Representatives Donna Shalala (D-FL), Raul Ruiz, M.D. (D-CA), Phil Roe, M.D. (R-TN), Joseph Morelle (D-NY), Van Taylor (R-TX), Ami Bera, M.D. (D-CA), Larry Bucshon, M.D. (R-IN), and Brad Wenstrup (R-OH) released an outline of the bipartisan Protecting People from Surprise Medical Bills Act, forthcoming legislation that will protect patients from unfair and expensive surprise medical bills. The finalized legislation is expected to be introduced in the coming weeks.
“There is wide bipartisan agreement that patients should not be saddled with unexpected bills after a medical procedure—emergency or otherwise. We’ve learned from a number of states that have already passed surprise medical bill legislation, and now it’s time to take the lessons learned and protect all Americans from surprise medical bills,” said Rep. Shalala. “No American should be faced with a financially crippling bill from an out-of-network provider. I’m pleased to join my colleagues in proposing this legislation to finally end surprise medical bills. I look forward to this legislation making its way to the President’s desk.”
“For too many middle-class families, receiving an unexpected and very expensive bill from an out-of-network provider is devastating and can lead to severe anxiety, depression, and financial ruin. This must end,” said Dr. Ruiz. “That’s why I will soon introduce the bipartisan Protecting People from Surprise Medical Bills Act, legislation that will ban these bills and keep families out of the middle by using a fair, evidence-based, independent, and neutral arbitration system to resolve payment disputes between insurers and providers. As an emergency doctor, patients come first and must be protected. I look forward to working as a bipartisan team to get this critical legislation signed into law.”
“I am proud to be working with my friend and colleague Rep. Raul Ruiz on finding a solution to the widespread problem of surprise billing,” said Rep. Roe. “For too long, these bills have negatively impacted patients and families across our nation causing financial stress when working out how to pay for costly, unexpected bills. The legislative principles we have laid out will rely on reasonable payment metrics and a system of arbitration between medical providers and insurers to compensate providers for care, instead of leaving patients on the hook for costly surprise bills. With around 180 million Americans receiving their health care coverage from an employer in a large group plan controlled by the Employee Retirement Income Security Act (ERISA), it is time they have some peace of mind that a surprise bill won’t financially wipe them out. Similar laws have proven successful in New York and Maryland for state-based plans, and I am hopeful these principles will soon lead to legislation that will be the solution we need to help protect patients.”
“When a medical emergency arises, the last thing a patient should be worried about is whether they’ll receive a massive bill in the mail they can’t afford to pay,” said Congressman Morelle. “That is why we need to eliminate surprise billing and create a more affordable, transparent healthcare delivery system that puts patients first. I am delighted to partner with my colleagues to advance this critical legislation, modeled after the successful adoption of similar measures in New York State, and bring peace of mind to families everywhere.”
“Americans shouldn’t be blindsided by unexpected and costly medical bills in the midst of a medical emergency,” said Congressman Van Taylor. He continued, “I’m proud to join Representatives Morelle, Roe, and Ruiz to reduce out-of-pocket health care costs and bring an end to surprise billing.”
“Patients must be protected from unanticipated medical bills when they cannot pick the doctor; these bills cause more stress and less healing,” said Rep. Wenstrup. By providing a clear backstop for disagreements between providers and insurers, we can protect patients while maintaining the balance in our health care system that ensures access to care.”
“As a doctor, our first responsibility is to make sure our patients don’t get stuck with unexpected medical bills,” said Rep. Bera. “The bill being introduced is based on the positive experience of the New York-based arbitration approach to surprise medical bills that has incentivized doctors and insurers to resolve their payment differences. We think this model is the best approach.”
“As a physician, I believe it is important that patients are not financially burdened with surprise medical bills for unanticipated out-of-network care,” said Dr. Bucshon. “Instead of picking winners and losers, I support this bipartisan proposal that offers an independent dispute resolution process that is mediated by an arbiter. Access to life saving care is critical for all Americans and it should not come with lifelong penalties.”
Background
Surprise billing – also known as balanced billing – impacts hard-working families across the nation. Currently, patients with private insurance expect that visits to in-network hospitals for medically necessary care will be covered by their insurance. However, patients sometimes receive surprise bills for thousands of dollars from the emergency department or out-of-network providers based at in-network hospitals.
These surprise bills result from disputes between providers and insurance companies. When insurers and providers cannot agree on the cost of care, patients are often on the hook for tens of thousands of dollars in unexpected bills. In 29 states and the District of Columbia, there are no legal protections designed to protect patients from surprise bills.
Under the Protecting People from Surprise Medical Bills Act, the practice of balance billing would be banned. Patients would be left out of the middle and are not required to play any part in resolving payment disputes. The legislation sets forward the most robust patient protections possible, ensuring families struggling to get by are not bankrupted by surprise medical bills.
The Protecting People from Surprise Medical Bills Act takes a proven approach to protecting patients from surprise bills by adopting an arbitration model. Under this model – similar to the one adopted by New York State in 2015 – if providers and insurers cannot agree on a payment rate, they can engage in an independent dispute resolution process (IDR). Under IDR, insurers and out-of-network providers each identify a cost for the patient’s care, and a neutral arbiter chooses the fairer price. This model creates an incentive for both parties to choose reasonable numbers to cover the cost of treatment. According to a 2018 study, out-of-network bills in New York declined 34 percent just three years after the state passed arbitration legislation.
The Protecting People from Surprise Medical Bills Act will make the following reforms:
- Ban the practice of billing patients for unanticipated out-of-network care;
- Implement a ‘baseball-style’ arbitration model that identifies a reasonable payment rate when insurers and providers cannot agree on the cost of care;
- Improve transparency by requiring health plans to clearly identify in-network providers and patients’ deductibles.
A detailed summary of the legislation is provided below:
Protecting People From Surprise Medical Bills Act
Congressman Ruiz, M.D.
Section by Section
Section 1:
Title
“Protecting People From Surprise Medical Bills Act”
Section 2:
Prohibition on Surprise Balance Billing
Out-of-network (OON) providers will no longer be permitted to balance bill a patient for unanticipated out-of-network care, which includes the following situations:
- Emergency care in both in-network and out-of-network facilities
- Scheduled anticipated care with unanticipated out-of-network providers
- Out-of-network after-emergency care when a patient cannot travel without medical transport
- Out-of-network imaging or lab services when ordered by an in-network provider
The patient shall not be liable to pay the insurer any amount in excess of the applicable in-network cost-sharing amount and deductible, and the insurer or provider shall not bill any such excess payment.
Entities who violate the ban and balance bill a patient will be subject to civil monetary damages if the patient has not been reimbursed the amount that they were balanced billed within 30 days of the entity being made aware of the error.
Initial payment
The plan/issuer will pay the provider a commercially reasonable rate within 30 days.
Direct Negotiation
If either party is dissatisfied with that amount, they will have 30 days to privately settle on a payment amount.
Establishment of Independent Dispute Resolution (IDR) Process
If no agreement between the parties is met, either party may trigger the independent dispute resolution (IDR) process described below.
The Secretaries of HHS and Labor shall establish an IDR process for resolving disputes between health plans and out-of-network providers for emergency services or unanticipated care rendered to enrollees.
The patient will be completely out of the process and will only be billed for their in-network cost-sharing rates.
The IDR is “baseball style” – the arbiter will select either the initial provider charge or the payment that the plan initially paid the provider, whichever they deem to be more reasonable.
If the parties reach a settlement prior to completion of the arbitration process, then they split the costs of the process. Any payment owed by one party to the other must be made within 15 calendar days.
HHS shall maintain a database of arbitrators (which responsibility may be delegated to the American Arbitration Association or to a state that already undertakes a similar function) who are qualified to resolve billing disputes of this nature and are unbiased and free from actual or potential conflicts of interest.
Providers shall be permitted to submit multiple claims of identical code(s) from a single site of service for simultaneous consideration under the arbitration process. The dates of service for these claims shall occur within 60 days of each other.
Once arbitration is requested, the arbitration process shall be completed within sixty (60) days; this timeframe includes 30 days for both parties to submit information and data and 30 days for the arbiter to render a decision.
Providers/issuers may submit supporting documents, and the IDR entity shall consider:
- The usual and customary cost of the service, which is defined as 80th percentile of charges for comparable services for that specialty in the geographical area in which the services were rendered, determined through reference to an independent medical claims database;
- If previously contracted, the history of commercial network contracting between the plan and the provider, including the prior in-network rates;
- The training and specialization of the provider, as well as the characteristics of the practice setting (including the acuity level and cost intensity);
- The provider’s quality and outcome metrics;
- The circumstances and complexity of the case, including time of the service;
- The physician’s usual charge for comparable services with regard to patients in health care plans in which the physician is not participating;
- If there is a wide discrepancy between what the plan is attempting to pay this OON provider vs. other OON providers and between what the provider is charging for this OON patient vs. other OON patients;
- Individual patient characteristics; and
- Other economic and clinical circumstances relevant to the case.
The final judgment of the arbitrator on the reasonable amount shall be binding and enforceable in any court with subject matter jurisdiction, and not subject to appeal unless it is determined that fraudulent or corrupt actions have been taken by any of the parties involved in the IDR process.
Section 3:
Deductible transparency
A health plan/issuer shall clearly print in-network and out-of-network deductible amounts on insurance cards distributed to the beneficiaries.
Section 4:
Transparency for In-Network Patients
The Secretary shall establish transparency standards to provide better information to covered patients about which providers are in-network of the covered plan. Such standards shall include at a minimum a requirement that plans offer provider directories online and in print; annual audits of provider directories; monthly updates of the online directory; and disclosures on accuracy of the print directories.
A patient cannot be held responsible for out-of-network costs if the patient could not have reasonably known they were out-of-network because insurers are not compliant. For example, if a patient checks the website and verifies with the plan that they are in-network, they cannot be balance billed if that turns out not to be true.
Section 5:
Reporting Requirements
Each group health plan and issuer must submit the following information annually to the Secretary of HHS and Secretary of Labor:
- The number of claims submitted by in-network providers, including how many of those claims were paid and how many were denied;
- The number of claims submitted by out-of-network providers, including how many of those claims were paid and how many were denied;
- Patient out-of-pocket costs for out-of-network services; and
- For unanticipated care out-of-pocket claims, how many of the claims are for emergency care and how many are for out-of-network care in an in-network facility.
Section 6:
Impact Study
No later than 3 years after enactment, the Secretary of HHS shall report to Congress an analysis of the following effects of this statute:
- Financial impact on cost-sharing and overall health care spending;
- The incidence and prevalence of unanticipated out-of-network care broken down by type – emergency care vs. out-of-network care in an in-network facility;
- Network adequacy;
- Comparison of claims databases used and the impact on reimbursement rates;
- Number of bills that are settled in direct negotiation and the number that go to IDR;
- Administrative cost of IDR; and
- Impact of IDR on premiums and deductibles
Section 7:
Billing feasibility study
The Secretary of HHS will conduct a feasibility study on the provision of a single bill for all services provided for a single episode of care.
Section 8:
Scope and Applicability to States with Surprise Billing Laws
This act shall apply to all self-funded plans and Federal Employees Health Benefits Program plans, and to all fully-insured plans in states that do not have balanced billing laws or regulations. States do not have to use the IDR framework but must include the patient protections included in section 2 of this legislation regarding cost to patients.
Section 9:
Billing Statute of Limitation
A patient cannot be billed for the first time for any services after one year of services rendered by either the provider or the payer.
Section 10:
Effective Date
The Secretary of Labor and Secretary of Health and Human Services shall promulgate regulations pertaining to this law within one year of enactment. The provisions of this bill shall be effective for plans and providers starting on the January 1stthat occurs after one year after enactment.
Section 11:
Publication
HHS shall publish results of arbitration by geographic region in order to give more guidance to providers and plans.
