Shannon Muchmore @stmuchmore Dec. 10, 2019
The latest
details emerging on legislation to ban surprise medical billing includes
nuggets meant to pacify payers and providers, but is not pleasing either.
The bill backed
by a bipartisan group of Senate and House leadership would require
insurers pay at least the median in-network negotiated rate for the area market
for out-of-network services. Payers have been pushing for some type
of provision like this.
It also
includes the option for either party to elect arbitration if the payment is
above $750. Providers have backed some type of arbitration, but are
staunchly opposed to a set rate.
James Gelfand,
senior vice president for health policy at the ERISA Industry Committee,
told Healthcare Dive he didn't think employers would be "throwing any
parades" over the bill, but sees how lawmakers are trying to find a middle
ground.
"Congress
is making a rather bold play of, 'Look, we're doing our best to address the
concern of industry here'," he said, adding he didn't think any major
players could say their top-tier concerns hadn't been met.
The
legislation, known as the Lower Health Care Costs Act,
also includes provisions pushing price transparency, promoting competition and
attempting to rein in drug costs.
Leaders of the
House Energy and Commerce Committee as well as the Republican chairman
of the Senate health committee are on board with the act, but some key
Democrats have not yet endorsed it. Noticeably absent is that panel's top
Democrat, Sen. Patty Murray of Washington.
An aide for
Murray told Healthcare Dive she "believes the overall agreement takes
important steps forward on a number of issues impacting patients and families.
She's working with some members of her caucus on concerns they still have and
is very hopeful a final agreement can be reached."
Congress faces
a fast-approaching deadline to get a ban passed this session and is still
charged with funding the government by Dec. 20.
The American
Hospitals Association opposed the draft, calling it particularly damaging for
rural hospitals.
"An
arbitrary rate gives insurers an incentive to remove hospitals from their
networks and force artificially low reimbursement rates, which limits
access," the group wrote. "Moreover, such proposals would provide a
huge windfall to commercial insurance companies at the expense of the nation’s
community hospitals. "
The American
Association of Medical Colleges is against the draft bill because of its
benchmark rate.
Powerful payer
lobby America's Health Insurance Plans pointed to a statement from the
payer/employer coalition it is a part of, which attacked the proposal's
arbitration component.
The White
House, which has previously opposed arbitration, said it was behind the plan,
however. "This compromise reflects the input of doctors and hospitals and
is the result of months of delicate work to reach a deal among congressional
members and the White House that protects patients," according to a statement
from the press secretary.
One element in
the law's favor is its other components, like funding for community
health centers, are key for the industry despite other complaints.
As the package
is likely to be part of year-end government funding, it couldn't be picked
apart with only some pieces advancing and still meet neutral funding
requirements, Gelfand said.
Baseball style
arbitration, air ambulance services
The independent
dispute resolution process would be the so-called baseball style arbitration,
where each party can submit one payment option to be decided on by an
independent arbiter. That third-party would be required to consider factors
like market-share, patient acuity, treatment complexity and a provider's
training, education and experience. The party that initiated arbitration
can't bring the same other party to a resolution process over the same item or
service for 90 days after the decision.
In an addition
to earlier drafts, there is also a section specifically targeting air ambulance
services, with the same set payment rate and arbitration possible above
$25,000. Air ambulance providers would also be required to provide HHS and the
U.S Transportation Secretary with two years of cost data.
The bill also
establishes an advisory committee focused on quality and patient safety.
Air ambulances
slammed the proposal, saying it would threaten patient safety and lead to
medical base closures.
"This
threshold compromises the ability of air medical services to continue
operations by eliminating any incentive for insurers to reach in-network
agreements with air medical providers or pay the true cost of air medical
care," according to the Save Our Air Medical Resources Campaign. "In
addition, this federal government set rate only puts more pressure on air
medical providers as Medicare and Medicaid already pay less than 40% of air
medical costs."
The baseball
style arbitration safety valve is an approach the state of New York used in its
law banning surprise billing. Data the state released recently shows that the law,
enacted in 2015, appears to have pushed prices higher as arbiters, who were
told to consider the 80th percentile of billed charges, actually settled on
payments higher than that 8% of the time.
Another state
law, California's, provides a potential comparison. It also has a set rate with
an arbitration backstop. Studies of that legislation have shown out-of-network
services from affected specialties declined by 17% after it
was enacted. Separate research showed stakeholders viewed the law as
giving payers more leverage in contract negotiations.
In comments on an earlier version of the federal
legislation being considered, USC-Brookings Schaeffer Initiative for Health
Policy researchers said using median contracted rates to calculate payments
would have the unintended consequences of locking in an unlevel playing field
across payers and creating incentives for payers and providers to cancel
contracts.
As for
arbitration, the analysts wrote those "proposals have the same basic
shortcomings, plus the arbitration process adds an additional layer of
uncertainty and administrative cost."
The draft's
$750 minimum benchmark for arbitration is key, as many high-volume but low-cost
specialty services would rarely meet that trigger rate. Data from the Health
Care Cost Institute show that in-network
median amounts for radiology services, for example, don't reach above that
threshold.
Emergency room
services occasionally and anesthesia services frequently top $750.
Promoting price
transparency, competition
The act
includes a number of provisions also in a previous draft that seek to provide
for more competition in the industry along with more clarity on healthcare
pricing.
Those are
highly likely to receive industry pushback, too, as CMS regulations pushing
price transparency have been thoroughly decried. Hospitals have sued the Trump
Administration over its latest attempt, claiming that forcing negotiated rates
between payers and providers out into the public violates the First Amendment
and would do nothing to hold down prices for consumers.
The draft would
prevent plans from anti-steering contract clauses that restrict plans from
pushing patients to see certain providers as well as clauses that require plans
to contract with all of a system's providers or none of them.
Health plans
would be required to have up-to-date directories and provide patients with
good-faith estimates of out-of-pockets costs within two days of a request. The
draft bans pharmacy benefit managers from engaging in spread pricing (charging
a plan or patient more for a drug than the PBM paid) and forced them to pass on
100% of any rebates or discounts to plan sponsors.
It would also
create an all-payer claims database, which researchers have said would provide
important data to foster policymaking initiatives in the future.
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