Congress revives surprise billing debate with proposal for 'mediation'

A major House committee has unveiled largely provider-friendly legislation to tackle surprise medical bills

The House Ways & Means Committee released the legislation on Friday as a bid to end an impasse over how to handle surprise billing with a proposal to use a "mediation" process to handle disputes.

“We create a more balanced negotiation process to encourage all parties to resolve their reimbursement differences before using the streamlined and fair dispute resolution process,” said Chairman Rep. Richard Neal, D-Mass., and Ranking Member Kevin Brady, R-Texas, in a statement.

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But the legislation is sure to infuriate payers. 

Providers and payers have been at odds for months over how providers should be paid for out-of-network payments. Payers want out-of-network payments linked to a benchmark rate, but providers want a “baseball-style” arbitration process where both parties submit an amount and an independent arbiter picks one.

Ways & Means wants to use a two-step process for resolving disputes.

First, either the provider or payer can start a 30-day period to resolve the dispute and the parties must exchange the required information. If the parties don’t reach a resolution, then either can kick-start a mediation process administered by a third party. 

“During mediation, the parties will present the best and final offers along with any supporting information to the mediator, who will consider the median contracted rate specific to the plan, and for similar providers, services and geographic areas,” according to a summary of the bill.

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The mediator will then make a decision on an amount if the payer and provider can't reach a consensus after negotiations. The mediator can’t consider “usual and customary charges or billed charges, and other guardrails ensure a fair and reasonable process," the bill summary says.

Another major change is that there would be no minimum amount to start the negotiation process. Ways & Means’ bill also proposes giving patients an “advance explanations of benefits” which provide an honest cost estimate on which providers will “deliver their treatment, the cost of services and provider network status,” a summary said.

The hospital industry has already voiced support for the measure. 

The legislation will enable the "healthcare community to settle payments without unnecessary rate setting," said Federation of American Hospitals President and CEO Chip Kahn, in a statement.

This is the latest attempt by Congress to address the surprise billing problem. 

Compromise legislation introduced in December in the House Energy & Commerce Committee and Senate Committee on Health, Education, Labor and Pensions would use a benchmark rate. However, it included an arbitration backstop for disputes on bills of $750 or more.

The compromise bill sought to bring together competing proposals in the House and the Senate that favored arbitration. However, the House Ways & Means committee rebuked the compromise last year and announced it was working on its own legislation.

It remains unclear if Energy & Commerce or HELP will support the new legislation.

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The leaders of both committees released a measured statement on Tuesday in response to the legislation, saying they “look forward to working together to deliver a bill to the president’s desk.”

The House Education and Labor Committee is also working on its own legislation on the issue, but nothing has been released yet.

Lawmakers likely have a few months to iron out any differences and reach a compromise. Funding for several health programs expires on May 22, and lawmakers have said that the must-pass package could be a vehicle for other bills such as surprise billing to ride.