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Rival surprise billing plan unveiled by Ways and Means

The American Hospital Association is against an earlier proposal because disputes would be settled through lower reimbursement benchmark rates.

Susan Morse, Managing Editor

The House Ways and Means Committee announced its own proposal to end surprise billing on Wednesday, in a rival plan to a Senate and House bill released on Sunday.

The Ways and Means bipartisan plan would first let insurers and providers  work out their differences without interference. If private market dynamics failed, a negotiated, structured process would then settle payment differences by taking into account payments made to similar providers for similar services in similar areas.

Uninsured patients-- or patients paying with cash-- would be able to access this process if they felt they were provided misleading cost information from a provider prior to seeking services.

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The party that loses the decision would pay a reconciliation process fee. In addition, a surcharge would be applied to providers and plans that use the process in excess of certain predetermined thresholds.

For states that have already addressed surprise billing, the agreement would let those protections remain in place.

Ways and Means Committee Chairman Richard E. Neal (D-MA) and Ranking Member Kevin Brady (R-TX) announced the agreement that would hold patients harmless for cost-sharing at the in-network rate to the emergency room or an out-of-network provider at an in-network facility.

Under the plan, any patient payments would count toward the in-network deductible and maximum out-of-pocket cost limits.

For all patients, the agreement improves information patients receive regarding networks and anticipated costs, provides consumers with a transition period of coverage when networks change, and prevents them from getting bills long after services were provided.


Hospitals do not like the earlier bipartisan, bicameral surprise billing agreement announced Sunday by Senate Health Committee Chairman Lamar Alexander (R-Tenn.), House Energy and Commerce Committee Chairman Frank Pallone Jr., D-N.J. and Ranking Member Greg Walden, R-Oregon.

The American Hospital Association is concerned about payment cuts under the Lower Health Care Costs Act of 2019 and said benchmark rates - based on a standard, fixed price - have not worked in the past. Lower reimbursement jeopardizes patient access to hospital care, particularly in rural communities, the AHA said.

The bill's dispute resolution would include arbitration.

"An arbitrary rate gives insurers an incentive to remove hospitals from their networks and force artificially low reimbursement rates, which limits access," the American Hospital Association said. "Moreover, such proposals would provide a huge windfall to commercial insurance companies at the expense of the nation's community hospitals."

The Taxpayers Protection Alliance also criticized the deal as federal price fixing.

"Even after the Medicare wage index led to the closure of dozens of rural medical facilities and Obamacare has systematically narrowed networks across the country, lawmakers want even more federal control over healthcare," TPA President David Williams said.

California tried price fixing as a way to end surprise billing and it led to a  number of mom and pop doctors' offices being swallowed up by other systems, he said.

The Coalition Against Surprise Medical Billing said it was in favor of a market-based benchmark but had serious concerns about arbitration being abused by out-of-network providers and private equity firms.

"While a solution based on local, median negotiated rates will protect patients and save hardworking taxpayers more than $25 billion, arbitration will do neither," the Coalition said

The Lower Health Care Costs Act of 2019 would also increase prescription drug competition and create price transparency, funds critical public health programs, including Community Health Centers for five years, and would increase the purchasing age of tobacco to 21, according to a released statement on the bill.

Now that there are two competing measures, fast passage of either is unlikely.


Surprise medical bills can cost patients thousands of dollars in unexpected charges. They are the result of a patient seeing an out-of-network provider, most often unwittingly and through emergency room treatment.

Most stakeholders are in agreement on the need to end surprise bills, but not how to get there.

Price transparency has been pushed by the Centers for Medicare and Medicaid Services, most recently in rules requiring both payers and providers to post their negotiated contracted rates.

The American Hospital Association and three other provider organizations sued the government over the rule. The other groups include the Association of American Medical Colleges, the Children's Hospital Association and the Federation of American Hospitals.


Chairman Neal and Rep. Brady said, "Patients deserve honest out-of-pocket estimates in advance of scheduled procedures, and there needs to be a fair resolution process for providers and insurers."
"I do not think it is possible to write a bill that has broader agreement than this among Senate and House Democrats and Republicans on Americans' number one financial concern: what they pay out of their own pockets for healthcare,"

Senator Lamar Alexander said. "The legislation includes proposals from 80 senators, 46 Democrats and 34 Republicans. It would end surprise billing of patients by creating a new system of dispute resolution that includes arbitration, provide nearly $20 billion for five years of funding for the nation's 1,400 community health centers, and lower the cost of prescription drugs and other medical services by requiring transparency and competition."

The Association of American Medical Colleges thanked Ways and Means leaders for reaching an agreement.

"We look forward to reviewing the legislation but welcome this bipartisan contribution to the ongoing conversation," said Karen Fisher, chief public policy officer.

Twitter: @SusanJMorse
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