Congress Moves One Step Closer to Passing “Surprise Billing” Legislation

Prospects for the passage of legislation banning “surprise billing” of patients before the presidential election advanced significantly on Feb. 12 with the powerful House Ways and Committee unanimously voting in favor of the Consumer Protections Against Surprise Medical Bills Act. The bipartisan bill would mandate that patients receive an upfront estimate of treatment services costs, along with notification about the provider’s network status.

The Billing Dispute Resolution Controversy

The idea of protecting patients against surprise bills after they’ve been treated has a lot of traction with both parties. In the past two years, numerous bills have been proposed. For their part, providers don’t object to the idea of ending surprise billing but differ on how that should be done. One of the key points of difference is with regard to settling disputed amounts.

Hospitals want disputes settled via arbitration rather than reference to benchmark rates. Accordingly, they support the Ways and Means bill because it would create an arbitration process for insurers and providers to work out disputed amounts.

Physicians are more skeptical on arbitration and want safeguards to ensure that the process takes into account into account physician data provided by an independent data collection entity in the interest of fairness. “We support the underlying mechanism for resolving these disputes, including the eligibility of all disputed claims for negotiation and mediation, noted American Medical Association president, Dr. Patrice A. Harris. “We also appreciate that the mediator must consider a wide range of supporting information submitted by physicians in rendering a final determination.”

Physicians Advocacy Institute President Robert W. Seligson stated the case even more bluntly. “Using insurers’ payment data to resolve disputes would undermine patients’ access to important medical care, because, as the Congressional Budget Office recognized, unrestrained marketplace clout will drive rates down artificially, sometimes below the cost of medical services,” he stated.

The Narrow Networks Concern

As the Institute’s remarks reveal, the underlying concern for physicians is the prospect of further narrowing and reduced availability of health networks, which they contend is responsible for the surprise billing problem in the first place. Thus, the Association of American Surgeons and Physicians came out against the Ways and Means bill, specifically its requirement to not allow patients to be charged more than the in-network cost-sharing amount which would narrow provider networks even further.

The Lab Industry Perspective

Of course, all of this has a direct impact on labs. At the heart of the surprise billing problem is “balance-billing,” i.e., billing patients for the difference between what the provider charges for the service and the hospital’s contract reimbursement rate with the payor. According to a recent study, clinical labs, anatomic pathologists, radiologists and anesthesiologists are among the providers that most frequently engage in balanced billing. In addition to imposing hardship on patients who thought they were receiving care from in-network medical facilities, this practice makes the industry look bad. All of this has fed the drive for surprise billing legislation.