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

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A report from the Department of Health and Human Services lays out the three pathways Congress could take to combat surprise medical bills. But it doesn't endorse one. (Getty Images/Bill Chizek)

A report from the Department of Health and Human Services (HHS) urges Congress to enact legislation to protect patients from surprise medical bills.

But the report (PDF), required by an executive order President Donald Trump signed in June 2019, does not weigh in on which bill Congress should adopt.

Lawmakers have been in a stalemate for more than a year over legislation to combat surprise billing. A massive sticking point has been how to pay providers for out-of-network charges.

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“The problem is well understood,” the report from HHS said. “There is bipartisan support that patients should not be subject to surprise medical bills.”

The report outlines three major pieces of legislation that offer varying ways to address out-of-network charges but declines to offer an endorsement of one of the bills.

RELATED: Business, health groups press Congress to include surprise billing in next COVID-19 package

Each bill would take patients out of negotiations between providers and payers on surprise bills and requires a patient to consent to nonemergent, out-of-network care.

But the bills differ on paying providers. A compromise bill between the House Energy and Commerce Committee and the Senate Health, Education, Labor and Pensions (HELP) Committee would set a benchmark rate for out-of-network charges, and any claims over $750 would go to a “baseball-style” arbitration process that selects an amount.

A separate bill from the House Education and Labor Committee offers a similar approach.

But legislation from leaders in the House Ways and Means Committee doesn’t offer a benchmark. It calls for voluntary negotiations between payers and providers over a 30-day period, and, if no agreement is reached by then, they go into mediation; there is also no minimum amount that triggers this process.

The distinction is critically important. Providers favor arbitration over a benchmark, as they believe insurers could game the rate to charge higher prices. Insurers, in turn, believe the same thing about arbitration.

Congress appeared poised to finally address the issue after the Energy and Commerce and HELP committees unveiled their proposal in December and hoped to insert it into an end-of-the-year spending package. But Ways and Means introduced its own compromise, and the stalemate continued.

Surprise medical billing legislation has been largely sidelined by the COVID-19 pandemic as lawmakers are considering another relief package to help the economy.

Congress has to step in as HHS oversight only extends to Medicare and Medicaid plans, which are not generally an issue as federal law tightly controls how much balance billing is permitted in the program, HHS said.

RELATED: Private equity firms in Congress' crosshairs with legislation calling for transparency

HHS also highlighted the lobbying war that has erupted over the issue. As hospitals rely on third-party staffing firms to fill specialties such as anesthesiology and urology, private equity firms propping up these staffing companies have taken a leading role fighting legislation with a benchmark rate.

The report highlighted Doctor Patient Unity, a coalition of doctors' groups that has spent $58 million on TV and radio ads since last summer to influence the issue.

“Research shows that when private equity firms enter a market the rate of out-of-network billing increases by large percentages: 66% for Envision/EmCare and 13% for TeamHealth,” the report said.

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