May 30, 2019

Assessing Federal Legislative Proposals to Address Surprise Medical Bills

Efforts on Capitol Hill to identify a federal legislative solution to mitigate the occurrence and impact of surprise medical bills shifted into high gear over the last two weeks. With competing proposals in the House and Senate, lawmakers and their staff are actively engaging with various stakeholder organizations, including the American College of Radiology (ACR), to better educate themselves on the issue overall and understand the potential policy implications of the various proposals.

As this process evolves, the College continues to reiterate the importance of the below principles being utilized as a foundation for any federal legislation to address surprise billing. The College believes legislation based on these principles would provide strong patient protections, while simultaneously improving transparency, promoting access to appropriate medical care, and avoiding the creation of disincentives for insurers and health care providers to negotiate network participation contracts in good faith.

  • Create a mechanism for insurer accountability, including network adequacy standards
  • Establish limits on patient responsibility
  • Avoid benchmarking payments to Medicare or another arbitrarily low-set rate
  • Mirror viable state laws
  • Apply to all plan types

Overview of Recent Legislative Proposals

U.S. Senator Bill Cassidy, MD (R-LA), has focused on the issue of surprise medical bills since last summer. Following several rounds of stakeholder meetings and information gathering, Sen. Cassidy introduced the STOP Surprise Medical Bills Act (S. 1531) on May 16. The College is appreciative of Dr. Cassidy’s leadership on this issue and was pleased that his legislation incorporated several of the principles outlined above. While the ACR is supportive of the inclusion of an automatic or initial payment to providers, we are concerned that tying the payment to median in-network rates removes the incentive for insurers to negotiate in good faith and will likely compress future contracted physician payment rates. The ACR, along with others in the physician community, are urging any initial payment to reflect “commercially reasonable rates.” As of May 29, S. 1531 has 20 bipartisan cosponsors.

Leaders of the Senate Health, Education, Labor and Pensions (HELP) Committee have also unveiled the Lower Health Care Costs Act of 2019, a bipartisan discussion draft designed to reduce health care costs overall. While their draft takes aim at the entire health care delivery system, the proposal included three potential remedies (included in Title I) for the surprise medical billing issue.

They are:

  • In-Network Guarantee – Requires that an in-network facility guarantee to patients and health plans that every practitioner at that facility will also be considered in-network.
  • Independent Dispute Resolution – For surprise bills that are $750 or less, the health plan will pay the practitioner or facility based on the median contracted rate for services in that geographic area. For surprise bills that are greater than $750, either the health plan or the facility or practitioner can elect to initiate an independent dispute resolution process, using a third-party arbiter certified by the Secretary of Health and Human Services, in consultation with the Secretary of Labor.
  • Benchmark for Payment – The health plan will pay the practitioner or facility based on the median contracted rate for services in that geographic area.

In releasing the discussion draft, Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) are soliciting feedback on the outlined proposals. The College is preparing comments for submission to the Committee and will note that the surprise billing provisions (as written) are too simplistic and will disproportionately impact the provider community. As an alternative, the College will encourage Committee leadership to embrace the underlying legislative framework utilized in S. 1531, which represents a more comprehensive approach for mitigating surprise medical bills and increasing transparency in health care.

Lawmakers in the U.S. House of Representatives are also actively exploring solutions for this issue. On May 14, leaders from the Energy & Commerce Committee released a draft of the No Surprises Act . Like other legislative proposals, the No Surprises Act prohibits balance billing for all emergency services and patients would only be held responsible for the amount they would have paid in-network. To resolve payment disputes between providers and insurers, the bill would establish a minimum payment standard set at the median contracted (in network) rate for the service in the geographic area the service was delivered. At the Committee’s request, the College submitted comments relating to the draft legislation earlier this week. The ACR’s comments reiterated our concerns relating to the inclusion of arbitrarily low initial payment rates and addressed specific questions put forth by the Committee.

Finally, Representatives Raul Ruiz, MD (D-CA), and Phil Roe, MD (R-TN), led a bipartisan group of House lawmakers in releasing an outline of the Protecting People from Surprise Medical Bills Act. The legislative framework, released on May 23, closely mirrors the surprise billing law implemented in New York State. It would:

  • Ban the practice of billing patients for unanticipated out-of-network care;
  • Implement a ‘baseball-style’ arbitration model that identifies a reasonable payment rate when insurers and providers cannot agree on the cost of care;
  • Improve transparency by requiring health plans to clearly identify in-network providers and patients’ deductibles.

The framework put forth by Reps. Ruiz and Roe represents the most comprehensive and equitable resolution for the surprise billing issue to date. As such, the College issued a statement applauding the proposal and reiterating the ACR’s commitment to working with Congress on a final resolution for this critical issue.

The College’s Government Affairs teams expects continued legislative activity regarding surprise medical billing throughout the summer months as lawmakers attempt to reach consensus. Additional information and/or analysis will be provided as it becomes available.