Powerful House committee is latest to take stab at ‘surprise’ billing fix

By Rachel Roubein and Dan Goldberg

The leaders of a powerful House committee are aiming to break through a legislative quagmire as Congress tries to deliver on the stubbornly elusive goal of protecting patients from "surprise" medical bills.

A one-page plan from Ways and Means Chairman Richard Neal (D-Mass.) and ranking member Kevin Brady (R-Texas) is at odds with a detailed bipartisan deal struck between key House and Senate committees late last year to settle billing disputes that can leave patients on the hook for thousands of dollars in unexpected expenses.

By calling for outside mediation when private negotiations hit an impasse, the Ways and Means plan moves closer to an approach preferred by powerful hospital and physician groups nervous about any compromise that could favor health plans.

Neal and Energy and Commerce Chairman Frank Pallone (D-N.J.) downplay the differences between their approaches, and House leaders are signaling they want to bring a compromise bill to the floor. But they'll still have to find a middle ground on an issue once viewed as the "easy fix" in health policy that's instead divided health interests intent on avoiding picking up the extra cost of holding patients harmless.

“This institution abounds in skepticism,” Neal said. “I’m not discouraged.”

Any solution will have to come fast since all involved agree the best chance of moving a fix comes in May, when Congress will have to renew funding for community health centers, programs boosting primary care and more. Eliminating surprise billing could provide billions of dollars in projected savings to the government that could help pay for those efforts and boost the prospects for passage in a Congress riven by impeachment and election year politics.

The framework Neal and Brady outlined on committee letterhead is short on specifics but envisions letting providers and insurers work out billing disputes, with the option of turning to “an independent mediated negotiation process." Doctors and hospitals have pushed for months for an approach that relies on such outside help, believing a deal that emerged from House Energy and Commerce leaders and the Senate health chairman in December could give health plans too much power.

That compromise between Senate HELP Chairman Lamar Alexander (R-Tenn.), Pallone and ranking Republican Greg Walden of Oregon would settle disputes by pegging payments to providers to a federal benchmark payment based on median in-network rates. It would allow outside arbitration in some cases, such as for billing disputes over $750.

“Frank and I are going to try to get together pretty fast with [House Majority Leader] Steny [Hoyer], and we don’t think there are big differences between the Ways and Means bill and the E&C bill,” Neal said, adding it was likely the two plans would get merged.

Neal's more ready embrace of outside arbitration may be needed to secure the support of Senate Minority Leader Chuck Schumer, who has long guarded the interests of New York hospitals that opposed the bipartisan deal announced in December. Another key player, Senate HELP ranking Democrat Patty Murray of Washington, didn’t sign onto the deal at the time but has since said that she supports it.

Though Schumer hasn’t threatened to hold up any compromise, he’s made it clear he prefers a federal law that mimics New York’s own approach to settling billing disputes — one that uses “baseball-style arbitration” and is credited with saving more than $400 million over three years. Critics say it's encouraged hospitals to charge more for care, which patients eventually pay for in the form of higher premiums.

"Given that New York State already has a strong, patient-friendly law on the books that seems to be working, Sen. Schumer wanted to make sure that any federal anti-surprise billing legislation did not have an adverse impact on patients in New York,” said Schumer spokesperson Angelo Roefaro.

The New York model is widely disliked by insurers, who say it adds unnecessary delays and costs to the health system, highlighting the industry split that congressional negotiators have to navigate. “We’ll be pretty strong in opposing a bill that includes arbitration as the sole policy principle,” said a spokesperson for the Coalition Against Surprise Medical Billing, which is mainly insurer and employer groups.

As Neal moves toward releasing a fleshed-out legislative proposal, backers of last year's bicameral plan are touting theirs as the only viable fix that has the backing of the Trump administration.

There’s lingering frustration with Neal and Brady for releasing a framework on surprise billing just days after Senate HELP and House E&C leaders unveiled a detailed section-by-section summary of their bipartisan agreement last year. A Republican Senate aide said that agreement “is the definition of a consensus solution … and it has the support of the White House, to boot."

“Ways and Means has had a year to present a proposal,” the aide said. “The clock is ticking and innocent patients can’t wait any longer.”

Brady defended the decision to jump into the debate, saying it was “really important not to rush into a year-end deal” on surprise billing and adding he didn’t think the bicameral plan had the votes to pass.

The one-page Ways and Means outline especially frustrated Alexander, who is retiring at the end of the year and wants a surprise billing fix to be part of his legacy, and Pallone aired grievances over the delay passing ‘surprise’ medical bill legislation during a closed-door House Democratic caucus meeting in December.

A mechanism in the pair’s plan had been targeted for months by a dark money group largely funded by two private-equity backed companies that provide physicians to staff hospitals. It spent nearly $54 million on ads blasting the benchmark payment, according to Advertising Analytics, saying it would lead to doctor shortages and hospital closures, and instead advocating for arbitration.

Meanwhile, the insurer and employer coalition spent about $4 million on ads portraying the federal benchmark payment as the solution that doesn’t inflate health costs, according to a spokesperson.

Neal, Pallone and others are now putting up a united front, even as health care interests promise continued lobbying to shape any compromise.

"The speaker and the leadership have said that they really want to do surprise billing, and we're going to work on it and get it done," Pallone said.

The outcome could boil down to the narrow window for deal-cutting.

“It's troubling that it's taking this long,” said Rep. Lloyd Doggett, chairman of the Ways and Means Health Subcommittee. Asked about Neal and Brady's plan, he said, “I have only seen the most general outline, which seems to change from week to week, but this can't be something that is 100 percent for the provider or 100 percent for the insurer. There has to be some middle ground found here.”

Adam Cancryn contributed to this report.