House Committees Advance Competing Bipartisan Surprise Medical Billing Measures

February 14, 2020

The House Education and Labor and Ways and Means Committees approved separate surprise billing proposals, forcing lawmakers to square the proposals and come to a compromise on the best way to resolve payment disputes between providers and payers.

The Education and Labor proposal, passed by a bipartisan vote of 32 to 13, includes:

  • Setting a median in-network contracted rate benchmark for emergency services and facility-based providers;

  • An option for the provider to appeal the contracted rate for services with a median contracted rate that exceeds $750 or air ambulance services that exceed $25,000; and

  • Baseball style arbitration in the absence of a settlement, which explicitly prohibits billed charges to be considered.

The Ways and Means proposal, passed by voice vote, includes:

  • Open negotiation between the provider and the insurer for all out-of-network services;

  • A provision which requires the provider and insurer to submit the median reimbursement rate for the item or service; and

  • Baseball style arbitration if an agreement is not made within 30 days.

The White House has weighed in on the issue warning that overuse of arbitration will lead to an increase in health care costs, seemingly favoring the approaches outlined by the House Energy and Commerce and Education and Labor committees over the Ways and Means proposal.

Both proposals will save the federal government money.  The CBO has estimated that the Ways and Means arbitration-only proposal will save the federal government $17.8 billion over 10 years and reduce premiums by 0.5% and 1%.  While it has not released a formal score for the Education and Labor proposal, CBO expects it will save $24 billion and reduce premiums by 1% over 10 years.

Takeaway: These proposals will also need to be reconciled with the House Energy and Commerce and Senate HELP proposals approved last year so that a fix for surprise medical billing can be included in the funding package for public health programs set to expire on May 22.  Despite gridlock on so many other important measures, it is appearing increasingly likely that some version of surprise medical billing legislation will be enacted this year.