Two Surprise Billing Proposals Approved

February 18, 2020

The House Ways and Means Committee and House Education and Labor Committee debated and approved proposals to address surprise medical bills. These follow the “compromise proposal” released in December by House Energy and Commerce Committee Chairman Frank Pallone (D-NJ), Ranking Member Greg Walden (R-OR), and Senate Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander (R-TN).

GNYHA shares these committees’ goal of protecting consumers from surprise bills. Unfortunately, both the “compromise proposal” and the House Education and Labor Committee bills would resolve surprise billing disputes by paying providers a benchmark rate tied to median in-network rates, which GNYHA strongly opposes. A benchmark rate would give for-profit insurers significant leverage in negotiations with providers, and likely result in decreased payments to hospitals and limited access to care for patients.

The House Ways and Means Committee proposal, on the other hand, is a significant improvement over the other proposals. Most important, it doesn’t needlessly harm providers for the benefit of for-profit insurers. GNYHA appreciates that the House Ways and Means Committee responded to the concerns of hospitals and physicians by rejecting the use of harmful, unnecessary benchmark rate-setting provisions. GNYHA President Kenneth E. Raske released the following statement to support the legislation: “In addition to protecting consumers, the House Ways and Means Committee’s surprise billing legislation does not mandate a harmful benchmark payment rate. It is therefore a significant improvement over the other surprise billing proposals released to date.”

Instead of a benchmark rate, the Ways and Means Committee’s bill (Consumer Protections Against Surprise Medical Bills [H.R. 5826]) requires providers and insurers to negotiate for a period of at least 30 days to reach a payment agreement. During that negotiation, the parties are required to exchange certain information, including the insurer’s median in-network rate and the provider’s median reimbursement for the same service. The rate information would be stratified by line of business (individual, small group, large group, and self-insured) and provider/facility type. This is key, as payment rates can vary significantly between insurance products and types of institutions such as teaching and non-teaching hospitals.

If the parties cannot reach an agreement through negotiation, either party could seek resolution through a mediated dispute resolution process. Each party would submit a final offer to the dispute resolution entity, who will make a binding decision. The process allows providers to submit additional documentation to support the payment they seek and does not mandate a single benchmark payment at the median in-network rate. The legislation also requires that plans report multiple median in-network rates based on insurance markets and similar institutions, which should result in more appropriate bases for determining reasonableness. And requiring consideration of the individual provider’s typical reimbursement for the service delivered should also lead to more balanced decisions by the arbiter. GNYHA advocated strongly for both of those provisions. The legislation would begin to be implemented in 2022.

Importantly, like the other proposals, the Ways and Means bill would allow New York’s successful surprise billing law to continue to apply to State-regulated business, with any Federal law applicable to self-insured business.

We are extremely thankful for our allies on Capitol Hill who have fought for fair surprise billing legislation, including Ways and Means Committee Chairman Richard Neal (D-MA) and Representatives Joe Morelle (D-NY), Tom Suozzi (D-NY), Brian Higgins (D-NY), and Tom Reed (R-NY).

Any surprise billing legislation that passes Congress will be leadership-driven, and while it could largely resemble one of these proposals, the bill likely will have changes. GNYHA will remain extremely engaged on this issue and ensure that any legislation that is enacted is fair to providers and the patients they serve. For more information on what effective surprise billing legislation should accomplish, GNYHA’s surprise billing principles can be found here.