AMA, MGMA to Congress: Don't hand power to insurers in surprise billing fix

Congress’ attempt to solve the surprise billing resolution has turned into a battle between providers and insurers.

More than 100 physician organizations fired the latest volley, urging Congress in a letter (PDF) released Thursday not to turn more power over to health insurers.

The groups, which represent hundreds of thousands of physicians, asked Congress to find a balanced approach as members hammer out legislation to solve the surprise medical bill issue that has resulted in patients receiving unexpected bills, sometimes for hundreds of thousands of dollars, for care they received by out-of-network providers.

Any law passed by Congress should hold patients harmless for any excessive costs but not hand over more market power to insurers, the groups said, advocating for an independent dispute resolution process rather than letting insurers establish a benchmark median rate for all out-of-network charges.

The letter was led by the American Medical Association (AMA) and signed by 110 other organizations that represent physicians and medical practices. Other groups signing the letter included the Medical Group Management Association, the American College of Physicians, the American College of Emergency Physicians and medical societies from across the country.

The groups said if Congress passes legislation that is tilted toward insurers, it could precipitate staffing shortages in rural areas and other underserved communities and lead to access problems for patients seeking hospital-based care from on-call specialists.

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“We are highly concerned that the rate-setting provisions in current bills further shift marketplace leverage to health insurers at the expense of providers,” the groups wrote in the letter sent to Senate Majority Leader Mitch McConnell and Senate Minority Leader Chuck Schumer and copied to leaders of House and Senate committees working on proposed surprise billing legislation.

“The health insurance market is already heavily consolidated, which can result in artificially low payment rates and anticompetitive harms to both consumers and providers of care,” they wrote.

Physician groups have advocated for an arbitration approach to surprise billing, which the letter said would incentivize health insurers to make fair payments for out-of-network care that is provided to their customers. The arbitration approach is similar to one being used in New York state. If an out-of-network provider receives a payment from an insurer they think is unfair, the provider and insurer will go to a dispute resolution system and then to “baseball-style” arbitration if they cannot negotiate a settlement. Both the provider and payer submit the amount they want for an out-of-network charge, and the arbitrator decides.

RELATED: Network matching, benchmarking remain major sticking points to surprise billing solutions

On the other hand, insurers favor the use of a benchmark median rate for all out-of-network charges. Similar to a California law, proposed legislation would allow insurance companies to base their payments to out-of-network providers on an insurer’s median in-network rate.

The letter pointed to Congressional Budget Office analysis that said the vast majority of healthcare is delivered inside patients’ insurance networks and more than 80% of the estimated budgetary effects of a benchmark system would result from changes to in-network payment rates.

“In other words, in-network providers who have not contributed to the problem will bear the impact of the rate-setting scheme,” the physician groups said.

The groups said an independent dispute resolution process should consider a number of factors in determining a mutually fair payment such as the complexity of the service rendered, the experience of the physician providing the service, the rate that physicians or other providers charge for the service in a geographic area and commercial insurance data from an independent and transparent source.

The letter also says legislation should establish strong network adequacy requirements so insurers cannot create such narrow networks that patients are pushed toward care that is out of network.