House Subcommittee Debates Medicaid DSH, Surprise Billing

July 15, 2019

The Energy & Commerce Health Subcommittee last week debated and advanced several health care bills to the full Committee, which GNYHA expects will take up these this week. Most importantly, the Committee considered an amendment to partially repeal the Medicaid disproportionate share hospital (DSH) cuts, and the Committee’s surprise billing proposal, the No Surprises Act (H.R. 3630).

On Medicaid DSH, Committee members Joe Kennedy (D-MA), Eliot Engel (D-NY), Billy Long (R-MO) and Richard Hudson (R-NC) introduced an amendment that would repeal the $12 billion in Medicaid DSH cuts scheduled for Federal fiscal years (FY) 2020 and 2021 in addition to reducing the scheduled FY 2022 cuts from $8 billion to $4 billion. The amendment also includes provisions that would mandate a study about DSH allotments and publishing additional data from DSH hospitals. The amendment was passed by voice vote with no audible objections. GNYHA strongly supports the significant reduction in Medicaid DSH cuts included in this amendment.

GNYHA thanks Congressman Engel for his continued leadership on this issue. In addition to spearheading a bipartisan letter in support of reducing the Medicaid DSH cuts alongside Congressman Pete Olson (R-TX) earlier this year, which received over 300 signatures and played an important role in illustrating the bipartisan support for Medicaid DSH funding, Congressman Engel used his opening statement to discuss the importance of this program.

Committee Chairman Frank Pallone (D-NJ) and Ranking Member Greg Walden (R-OR) began the debate on the No Surprises Act, emphasizing their support for this bipartisan legislation and their belief that the bill will become law. GNYHA strongly supports Federal surprise billing legislation, and was deeply involved in the design and enactment of New York State’s groundbreaking, highly successful surprise billing law. However, GNYHA is deeply concerned with a major flaw in the No Surprises Act that would allow insurers to pay hospitals median regional in-network rates for out-of-network hospital bills. This benchmark rate proposal strongly favors national, for-profit insurance companies at the expense of community hospitals in contract negotiations. Why should an insurance company ever contract with hospitals—or negotiate acceptable rates—if they can merely pay in-network rates in the absence of a negotiated contract?

Fortunately, a large bipartisan group of Committee members individually pushed back on the legislation in its current state and expressed support for amending the bill to include some sort of arbitration or Independent Dispute Resolution (IDR). The strongest critic of the bill, Representative Larry Bucshon (R-IN), specifically referenced the success of New York’s law, saying that any legislation without arbitration will have unintended consequences that will result in lower insurer payments to providers. Chairman Pallone said that he was willing to discuss solutions that address Committee member’s concerns.

It remains unclear what final surprise billing legislation in both the House and Senate will look like. GNYHA’s considerable efforts have included circulating a position paper on surprise billing, which outlines what an effective, comprehensive surprise billing law should accomplish.

The Subcommittee also approved several other measures, including a funding extension for the Community Health Center Fund and National Health Service Corps, and a funding increase for Puerto Rico’s Medicaid program.