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Hospitals, Insurers at Odds Over Surprise Medical Bills Legislation

Analysis  |  By Steven Porter  
   March 19, 2019

While insurers and hospitals alike see balance billing as a problem, they disagree on its causes and solutions.

Seventeen organizations representing some of the nation's largest health insurers sent a letter Monday to congressional leaders, calling for legislation that would prohibit providers from sending surprise medical bills to patients for emergency services when the patients didn't have a choice on where to receive care.

The letter, signed by America's Health Insurance Plans (AHIP) and others, urges lawmakers also to pass policies that would set reimbursement rates based on what insurers pay similar doctors in a given geographic area or a Medicare percentage.

"A significant driver of high costs are exorbitant bills that millions of patients with comprehensive insurance coverage receive every year, demanding arbitrary fees for treatment by certain specialty medical doctors they did not seek out for care and, often, never even knew treated them," they wrote.

The letter caught immediate blowback from the American Hospital Association (AHA) and Federation of American Hospitals (FAH), which argued in a joint statement that, while patients should not be subjected to balance billing, insurers and providers must keep their ability to negotiate over payment rates.

"Not only is it a dangerous precedent for the government to start setting rates in the private sector, but it could also create unintended consequences for patients by disrupting incentives for health plans to create comprehensive networks," AHA President and CEO Rick Pollack and FAH President and CEO Chip Kahn said in the statement.

Pollack and Kahn noted that hospitals had already proposed their own plan to protect consumers from surprise bills.

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While insurer groups argue providers are largely to blame for surprise bills, the hospital groups have pointed blame back at insurers. Pollack and Kahn said last December that health plans have maintained inadequate provider networks for emergency care leading to "one of the root causes of surprise bills."

This week's tit-for-tat comes as public awareness and political pressure rise around surprise medical bills. Half of the states have enacted a patchwork of protections, though only nine have "comprehensive protections," according to a January report by the Commonwealth Fund.

Meanwhile, potential legislative solutions are garnering rare bipartisan support on the federal level, and President Donald Trump has asked his administration to look for a fix.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.


Insurers said providers have been known to send patients "exorbitant" and "arbitrary" surprise bills for specialty physicians, helping to drive high healthcare costs.

Hospitals have said insurers contribute significantly to surprise bills by failing to offer adequate coverage for emergency care.

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