Analysis: What to expect after the initial release of draft “surprise bill” legislation

After months of waiting, last week we got not one, but two bi-partisan drafts of bills aiming to prevent patients from receiving surprise bills in select situations. And as a lagniappe, the Senate bill has a price-transparency requirement.

On May 14, the House Energy and Commerce committee released a draft of the No Surprises Act, according to an article by The Hill. The legislation would limit patients who receive out-of-network emergency care to the in-network amount. The same limitation would apply when a patient receives elective services at an in-network facility from out-of-network “non-facility-based providers” without the patient consenting to receive a “balance bill.” Out-of-network providers who balance bill patients in emergency situations or without consent in elective situations would be subject to the Civil Monetary Penalties Law and fined. The amount is not defined in the draft legislation. 

Further, it appears that under no circumstances will an out-of-network “facility-based provider” be allowed to balance bill patients. The bill defines facility-based providers as “emergency medicine providers, anesthesiologists, pathologists, radiologists, neonatologists, assistant surgeons, hospitalists, intensivists, or other providers as determined by the Secretary.”  The bill would establish a minimum payment standard set at the median in-network rate for the service in the geographic area in which it was delivered. 

Not to be left out, Senators Bill Cassidy (R-La.), Maggie Hassan (D-N.H.), and others introduced the more cleverly named STOP Act (Stopping the Outrageous Practice of Surprise Bills Act) on May 16, according to an article by The Hill. The bill would protect patients from being balance billed when receiving emergency care at an out-of-network facility or by an out-of-network provider when elective healthcare services are provided by out-of-network providers at in-network facilities, and when receiving additional healthcare services at an out-of-network facility following emergency care when the patient is not able to travel without medical transport to a different facility. Additionally, patients that receive out-of-network laboratory or imaging services ordered by an in-network provider at their office, are held harmless and protected from surprise bills. Like the House bill, providers who violate the ban on balance billing in the defined circumstances would be subject to Civil Monetary Penalties. 

In the Senate bill, under any of the circumstances described above, the provider would be paid the median in-network rate. The provider or plan can dispute the amount through an arbitration process like what is currently used in New York State. Beyond providing for an arbitration process to dispute the payment amount, the Senate bill also includes a price-transparency requirement. 

Providers and health plans are required to tell patients or enrollees the expected cost sharing for the provision of a specific healthcare service, including services reasonably expected to be provided in conjunction with it (e.g. laboratory work) within 48 hours of request.  Health plans will make available price information available online for services provided at different sites of care within its network to enable patients to know prices up front.

If a state has existing legislation related to surprise bills, both bills would allow the state to continue using its approach or adopt the federal approach. 

Takeaway

And there’s so much more to come. We are still expecting draft legislation from Senator Lamar Alexander (R-Tenn.), the chairman of the Senate Health Education Labor and Pensions Committee, which has jurisdiction over the issue in the Senate, and Congressman Joe Morelle (D-N.Y.). Congressman Morelle is expected to introduce legislation based on the arbitration model used in his home state of New York. Also, the House Ways and Means Health Subcommittee is holding a hearing on surprise bills May 21. 

It’s been clear for a while that something to relieve the consumer burden of surprise bills was going to get passed. And now we’re starting to see the outlines of what the package might look like. 

There’s plenty that can happen between now and the time a bill makes it to the President’s desk. However, given that both draft bills apply a payment cap to out of network providers, which is favored by the administration, it’s likely this will be part of any final bill. From a consumer standpoint, what services are covered is still clearly a work in progress. Absent, so far, from the drafts is any mention of ambulance (air or ground) services. 

What wasn’t expected was the transparency requirement in the Cassidy-Hassan bill. It will be interesting to see if this provision is in the draft of Senator Alexander’s bill. My guess is this has a good shot at making it into the final package if and when a bill makes it to the President’s desk. 

Increased transparency is a rallying cry for the administration and has bi-partisan support. As an example, Senator Ron Wyden (D-Ore.), ranking member of the Senate Finance Committee, introduced, according to a Healthcare Dive article, the Health Care Price Check Act. The bill requires insurers, including MA plans, to offer an online tool and 800 number for members to check the out-of-pocket costs for drugs and services provided by in-network providers. It would also require plans to tell patients when a provider is out-of-network and to also supply quality information on providers.