Insurers, hospitals diverge on how Congress should address surprise medical bills

Surprise bills
(Callie Richmond for KHN)

Surprise bills could shape up to be a contentious issue in healthcare.

Some of the largest groups representing health insurers sent a letter to Speaker Nancy Pelosi and other House leaders on Monday calling for legislation that would block physicians from sending surprise bills in case of emergency or when a patient had no choice in their provider. The letter, sent by America’s Health Insurance Plans (AHIP), also asks facilities be required to inform patients of their doctors’ network status and consent for out-of-network care.

They also asked for setting reimbursement rates, ensuring these protections apply to all health plans, and avoiding the use of costly arbitration that can keep consumers stuck in the middle. The letter was also signed by 17 organizations (PDF) including American Benefits Council, Blue Cross Blue Shield Association and the National Alliance of Healthcare Purchaser Coalitions.

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But it prompted a response just hours later from the Federation of American Hospitals (FAH) and the American Hospital Association (AHA) making it clear insurers—and not just providers—needed to be part of the solution around surprise bills.

RELATED: Insurer-backed coalition forms to push efforts to stem 'surprise bills'

"Consumers, health insurers, employers, and hospitals all agree and should seek a common solution," FAH President and CEO Chip Kahn and AHA President and CEO Rick Pollack said in a joint statement. "That solution is simple: patients should not be balanced billed, and they should have certainty regarding their cost-sharing obligations based on an in-network amount." 

The latter also called for a solution that would allow insurers and providers to retain their ability to negotiate appropriate payment rates.

"Not only is it a dangerous precedent for the government to start setting rates in the private sector, but it could also create unintended consequences for patients by disrupting incentives for health plans to create comprehensive networks."

It's the latest in the back and forth in the industry over who is actually to blame for surprise medical bills. Surprise billing, or the practice of charging patients for care that is more expensive than anticipated or not covered by their insurance, has received a flood of attention in the past year as other news organizations have undertaken investigations into patients’ most outrageous medical bills.

In January, President Donald Trump instructed administration officials to investigate how to prevent surprise medical bills, broadening his focus on drug prices to include other issues of price transparency in healthcare. Both Democrats and Republicans in Congress have introduced bills that would address surprise billing.

States have also been exploring policy options for how they might help mitigate the costs of surprise out-of-network billing. According to a recent report from the USC-Brookings Schaeffer Initiative for Health Policy, state's can consider a number of different approaches,  such as a "billing regulation,” which caps or sets limits on what out-of-network providers can charge patients in surprise situations.

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