Surprise Medical-Bill Legislation Gets Boost in Bipartisan Deal

(Bloomberg) -- Doctors would be able to take out-of-network charges to arbitration more easily under an agreement reached between House and Senate legislators to stop patients from receiving unexpectedly high medical bills.

The agreement would lower the threshold for taking disputed bills to arbitration to $750 instead of the $1,250 level approved in July by the House Energy and Commerce Committee. Legislation approved in June by the Senate Committee on Health, Education, Labor and Pensions doesn’t include arbitration.

The deal struck by Senate HELP Committee Chairman Lamar Alexander, a Tennessee Republican, and House Energy and Commerce Committee leaders Frank Pallone of New Jersey, a Democrat, and Greg Walden of Oregon, a Republican, finds a middle ground between the two.

The White House applauded the deal Monday, saying the compromise “reflects the input of doctors and hospitals and is the result of months of delicate work to reach a deal among congressional members and the White House that protects patients.”

It isn’t clear when the new version will receive committee and floor votes.

Passing legislation to prevent emergency room doctors, anesthesiologists and other specialists from sending patients “surprise” bills that can amount to thousands, or even tens of thousands, of dollars could be one of the biggest achievements of the current Congress in health-care legislation. Even though there is bipartisan, bicameral agreement to prevent out-of-network medical providers from billing patients, consensus on how to fix the problem has bogged down over the nuts and bolts.

Lowering the threshold would open the door for more arbitration cases, but the agreement includes a 90-day cooling off period that cuts down on likely abuse from repeat offenders who could game the system. Following an arbitration decision, the party that initiated the proceeding couldn’t go to arbitration for the same service for 90 days.

The agreement also would also increase the minimum age to sell tobacco products to 21 years of age from 18.

In-Network Rates

The proposed legislation would prevent doctors and hospitals from billing patients more than the in-network amount. Payment disputes between providers and insurers would be set at the median in-network rate for the geographic area in which the services were delivered.

The agreement also would prohibit air ambulance services from charging patients more than the in-network amount, even if the service isn’t covered by the patient’s insurance network. Air ambulance service charges have been one of the biggest problems for many patients, especially in rural areas, since those charges can be extremely high and often aren’t covered within an insurance company’s networks.

The agreement also includes transparency provisions that would remove gag clauses in contracts between providers and health plans that prevent employers, who often sponsor their employees’ plans, from getting de-identified claims data. Many employers have sought that information so they can compare the rates they’re paying for hospitals with other nearby facilities and judge whether their health insurance carrier is getting them a good deal.

A grant program would be established to create and improve all payer claims databases. Those are statewide databases that collect health-care claims data from insurers to help control cost and assist quality improvement.

The deal also would require more transparency about the marketing and licenses of complex medicines like insulin. Information for biological products would have to be submitted to the Food and Drug Administration and published, including marketing and licensure status, patent information and exclusivity periods. Biological products, including insulin, that are expected to transition to an FDA pathway for biologics in March 2020 wouldn’t receive new, extended market exclusiveness under the agreement.

Market Reaction

Health insurers and employer groups issued a statement Sunday lauding the inclusion of a market-based benchmark to resolve billing disputes. But even so, the Coalition Against Surprise Medical Billing, which includes health insurers and employers, also said that “we have significant and serious concerns about arbitration being abused by out-of-network providers and private equity firms.”

Private equity firms own many doctor staffing companies that employ emergency room physicians. Two such companies, TeamHealth and Envision Healthcare, provided financial backing for ads this fall promoting arbitration.

“These providers will exploit every loophole available to take advantage of patients,” the Coalition Against Surprise Medical Billing said.

Other groups, such as the National Taxpayers Union, also joined the fray, siding with the doctors and hospitals.

“Unfortunately, the legislation continues to rely on a benchmark payment for out-of-network providers, an unacceptable form of rate-setting that will only limit access to care and lead to a system of government-picked winners and losers,” that group said in a statement Monday.

The American Hospital Association said when the agreement was first announced that it “remains highly problematic and would jeopardize patient access to hospital care, particularly in rural communities.” The AHA said the agreed-upon rate was “arbitrary” and would give “insurers an incentive to remove hospitals from their networks and force artificially low reimbursement rates.”

©2019 Bloomberg L.P.

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