Modern Healthcare: House Committee Proposes Ban on Surprise Medical Bills


May 14, 2019

Leaders of a U.S. House of Representatives committee on Tuesday unveiled draft legislation to ban surprise medical bills through a cap on on any out-of-network charges.

Notably, the House Energy and Commerce Committee’s bipartisan proposal doesn’t opt for arbitration to resolve pay disputes between hospitals, physicians and insurers — the approach hospitals and specialty physicians favor. Instead, insurers would pay out-of-network clinicians based on what they’d pay similar physicians in their networks.

Additionally, hospitals would have to get written permission from patients before letting an out-of-network physician treat them for a scheduled procedure.

At least one analyst said the measure would lower healthcare spending through cuts to physicians and hospitals.

“There is no question this proposal would transfer a bargaining power from providers to insurers — a fact that is sure to have provider groups up in arms,” said Benedic Ippolito of the American Enterprise Institute, who has been working closely on the issue.

In-network rates become insurers’ leverage point to negotiate lower payments for specialty physicians who want to contract with them, Ippolito said.

Lawmakers want stakeholder feedback by May 28, and specifically asked for ideas on how to ban the similar billing practices by air and ground ambulance companies. In a memo, staff said the committee “recognizes the need for solutions in these areas” as well. Air ambulances are regulated by the Transportation Department.

Beyond the provisions on surprise bills, the committee proposed grants to states to fund all-payer claims databases. The Senate health committee is considering a similar provision for its forthcoming bill package to address healthcare costs. The Senate committee will also propose a balance billing ban.

The House draft from Energy and Commerce Chair Frank Pallone (D-N.J.) and Ranking Member Greg Walden (R-Ore.) comes just days after President Donald Trump offered White House backing for the congressional effort to end balance bills.

The White House urged Congress to incorporate certain policy principles, including the mandate that patients receive only one hospital bill after treatment, which would have to include all the charges from the involved ancillary physicians. Hospitals and specialty physicians are lobbying hard against this idea since it would force them to change their contracting and potentially hit their bottom lines.

Trump and his officials are also pushing for more transparency. The discussion draft would require hospitals to give patients written and oral notice at the time of scheduling if they will be attended by an out-of-network clinician. The hospital would also have to tell the patients how much they would pay for an out-of-network charge.

Additionally, if patients never get advance notice that they will see an out-of-network doctor for practical reasons, they can’t receive a balance bill from a physician they didn’t “reasonably choose.”

As the draft circulated Tuesday morning, one physician group immediately hit back with a statement that urged lawmakers to consider arbitration. This is the method adopted in New York and other states, but critics warn it can bake inflated charges into insurance premiums and ultimately raise costs.

Dr. Sherif Zaafran, chair of the doctor lobbying group Physicians for Fair Coverage, argued that New York’s “Alternative Dispute Resolution” process is the only one with a “proven record of success.”