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AAMC Comments on HELP Discussion Draft as Congress Continues to Consider Surprise Medical Bills

June 14, 2019

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PRESS CONTACTS
Allyson Perleoni, Senior Legislative Analyst

The AAMC June 7 submitted comments to the Senate Health, Education, Labor, and Pensions (HELP) Committee in response to the Lower Health Care Costs Act of 2019 discussion draft legislation [see Washington Highlights, May 24]. In the letter, the AAMC commended the committee for taking on the surprise billing issue and working to protect patients. The letter also urged the committee to reject benchmark payment setting and instead to consider an independent dispute resolution process.

In the letter, the AAMC stated that it was “pleased that the proposal would prohibit balance billing and hold patients harmless by only requiring them to pay the in-network cost-sharing amount for out-of-network emergency care, care provided by ancillary providers, and out-of-network diagnostic services at in-network facilities.” However, the letter continues by expressing concern that the legislation would impose “an additional notice requirement on teaching hospitals” which would be “overly burdensome in emergency situations, and also could be detrimental to patients,” particularly at teaching hospital given that they are common sites for emergency care.

The AAMC firmly rejected setting a benchmark payment in statute, stating that rate setting “will disincentivize insurers to negotiate with providers, and instead allow them to use statutory benchmarks to negotiate rates with providers” and that it would “undermine the fundamental practice of private negotiation” and “lead to narrow networks…as health plans will lose incentive to offer competitive rates and fair business practices to encourage providers to enter into contracts.”

The draft legislation also included provisions on prescription drugs, transparency, public health, and health information technology. The AAMC praised the committee for including language to address high prescription drug prices but expressed concern that the draft did not go far enough to address to root cause of the issue. The AAMC also warned the committee that numerous proposals in Title III, which addresses transparency, would be burdensome to hospitals and would actually stand to make health care more complicated for both providers and their patients. Finally, the AAMC applauded the committee for including important public health program improvements.

In the House, the Energy and Commerce Health Subcommittee June 12 convened witnesses from the American Hospital Association (AHA), Physicians for Fair Coverage, America’s Health Insurance Plans, the Association of Air Medical Services, Families USA, the American College of Emergency Physicians (ACEP), and the ERISA Industry Committee (ERIC), as well as a patient advocate to discuss how to protect patients from surprise medical bills.

Both Subcommittee Chair Anna Eshoo (D-Calif.) and Ranking Member Mike Burgess (R-Texas) highlighted the need to address surprise medical bills in their open statements. Eshoo stated that, “Without action from Congress, millions are unprotected from surprise bills. Many in the industry understand patients cannot control where they receive emergency treatment, but they still participate and contribute to a system that can bankrupt a person. We must protect every American from a surprise medical bill.”

Burgess echoed the sentiment, and also raised President Trump’s priorities which “include helping patients without increasing health care costs and maintain choice for patients.” He also stated that he agreed “with President Trump and hope we can work together to bring bipartisan legislation to the President’s desk.”

Full Committee Chair Frank Pallone (D-N.J.) used his opening statement to highlight the bipartisan discussion draft he released last month [see Washington Highlights, May 17] with full Committee Ranking Member Greg Walden (R-Ore.). Pallone stated that the No Surprises Act “holds patients harmless in these situations by ensuring that individual’s cost sharing for out-of-network car is limited to what the individual would have paid if the services were provided in-network.” He continued, saying that providers “would no longer be able to balance bill patients for out-of-network emergency services or for scheduled services from providers the patient was not aware would be involved in their treatment.”

Walden also mentioned the legislation and emphasized that state laws addressing surprise medical bills, like the one in his home state of Oregon, would be allowed to remain in place under the No Surprises Act.

The witnesses on the panel agreed that Congress should address surprise medical bills, though they diverged when pressed on how to resolve the bills.

Witnesses from the AHA, ACEP, and Physicians for Fair Coverage expressed concern with benchmark rate setting. AHA Executive Vice President of Government Relations and Public Policy Tom Nickels stated that the “Committee needs to preserve the ability of providers and insurers to negotiate private contracts and not establish a fixed payment amount for out-of-network services. We urge Congress to enact a legislative solution that protects patients from surprise billing without having unintended negative consequences on the health care system.”

Vidor E. Friedman, MD, FACEP, president of the ACEP, echoed these sentiments and also urged the Committee to “modify your current draft legislative proposal to use a baseball-style arbitration approach that has proven to be successful.”

Witnesses from the insurance industry largely supported benchmark rates to resolve payment disputes, with James Gelfand, senior vice president of health policy at ERIC, supporting the Pallone-Walden proposal as creating “a reasonable, market-based benchmark in surprise billing situations, taking patients out of the middle, and providing certainty to plans, patients, and providers.”

Physician groups and the AHA pushed back on the idea of setting a benchmark, stating that they would be required to accept lower rates under this policy, and would ultimately be forced out of network, creating narrower networks for patients. Specifically, Ranking Member Walden mentioned the California benchmark law as an example stating that the “California benchmark has led to higher network participation and current state laws on network adequacy still apply.” Sherif Zaafran, MD, FASA, chair of Physicians for Fair Coverage disagreed, and stated that they “know of two of the largest groups in California have been told they may have to take a big cut or simply go out-of-network. I know it’s a new law, but groups are being impacted.”

This hearing occurred as both chambers of Congress continue their inquiry into surprise medical bills. It follows hearings in both the Education and Labor and Ways and Means Committees [see Washington Highlights, April 5, May 24]. The Senate HELP Committee will hold a hearing on its proposal next week.

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