HELP Committee bill would put rural hospitals out of business, senator says.
This article was first published on Wednesday, February 13, 2020 in MedPage Today.
By Joyce Frieden, News Editor, MedPage Today
WASHINGTON -- Much of the current congressional legislation on surprise billing is too friendly to health insurers, Sen. Bill Cassidy, MD (R-La.), said here Wednesday at the American Medical Association's (AMA) annual advocacy conference.
Cassidy, a hepatologist, described how he and a bipartisan group of Senate colleagues worked for 2 years to develop legislation on the issue. Their bill, known as the "Stopping The Outrageous Practice of Surprise Medical Bills," or the STOP Surprise Medical Bills Act of 2019, would pay out-of-network physicians an interim payment based on a benchmark rate, but if the doctor wasn't satisfied with that amount, he or she could proceed to "baseball-style" arbitration, in which the doctor and the insurer submit a proposed price to an independent arbiter, who would decide what the payment should be.
The bill also addresses the issue of narrow provider networks. "Under our bill, if there's an insurance company that has a narrow, narrow network, the arbiter is instructed to look at that and be prejudicial against the insurance company," said Cassidy. On the other hand, "if the doctor or the doctors' group does not contract with anybody, the arbiter would look at that prejudicially against them ... We address it indirectly, but address it powerfully." Cassidy's bill has garnered 15 Republican and 14 Democratic cosponsors but has not otherwise advanced.
Meanwhile, Sen. Lamar Alexander (R-Tenn.) and Sen. Patty Murray (D-Wash.), the chairman and ranking member, respectively, of the Senate Health, Education, Labor & Pensions (HELP) Committee, have been working on their own bill, the Lower Health Care Costs Act of 2019, which was "very insurance-friendly," said Cassidy. That bill would pay doctors and hospitals that are out-of-network the median contracted rate that in-network doctors and hospitals receive for the same services in their local geographic area.
"It's basically modeled after the California law which all my California doctors tell me is awful -- in which insurance companies cancel contracts and then they have the negotiating power and they establish" their own rate. "You put that into a rural hospital setting, and you're going to have a payment from the commercial side, which is going to put that rural hospital out of business. You and I know that," he said to the assembled physicians. "We know that if you've got a bad payer mix, you make up for that bad payer mix by charging the commercials more, but if the commercials can cancel the contract and pay you whatever they want to, they're going to pay you far less than your cost of doing business, and your rural hospital goes out of business."
Alexander's bill passed the HELP committee in June by a vote of 20-3 but hasn't yet been acted on by the full Senate, although some of its provisions unrelated to surprise billing have been included in other legislation. "In fairness to his staff, they came to the realization that rural hospitals are going to have a problem and they're trying to do something on the back end, but I still don't think this is the best solution," said Cassidy.
In addition, the House is also working on the issue, with a bill in the Energy & Commerce Committee that "looks a lot like the HELP committee bill, but there is significant opposition to that," Cassidy said. The House Ways & Means Committee on Wednesday passed a bill known as the Consumer Protections Against Surprise Medical Bills Act which is "closest to the STOP Act, but I still have some problems with the Ways & Means bill," he said. That's because "they don't have the interim payment; they have a facilitated glide path to arbitration, and the point at which the arbiter begins to make the arbiter's consideration is around the median network price. We think ... that becomes an anchor."
Meanwhile, the House Education & Labor Committee passed through its own bill on Tuesday "which all the physicians opposed, no matter what their party," Cassidy said; that bill would set a benchmark rate for out-of-network bills but also would allow for arbitration in certain situations with high-dollar bills.
Cassidy exhorted AMA members to support his bill during their Wednesday "lobby day" with their legislators. "When you meet with somebody today, be that a staffer, a representative, or a senator, if you decided which of these bills you'd like, then advocate for that bill," he said. "But I would hope you'd advocate for something such as what we have proposed, that there be an interim payment; that small two- or three-person group has the cash flow they need to stay in business."
Sen. John Barrasso (R-Wyo.), who spoke at the conference earlier on Wednesday, criticized "Medicare for All" proposals in which all doctors would be paid Medicare rates, noting that in the old days, Medicare allowed doctors to "balance bill" patients for bills that were higher than the amount Medicare was willing to pay.
"That is now illegal. But if you're really going to solve some of the healthcare crisis, if every physician were paid under a 'Medicare for All' plan at Medicare rates, hospitals couldn't stay open, physicians' offices couldn't stay open," he said. So balance billing "is something I've always supported. There are many people that say, 'I'd be happy to do that.' But to say everybody's at the Medicare rate, it's not sustainable. Unless we can focus on balance billing, it's not a sustainable model."
AMA president Patrice Harris, MD, did not endorse a particular bill but said the association's policy was "number one, keep the patient out of the middle" and that "we definitely believe arbitration/mediation is important." If benchmarking is done, it shouldn't be done by insurers. "We have to look at all of the contours around who is deciding what a rate might be, but the biggest piece is the ability for physicians to have a level playing field as they go into arbitration," she added.
Cassidy, a hepatologist, described how a bipartisan group of Senate colleagues worked for 2 years to develop legislation on the issue.
The STOP Surprise Medical Bills Act of 2019, would pay out-of-network physicians an interim payment based on a benchmark rate.
With STOP, if the doctor wasn't satisfied with that amount, he or she could proceed to "baseball-style" arbitration.