Search for federal funding driving surprise bill legislation: advisers

• An effort to garner federal savings to fund other healthcare programs is driving legislation to limit surprise bills.
• The savings are driven by a rate-setting approach opposed by providers because it would give excess leverage to health plans.
• The Trump administration is expected to stand behind its proposed requirement for hospitals to release rates negotiated with health plans.

A pitched battle in Congress this year over legislation to eliminate at least some surprise healthcare bills is driven by a search for funding for other federal healthcare programs, and the strength of that drive will determine if a bill is enacted this year, according to former congressional staff.

“In a time … that Congress is looking for savings to pay for certain kinds of spending, that will be an important factor” in the fate of surprise bill legislation, said Yvette Fontenot, a partner at consultancy Avenue Solutions and a former Obama administration official.

Among the surprise billing legislation under consideration, a measure approved by the Senate Health, Education, Labor and Pensions Committee in July would provide $24.9 billion in 10-year savings according to an estimate of the nonpartisan Congressional Budget Office (CBO). The savings would generally come from reduced subsidies for Affordable Act marketplace plans as provisions of the bill drive down provider payments.

Different versions from multiple committees in the House of Representatives are expected to provide different projected savings amounts.

Fontenot said Congress was looking for such savings to pay for unrelated healthcare programs.

Rodney Whitlock, PhD, a vice president at McDermott + Consulting and a former Senate healthcare staffer said both the surprise bill legislation and a separate drug price reduction bill could provide “tens of billions of dollars,” or TOBOD in federal savings.

“You get excited because I can do some real policy with TOBOD,” Whitlock said at a media briefing also attended by Fontenot and sponsored by the Alliance for Health Policy.

Pushback from providers

But those projected federal savings also have fueled the provider opposition to the surprise bill legislation that take the approach of the Senate health committee bill. That approach would use benchmarks to set payments in such billing disputes, which providers fear would increase health plan leverage in their rate negotiations.

“We also know that when you have bills that are TOBOD, like drug pricing and surprise billing, not surprisingly you have people who don’t like that, so you see opposition to some of those bills,” Whitlock said.

The legislative battle over surprise bill legislation this fall will be between those who want such funds for other programs and those who don’t want to give up the funds, he said.

One complication is that federal legislators may offer to use those surprise bill projected savings to fund the so-called Medicare extenders—a package of programs for providers and other that need to be re-authorized every two years—or to pay for delaying a planned Medicaid pay cut, Fontenot said.

Outlook for release of negotiated rates

The Medicare Outpatient Prospective Payment System CY20 proposed rule would require all nonfederal hospitals to post online their gross charges and payer-specific negotiated charges.

Hospitals have raised a range of concerns about the proposal and expected to push for its withdrawal during the rule’s comment period. But that is unlikely to deter the Trump administration, said Fontenot. 

“My understanding is that there is very strong support within the administration for this type of policy, so my guess would be that it does get finalized in the final rule with limited changes made to it,” Fontenot said.

But Whitlock joined providers in questioning the proposal. Problems with the rule, he said, included confusion over what prices the rule requiring providers to post and how useful the information will be to consumers.

“For many consumers, knowing that can be incredibly irrelevant,” Whitlock said. “It’s not a panacea and people should be careful with anyone who is selling that it is.”