Hospitals, doctors raise alarm over surprise billing legislation advanced by Senate lawmakers

Capitol building in Washington
The Senate Health, Education, Labor and Pensions Committee passed the Lower Health Care Costs Act by a 20-to-3 vote. (Photo by rarrarorro/iStock/Getty Images Plus/Getty Images)

Hospitals and physicians raised alarms over legislation aimed at tackling surprise billing voted out of committee on Wednesday, saying the measure could result in higher prices and fewer options for patients.

The Lower Health Care Costs Act was under consideration in the Senate Health, Education, Labor and Pensions Committee and passed 20 to 3. The bipartisan legislation included 54 proposals from 65 senators—36 Democrats and 29 Republicans—and also included provisions aimed at ensuring generics competition, eliminating pharmacy gag clauses and addressing public health concerns such as maternal mortality.

It is expected to go before the full Senate for a vote next month, said Committee Chairman Sen. Lamar Alexander, R-Tenn.

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When it came to the most controversial element of the measure—how to ensure that patients don't get stuck with surprise bills from out-of-network providers—Alexander said he and Sen. Patty Murray, D-Wash., supported the benchmark solution. Under that solution, doctors and hospitals that are out-of-network would be paid the median contracted rate that in-network doctors and hospitals receive for the same services in their local geographic area.

RELATED: One reason surprise billing solutions are so tricky for hospitals

“This is a change for me as I was inclined to support an in-network guarantee since I believe that’s the simplest solution. Some of my colleagues are inclined to support a new independent system of dispute resolution known as arbitration,” Alexander said. “The Congressional Budget Office has indicated the benchmark solution in this bill is the most effective at lowering healthcare costs, and Chairman [Frank] Pallone [D-N.J.] and ranking member [Greg] Walden [R-Ore.] have recommended this proposal to the House of Representatives.” 

Alexander also said the legislation will treat air ambulances the same as healthcare providers by using the local commercial market-based rate for in-network healthcare. 

Senators on the committee were urged to withhold any amendments which might threaten the bill's passage as it advances to the floor and potentially to conference committee since it was drafted similarly to legislation in the House.

However, among the amendments added before it advanced was a proposal by Cassidy. His amendment would call on insurance carriers to provide accurate and relevant information about which providers are in-network in a way that app developers might make as easy to check on a phone as ordering takeout.

"What this amendment does—and we’ve worked this out with the committee staff—would require on a real-time basis the insurance plans to at least post who is in network based upon their last interaction," he said. "Otherwise, there’s almost no protection for the doctors and the hospitals, and therefore, the patients under the way this is currently constructed."

RELATED: Solution to surprise billing should fall to hospitals, insurers—not patients, experts say 

Industry reaction

Federation of American Hospitals President and CEO Chip Kahn said his group supports the goals of the Senate legislation but said the bill "unfortunately misses the mark."

"We remain opposed to this legislative package as currently constructed and look forward to working with lawmakers on solutions that address health care affordability without limiting access," he said in a statement.

As hospitals and doctor groups shared similar opposition, many turned their attention to measures proposed in the House. Specifically, they began throwing their support behind the Protecting People From Surprise Medical Bills Act introduced on Wednesday by Congressmen Raul Ruiz, M.D. (D-Calif.) and Phil Roe, M.D. (R-Tenn.), which would implement the arbitration approach. Both Ruiz and Roe are physicians.

“The Protecting People from Surprise Medical Bills Act is gaining momentum because it includes the strongest patient protections of any surprise billing legislation proposed in the House or Senate,” Ruiz said in a statement. “Our bill creates the most fair and transparent system to end surprise bills—without picking winners or losers."

Several provider groups endorsed the House proposal.

“Physicians applaud the Senate HELP Committee for holding patients financially harmless for out-of-network services when they cannot choose in-network providers. However, we remain deeply concerned that arbitrary, government-set payment benchmarks championed by the health insurance industry will further undermine provider networks and devastate patients’ access to critical medical services," Robert W. Seligson, president of the Physicians Advocacy Institute, said in a statement. 

“As Congress continues discussing solutions, it would be shortsighted to endorse an approach that will curtail patients’ access to essential medical care, especially in an emergency," he said. "Artificial payment benchmarks give insurers even more power to refuse contracts with doctors, leaving more out-of-network and pushing down payments to levels even below the true cost of medical care across the board."

Envision, which is a national hospital-based physician group, also released a statement of support for the Ruiz-Roe proposal. 

"The Protecting People from Surprise Medical Bills Act would protect patients from financial ruin after an emergency and ensure they receive immediate and high-quality care when they need it," they said in a statement. "We remain hopeful that members on both sides of the aisle can come together with doctors and insurers alike to establish an independent dispute resolution process, which is the only proven solution to protect patients' access to quality, affordable medical services."

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