Surprise Medical Bills Give Both Parties an Unexpected Opportunity to Agree

https://www.nytimes.com/2019/05/24/upshot/surprise-medical-bills-bipartisan-lawmaking.html

Version 0 of 1.

President Trump and House Democrats are fighting over the Affordable Care Act as hard as ever, with Mr. Trump still vowing to repeal it and House Democrats passing bills to bolster it. And yet both parties have found a health issue they can agree to fight together: surprise medical bills.

The question is how.

Washington finds itself having a genuine policy debate that isn’t driven by party line. The president gave a speech this month about the need for action, standing in front of patients who’d received huge surprise bills. Various lawmakers from the House and the Senate have introduced bills with solutions — all bipartisan. Some of them include elements that might seem unusual for Republican proposals: price setting, if only in limited circumstances.

After a midterm election heavy with talk of health care, everyone wants to be seen as doing something to tackle parts of the system that seem costly and unfair.

Mr. Trump plans to issue an executive order next week, according to The Wall Street Journal, that would bring more transparency to patients about the costs of their care. One of the recent bills, from Lamar Alexander of Tennessee and Patty Murray of Washington, the leaders of the Senate Committee on Health, Education, Labor and Pensions, also includes some provisions that would enhance price transparency in other aspects of patient care.

Industry officials are likely to fight those broader efforts, which they argue undermine their negotiations. But all the major players — hospitals, doctors, and insurance companies — have come on board for a solution to surprise bills, which occur when a hospitalized patient is treated by a doctor who is not in the same insurance network as the hospital, and is billed for the difference.

Loren Adler, an associate director at U.S.C.-Brookings Schaeffer Initiative for Health Policy, said that lawmakers he talks to immediately understand. “It’s facially absurd” that certain doctors can spring large, surprise bills onto patients who carefully choose their hospital. Compared with most issues he discusses with legislators, he said, “it’s just a lot more intuitive of a problem.”

But just because everyone agrees that the problem should be solved doesn’t mean there’s broad agreement about the right solution.

Currently, there are four public pieces of legislation on the issue. And legislators expect more hearings, debate and revision. The bill’s authors have been holding sessions with professors and policy experts — and with lobbyists for insurers, hospitals and doctors, all of whom would be affected by such a law and have strong preferences about how it should be written.

“The real fight is between industries, not Republicans and Democrats,” said Shawn Gremminger, the senior director of federal relations at the consumer advocacy group Families USA.

Several studies have found that about 20 percent of patients seen in an emergency room or admitted to a hospital are treated by an out-of-network doctor. Although the practice is fairly common, research has also shown that it’s not random: A small number of hospitals use doctors who routinely go out of network. Surprise billing has emerged as a major voter concern, and is showing up in public opinion surveys.

What should happen when an insurer and a doctor can’t agree on a price? For most health care services, there is pressure to make a deal because both sides benefit. But because people generally don’t pick their own emergency room doctor or anesthesiologist, these types of doctors can walk away from the bargaining table without losing any patients.

All of the recent pieces of legislation share one crucial feature. In each, the patient must be taken out of the middle; doctors would be barred from billing them for fees that insurance won’t cover. In cases when patients can decide about their care in advance, a hospital must notify them about any out-of-network doctors related to their care and obtain consent.

But there are various ways to resolve disagreements between a doctor and an insurance company over the right payment.

One solution is to pay out-of-network doctors a set price, based on amounts that other doctors have negotiated with insurance companies. That’s the approach embraced in recent draft legislation written by the bipartisan leadership from the House Energy and Commerce Committee. Under that bill, if doctors and insurers can’t agree on a price, the doctor will get the median price paid to in-network doctors in that area.

Two bills, one from a bipartisan group of senators including the Republican Bill Cassidy of Louisiana and the Democrat Maggie Hassan of New Hampshire, and another from a bipartisan group of House legislators, would let doctors and insurers who disagree bring their dispute to a professional arbiter. Each would offer the arbitrator a price, and the arbitrator would pick one.

A last option, which the White House appears to favor, would require doctors who work in hospitals to sign contracts with the same set of health insurers.

In general, the insurance companies like the price-setting approach, and the medical providers like arbitration. The constituency for the contract approach is mostly professors.

The most recent bill, from Mr. Alexander and Ms. Murray, has yet to commit to a solution. Their draft bill asks for comments on all three options.

Which will Congress pick? The answer probably depends a bit on how comfortable legislators are with the idea of price setting. If Congress dictates how much out-of-network doctors should be paid, it will affect negotiations between doctors and insurance companies. Currently, a doctor who doesn’t like an insurance company’s offer can walk away from the negotiating table and just charge higher prices to patients directly.

Those dynamics tend to drive up the negotiated prices for their work, said Ben Ippolito, an economist at the American Enterprise Institute, who has spoken with legislators about the issue. Over time, he said, it is likely that more doctors would come to be paid something similar to the benchmark, as insurers know that they won’t have to pay more if they fail to make a deal.

But experts note that arbitration could lead to a similar clustering of prices. In choosing between bids, arbiters will need to decide their own benchmarks for what a reasonable price looks like, and they will tend to pick prices close to that number.

In New York, which set up an arbitration system five years ago, very few claims make it to arbitration. The theory goes that, as players come to understand the preferences of the arbitrators, they will settle the bill themselves at a similar rate. Those who like the approach say it is less heavy-handed than setting a standard price. Critics say that arbitration is simply a more complicated way to set prices.

The third approach, requiring doctors who work in a hospital to accept all the same insurance as the hospital itself, would eliminate the possibility of a surprise bill, rather than establishing a process for resolving the dispute later. Advocates of this approach say, in practice, that it will probably mean hospitals will do much of the negotiating on behalf of doctors who work with them.

Though there’s a lot to be figured out before Congress’s flurry of bill releases leads to a law, the breadth of the consensus has made optimism high among all the major players.

“I can’t think of another single issue that has been getting this level of attention, that has this level of bipartisan support, and where across the health care spectrum you do, at the very least, have consensus we need to address this,” said Adam Beck, vice president for employer health policy and initiatives at the health insurance trade group America’s Health Insurance Plans.