One Step Forward, Two Steps Back for Surprise Medical Billing Legislation

December 13, 2019

Just as a surprise medical billing measure appeared to be inching closer to the finish line, a proposal released by the House Ways and Means Committee introduced yet another hurdle in its path to congressional approval.

House and Senate committee leaders announced a bipartisan, bicameral deal on Monday. The proposal includes:

  • Setting a market-based median in-network payment rate based on average prices for geographic service areas;

  • An option for a provider or insurer to go into "baseball-style arbitration," generally known as Independent Dispute Resolution (IDR), if the median in-network rate exceeds $750 (under baseball-style arbitration, both sides submit a proposed dollar amount and the arbiter can only choose one);

  • A 90-day cooling off period meaning that the party that initiated the arbitration cannot take the same party to arbitration for the same service or item for 90 days following a determination from the arbiter; and

  • IDR for air ambulance if the median in-network rate exceeds $25,000.

Proponents argue this approach results in both parties moderating their proposed dollar amounts and lowering health care costs.  But a Brookings Institute analysis on arbitration in New York demonstrated that costs actually went up as arbiters typically decided on amounts above the 80th percentile of costs.

HR Policy Association and other employer groups have advocated the use of a benchmark with no arbitration and, if arbitration is included, strong transparency protections should be put into place to ensure bad actors do not consistently use arbitration to drive up prices.

The Ways and Means Committee proposal does not appear to include a benchmark.  Instead it states that insurers and doctors should first work out their own payment disputes, and if it cannot be resolved, IDR would occur.

Takeaway:  With the significant differences among the proposals and Chairman Neal and Ranking Member Brady stating the issue should be tabled and taken up in the new year, it seems the finish line is farther than we thought.