AHA finds fault in provider-friendly surprise medical billing deal that includes arbitration

Both the AH&LA and AAHOA released statements in support of the President’s call for bipartisan efforts to improve border security and ongoing job growth.
The American Hospital Association laid out several concerns with a major deal to end surprise medical billing, despite provider wins in the legislation. (Getty Images/Bill Chizek)

A new congressional deal to end surprise medical billing contains major wins for the provider industry, chiefly an arbitration process to settle out-of-network charge disputes.

The inclusion was a major win for providers as previous legislation relied on a geographic benchmark rate to handle disputes.

Despite that, some hospital groups say they still have major concerns with parts of the legislation, which could imperil lawmakers’ chances to get it approved by the end of this week.

The American Hospital Association (AHA) laid out a series of major concerns with the deal, announced Friday by key House and Senate committee leaders. Chief among them: whether the arbitration could be skewed by relying on public rates from Medicare or Medicaid and holding hospitals responsible for physician or professional claims.

“We have significant concerns with several of the provisions that would attempt to implement unworkable billing processes and transparency provisions that are duplicative and costly,” the AHA said in a letter to the leaders Sunday.

The AHA is concerned that arbitration could be skewed if the “arbiter is able to consider public payer reimbursement rates, which are well known to be below the cost of providing care.” The group called for a specific prohibition in considering such public rates.

RELATED: House and Senate panels reach provider-friendly deal to end surprise medical billing

Another major concern was the legislative text appears to “hold facilities responsible for physician/professional claims, even when a physician/professional is not employed by the facility,” AHA said.

The hospital may not know essential information like the billing rates between the physician and the insurance plan.

“In order to operationalize this, the facility would need to build the infrastructure to solicit bills from providers and issue payments,” the group added. “This would result in an unprecedented change in the relationship between independent hospitals and physicians and would require significant technology and legal resources.”

They want the final text to clarify independent providers are responsible for their own contracting and billing with health plans.

Another hospital group, the Federation of American Hospitals (FAH), cheered the “significant progress” made in the deal.

However, the legislation does need further “improvement to assure it is operationally practical and does not add undue burden,” said FAH President and CEO Chip Kahn in a statement Monday.

RELATED: HHS calls for congressional action on surprise medical bills but doesn't pick a side

Payers, on the other hand, were livid with the deal.

Officials at America’s Health Insurance Plans (AHIP), the insurance industry’s top lobbying group, said they were still looking into the bill.

However, they said, they strongly believe “any real solution must be clear and straightforward for consumers, and must protect patients by relying on fair, market-based prices based on locally negotiated rates —without loopholes,” AHIP President and CEO Matt Eyles said in a statement.

The group also pointed to arbitration systems set up by New York and Texas as examples of how private equity firms have found ways to game arbitration to still raise prices for patients.

House and Senate committee leaders expressed hope of including the surprise medical billing deal in an end-of-the-year spending package that must be passed by Dec. 18 to avoid a government shutdown. But, so far, congressional leaders have not committed to its inclusion.

If approved, the legislation would end a yearslong stalemate over how to end surprise medical billing.