark of 125 percent of the Medicare rate for certain procedures would be ideal, ERIC’s James Gelfand, senior vice president of health policy, said. However, the group also outlined a plan to pay hospitals 80 percent of the regional average for a certain procedure.

But other groups were not so keen on the idea, including the American Hospital Association (AHA). Setting a reference or benchmark price could have impacts on network adequacy, or the breadth of a payer’s network.

“We are particularly concerned that any attempt at setting a reimbursement standard in law will have significant consequences, including, as referenced above, the creation of a disincentive for insurers to maintain adequate provider networks,” said Nickels.

READ MORE: Senators Request Payer, Provider Data on Surprise Medical Billing

“Growth in the use of no-network, reference-based pricing models in the commercial market suggests this already is a growing strategy, and one that would accelerate if the insurer could simply default to a government-established, out-of-network rate or methodology.”

Industry leaders also had competing views about providing transparency about out-of-network care. Transparency regulations would require providers to disclose to patients when the patient would be referred to a facility, provider, or service that was not covered under her health plan. Some proposals call for providers to refer patients to in-network options, as well.

None of the testimonies said transparency was a bad idea, per se. ERIC and the AMA both agreed such a process could be fruitful. AHA likewise agreed transparency is a positive step forward in healthcare, but would not be a solution to the surprise medical billing issue.

The process may be long, arduous, and confusing for patients while also delaying patient access to emergency care, Nickels said.

And while calls for federal regulation of payer-provider negotiations and arbitration may not have received any direct critique, stakeholders held different views of how this process should look.

Some organizations, such as America’s Health Insurance Plans (AHIP) said states should reserve the right to develop their own arbitration processes.

When a “baseball style” arbitration process – one in which payers and providers outline what they believe a fair price and a third-party selects one – is used, AHIP said both payers and providers should be responsible for the actual cost of the negotiation, which witnesses admitted can be costly.

What did receive near unanimous agreement was the rejection of bundled emergency payments, which nearly all witnesses agreed would be arduous and not reflective of the true cost of care at different organizations.

Additionally, most witnesses agreed that network adequacy requirements were essential to addressing surprise medical bills. These bills occur when a patient receives out-of-network care. If the network were broad enough, the patient’s likelihood of incurring such a cost may go down, said AMA trustee S. Bobby Mukkamala, MD.

“Recent efforts to lower health care premiums have induced the rise of high deductible, narrow network, and other limited plan options that may increasingly leave patients with health care bills their insurer will not pay,” Mukkamala said. “Moreover, patients are increasingly coming face-to-face with payer policies that attempt to inappropriately narrow the scope of the coverage they purchased.”

Additionally, more needs to be done to address payers that have narrowed their service offerings. Policies that allow payers to retroactively deem emergency care unnecessarily and therefore exempt from coverage are extremely limiting, Mukkamala said, and need to be addressed.

AHIP did not discuss network adequacy in its testimony.

For its part, Congress has taken steps to address surprise medical bills. Multiple different bills have floated through Congress seeking to provide different solutions to unexpected billing, but none have yet received passage, likely because of the competing interests outlined during the hearing.

Recent statements from President Trump have also brought surprise medical bills to the forefront, although the President has yet to outline or endorse any of the common solutions proposed.

“While recently condemning surprise billing, President Trump has rejected both of these approaches,” Doggett said, referencing reimbursement benchmarking and arbitration solutions. “It is unclear what solution he supports, but at least some in the Administration appear to advocate bundling payments.”

Doggett suggested Congress is at a loss for what they specifically should do to address surprise medical billing, as well as an openness to compromise.

“The leading proposals all have their pros and cons,” Doggett said. “I support whichever solution can secure 218 votes here in the House and gain Senate approval and the President’s signature,” he concluded.