Congress is eyeing 3 paths to end surprise billing. Here's what they look like

The House of Representatives is in the middle of trying to decide which three pieces of legislation to endorse that will end surprise medical bills.

All three have advanced out of their respective committees, with two of them advancing this past week, but some differ considerably in terms of how providers will be paid for out-of-network charges.

Below is a quick rundown of what each House committee wants:

Creating a 'backstop'

Two powerful congressional committees, the House Energy and Commerce Committee and the Senate Health, Education, Labor and Pensions (HELP) Committee, released a major compromise late last year to address surprise medical bills.

The bill would use a benchmark median rate to handle any out-of-network charge.

But the legislation would create an “arbitration backstop” for any out-of-network charge of $750 or more.

The bill has gotten major pushback from hospital and doctor groups that say insurers can game the benchmark median rate to force providers to get lower payments. Insurers largely oppose arbitration because they believe it will lead to higher prices, pointing to state laws such as New York's that require arbitration.

'Mediation' is the new arbitration

The House Ways and Means Committee decided to go its own way and came out with legislation last month far more favorable to providers. The bill, which advanced out of committee earlier this week, would give providers and insurers 30 days to work out any dispute over an out-of-network charge.

After those 30 days, the two parties would go into a “baseball-style” arbitration process where both sides offer an amount and an independent party chooses one. But the committee decided not to label the process arbitration and instead is calling it mediation, even though a third party will pick a final amount after a round of talks.

In a major change from the House Energy and Commerce and HELP bill, the arbitration process can start at any amount. The Senate and House bill would trigger arbitration for bills over $750.

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The nonpartisan Congressional Budget Office (CBO) estimated earlier this week that the legislation would lead to roughly a 0.5% to 1% decline in premiums in markets that have a lot of surprise medical bills.

CBO estimated that under the legislation, the average payment rates for “both in- and out-of-network care would move toward the median in-network rate, which tends to be lower than average rates.”

Increasing transparency on out-of-pocket costs

The House Education and Labor Committee advanced legislation Tuesday that is similar to the Energy and Commerce compromise. It would set up a benchmark rate for out-of-network costs for amounts less than or equal to $750.

Any amount above that rate would be subject to an independent dispute resolution like arbitration for any bills above $750, just like Energy and Commerce.

But the bill would also include several provisions aimed at improving transparency, such as requiring plans to provide up-to-date provider directories and boost transparency on in- and out-of-network deductibles and out-of-pocket limits.