Legislative fight over surprise billing is nearing an end, congressional aide says

• Congressional negotiators are close to a compromise on final legislation to address surprise bills.
• A key sticking point is the dollar-value threshold for billed amounts to qualify for arbitration instead of rate setting.
• The final deal is likely to advance as part of an end-of-the-year government funding package.

Members of Congress are close to finalizing surprise medical bill legislation by resolving differences that have split health plans and providers during the process, aides said Wednesday.

Members of Congress “are closer than healthcare stakeholders would have you believe,” said Adam Buckalew, a senior aide on the Senate committee overseeing the issue.

The Senate Health, Education, Labor and Pensions (HELP) Committee and two House committees have passed differing legislation to mitigate unexpected bills for services obtained from out-of-network providers working at in-network facilities. The anticipated next step is House consideration of a combined bill.

 Most of the advancing legislation would resolve surprise bills by using some type of rate-setting approach, which is backed by health plans and opposed by most providers. One House bill included a provider-favored amendment to allow arbitration for some larger charges. Some senators are pushing for a more robust arbitration process to be required.

According to senators and staff representing various sides of the debate, remaining areas of disagreement among members of Congress involve:

• Determining the minimum dollar amount needed for disputed charges to qualify for arbitration
• Deciding whether to allow many small charges to be combined to qualify arbitration
• Addressing health plan concerns that arbitration would fuel cost inflation
• Preventing adverse financial effects that could close rural hospitals
• Extending the bill’s authority to cover air ambulance charges

Among provisions that are off the table, according to some congressional aides, are using billed charges to determine payment and sharply reducing the threshold for moving billing disputes to arbitration.

Sen. Bill Cassidy (R-La.) said at a Bipartisan Policy Center event on surprise billing that if the rate-setting version that has advanced out of committee in the Senate becomes law, then rural hospitals will close and so “probably” will some in urban areas.

The arbitration push continues

Cassidy and Sen. Maggie Hassan (D-N.H.) have pushed the provider-supported arbitration-style approach to resolving out-of-network bills. They said they continue to discuss adding arbitration to the Senate bill sponsored Sen. Lamar Alexander (R-Tenn.), chairman of the HELP Committee. The Alexander bill primarily relies on a rate-setting approach, which is opposed by hospitals and other providers over concerns it could cause a downward spiral in payment rates.

Hassan said their approach was based in part on the experience of 16 states with arbitration laws for settling out-of-network billing disputes in state-regulated plans. In  New York, the Department of Financial Services recently reported the law resulted in a decrease in insurance premiums and relatively few instances of disputed bills even going to arbitration.

However, the New York regulatory agency also found that arbitration decisions were split between health plans and providers. The adjudicated amount averaged 8% more than 80% of physician charges — the benchmark used in arbitration decisions — when providers won, compared with 11% less than the benchmark when health plans won. The New York law does not cover hospital bills.

Buckalew said such findings raise concerns that arbitration could increase overall healthcare spending. That could derail any legislation because President Trump has said any legislation to address surprise billing cannot increase spending. 

Arbitration could help fund other healthcare programs

Cassidy noted that his arbitration approach, which uses a different starting point than the New York law, was the centerpiece of his alternative surprise-bill legislation, which the nonpartisan Congressional Budget Office (CBO) projected would reduce federal spending by about $17 billion over 10 years. Cassidy said such savings could provide funding for other congressional health priorities during end-of-the-year spending negotiations.

“That’s part of the momentum that could be created” to advance the arbitration approach, Cassidy said.

However, congressional aides noted that CBO projected the approaches that use rate setting would save even more than the arbitration approach.

The private-equity push isn’t helping

The effort to add arbitration language to the final surprise bill legislation has been complicated by a high-profile lobbying push by private-equity firms that own some specialty physicians and oppose a rate-setting approach, Hassan said. Those entities, which Cassidy said own 6% of physician practices, even bought a TV ad in Washington, D.C., during the World Series.

“These dark-money ads don’t help the discussion,” Hassan said.

Cassidy said those investors have become a convenient “boogeyman” that advocates of a rate-setting approach have used to “frame the entire issue.”