For Immediate Release
Washington, DC – This week, the House Committee on Ways and Means will consider the “Consumer Protections Against Surprise Medical Bills Act of 2020,” legislation proposed on February 7, by Chairman Neal (D-MA) and Ranking Member Brady (R-TX).
The ERISA Industry Committee (ERIC) is pleased that nearly a year after Senate champions introduced legislation, the House is again moving forward with proposals regarding the surprise medical billing crisis, this time from the Ways and Means Committee. On behalf of large employers that sponsor health benefits for their own workers and families, ERIC is committed to ending surprise medical bills and the financial and emotional crisis they create for families across the country.
“We are dismayed and disappointed that the Committee proposal creates a new system that is markedly worse than current law for patients and families,” said James Gelfand, Senior Vice President, Health Policy, ERIC. “A government-mandated arbitration regime will waste billions of dollars and countless hours, and only reward the most financially-motivated players in the health care system — air ambulance companies, investor-owned physician staffing firms, and hospitals that have become financially intertwined with private equity firms. Each of these players refuse to work within networks or charge reasonable fees in emergencies, and the Committee proposal would lock in their current abusive practices, rather than correct their behavior for patients.”
Employers engaged with Congress to solve the medical billing crisis when we saw our employees taken advantage of in their most vulnerable moments – before surgery, during emergency air transport, or at an emergency room. The Committee proposal is a boon to those who created the surprise billing crisis.
We proposed a simple solution – instead of burdening patients with bills from out-of-network emergency rooms or ancillary providers, send the bills to the plan sponsor or insurer. We asked for predictability and a solution that would protect patients from cost increases.
The only thing employers asked in exchange for taking on this significant new financial responsibility, was that the new payments we must make be based on free market negotiated rates. While the Committee proposal does reference these rates, it instead creates a mechanism by which every single surprise bill issued today can become a government-mandated binding arbitration showdown, forcing employers to spend billions of dollars on lawyers, arbitrators, facilities, and ultimately, on biased arbitration settlements that could be based just as much on providers’ “list prices” as they are on real market rates and in every case result in unpredictable costs.
This new regime will increase costs, and there is no doubt that these costs will be borne by patients in the form of higher health insurance premiums, higher deductibles, higher copays and coinsurance, and less generous benefits. Patients are better off with current law.
ERIC and our large employer member companies will continue to advocate for more reasonable and effective solutions to end surprise billing, including the Senate’s “Lower Health Care Costs Act” (S. 1895) and the House Energy and Commerce Committee’s “No Surprises Act”, also the House Education and Labor Committee’s “Ban Surprise Billing Act.” We urge the Committee to reconsider the proposal as introduced and moderate it to include protections for employers and patients and we stand ready to work with the Committee and its members.
Below are details on why the “Consumer Protections Against Surprise Medical Bills Act of 2020” does not meet employers’ metrics for a viable solution to surprise medical billing and could be worse for patients than the status quo.
- The legislation does not end surprise billing. Instead, it reroutes surprise bills to employers. Employers will be forced into binding arbitration with private equity firms seeking to exploit the system. These bad actors have spent more than $50 million on advertisements, many of which press Congress to abandon the use of free market negotiated rates, and instead punt surprise bills into government-mandated binding arbitration (“Tell Congress to support IDR” – independent dispute resolution). The Committee proposal contains the same measures demanded by these firms.
- The legislation includes no limits on access to arbitration. Other bills include reasonable limits designed to keep arbitration from overwhelming the system. The Committee proposal contains no threshold for the size of a bill to go to arbitration. There are no limits on “frequent flyers,” and no cooling-off period to prevent private equity firms from constantly engaging in arbitration. ERIC and our allies have provided Capitol Hill with a large array of options to limit arbitration, and the Committee’s bill includes none of them. In fact, the bill allows batching of claims to empower private equity to launch hundreds of arbitrations at the same time.
- The legislation includes no limits on arbitration settlements. Employers could be on the hook for an infinite amount of money, as the arbiter is not bound by any limitations on what they can award providers. The proposal suggests that arbiters consider market-based rates but allows the parties to submit virtually unlimited data to the arbiter. While the bill bans consideration of provider “list prices” and the “usual and customary” rates, it does not preclude back-door ways of submitting “list prices,” such as through the use of the FAIR Health database. Worse, the arbitration considerations are not confined to the specific episode of care at issue, meaning that providers will be able to leverage dissatisfaction with payments from government programs like Medicare and Medicaid, to extract unreasonable payments from employers.
- The legislation encourages the air ambulance industry, much of which is now owned by private equity, to keep sending surprise bills to patients. While other legislation would protect patients from air ambulance surprise bills, the Committee proposal requires nothing more than data reporting by providers to the government. This will be especially devastating for employers who protect their employees from air ambulance abuses.
- We are pleased that the Committee added transparency measures but there is so much more that can and should be done. Most troubling is that the transparency provisions appear to undermine the Trump Administration’s proposed transparency rules for hospitals, employer-sponsored plans, and insurance carriers. By including an extremely limited transparency section in the legislation, the Committee’s proposal also weakens the prospects of passage of the much more robust transparency provisions included in the Lower Health Care Costs Act – provisions which were agreed to in December of 2019 between House and Senate negotiators.