Bills
| 3.23.22

Should Consumers be Protected Against Surprise Medical Bills? (H.R. 5826)

Do you support or oppose this bill?

What is H.R. 5826?

(Updated March 15, 2021)

This bill — the Consumer Protections Against Surprise Medical Bills Act — would aim to protect patients from surprise medical bills, boost transparency in medical billing, and reduce patients’ healthcare costs. It would prohibit providers from balance billing patients for emergency services or medical care the patient reasonably could have expected to be in-network, and from charging patients more than the in-network cost-sharing amount. 

Instead of using a benchmark payment rate to determine out-of-network reimbursement, this bill would provide a period for health plans and providers to negotiate an out-of-network reimbursement, followed by a mediated dispute resolution process if needed (an approach called “baseball-style” independent dispute resolution). Providers and insurers would have up to 30 days to negotiate a payment rate for out-of-network charges, after which point they would enter the arbitration process.

The Depts. Of Health and Human Service (HHS), Labor, and Treasury would be responsible for setting up the arbitration process required by this legislation.

Argument in favor

Surprise medical bills are an unwelcome surprise for too many Americans. This bipartisan bill would set a new process for ensuring that patients seeking needed care aren’t financially burdened by their pursuit of medical services.

Argument opposed

This legislation could put hospitals at financial risk by depressing the rates they’re able to charge for their services. It favors insurance companies over both hospitals and patients, which isn’t the correct balance between competing healthcare interests.

Impact

Medical patients; medical billing; surprise medical billing; health care providers; health care plans; medical billing disputes; and arbitration of medical billing disputes.

Cost of H.R. 5826

The CBO estimates that this bill would reduce premiums by 0.5 to one percent, saving the federal government about $5.5 billion over the 2020-2025 period.

Additional Info

In-Depth: House Ways and Means Committee Chairman Rep. Richard Neal (D-MA) — who characterizes surprise medical bills as “the outrageous result of a broken system that takes advantage of vulnerable patients” — introduced this bill to better protect patients against balance bills, enhance consumer protections in the health care market, improve transparency in medical billing, and empower patients with information about their health care costs. In a joint press release with lead Republican cosponsor Rep. Kevin Brady (R-TX), Rep. Neal said: 

“Our bipartisan solution to end surprise medical bills will protect Americans from unexpected financial burdens when receiving health care. We are putting patients first, providing unprecedented protections and transparency. Our bipartisan approach differs from other proposals in that we require – for the first time – that patients receive a true and honest bill in advance of scheduled procedures and we create a more balanced negotiation process to encourage all parties to resolve their reimbursement differences before using the streamlined and fair dispute resolution process. We recognize that any solution to this problem touches every part of our nation’s health care system. We want to minimize the burden on patients and keep the dispute resolution process neutral. Our priority throughout the painstaking process of crafting our legislation has been to get the policy right for patients, and we firmly believe that we have done that. We look forward to working with our Democratic and Republican colleagues in Congress, as well as the Administration, to advance this measure swiftly.”

In his opening remarks at this bill’s committee markup, Rep. Neal emphasized the importance of ensuring balanced negotiations between providers and insurance plans: 

“My concern with giving too much weight to such a benchmark rate is that we already know insurers are looking for any way they can to pay the least amount possible. They will work to push those rates down, regardless of what it means for community providers like physicians, hospitals, and our constituents who they employ.”

After this bill passed the House Ways and Means Committee on February 12, 2020, Rep. Neal said, “I think the legislation we have before us today is the right approach — it protects the patient, but also recognizes the private market dynamics between insurance plans and providers.” Ranking Member Rep. Kevin Brady (R-TX) concurred with Neal’s assessment, calling the Committee’s marked up bill “fair to all parties, favoring no one except the patient.”

The American College of Physicians is among a number of professional medical organizations that supports this legislation. In a February 14, 2020 letter, its president, Robert McLean, MD, wrote: 

“[T]he bipartisan Consumer Protections against Surprise Medical Bills Act of 2020, H.R. 5826... [is] a very significant and encouraging step toward resolution of what has become a growing and troubling problem for many patients… At the core of this issue is the need to protect patients by holding them harmless from surprise medical bills. The College has been a frequent advocate for Congress enacting such legislation. In particular, ACP has advocated that Congress enact legislation to protect patients from unexpected out-of-network health care costs, particularly costs incurred during an emergency or a medical episode in which services are provided by out-of-network clinicians without the patient’s prior knowledge. ACP is gratified that H.R. 5826 as reported by the Ways and Means Committee would bring about such protection for our patients and their families.”

The American Hospital Association, which also supports this legislation, says: 

“The legislation prohibits providers from balance billing patients for emergency services or medical care the patient reasonably could have expected to be in-network, and does not allow patients to be charged more than the in-network cost-sharing amount. …enables providers and health plans an opportunity to directly negotiate fair and appropriate reimbursement, thereby minimizing the government’s role in the process and reducing the risk that a federal legislative approach addressing surprise medical billing could cause wider market distortions.”

During this bill’s committee markup, Rep. Lloyd Doggett (D-TX) proposed — but ultimately withdrew — three amendments to this bill. Rep. Doggett’s amendments addressed timelines for Explanation of Benefits, qualifications of independent arbiters, and patient protections around delaying scheduled care. To assuage Rep. Doggett’s concerns, Chairman Neal guaranteed that Rep. Doggett’s concerns would be addressed as negotiations on this legislation moved forward.

Reps. Donna Shalala (D-FL), Joe Morelle (D-NY) and Phil Roe (R-TN) each proposed amendments that would have expanded this bill’s arbitration provisions. However, their amendments all failed. Although she cosponsored this legislation, Rep. Donna Shalala (D-FL) expressed concerns that this legislation favors insurance companies over health care providers:

“I have problems with it because it's not balanced. What I mean by that is the insurance companies are the big winners. The hospitals in my district and their employees get hurt, and they're the largest employers in my district.”

Rep. Kim Schrier (D-WA) added that this bill “essentially becomes a choice between whether you are going to just let doctors and insurance companies work this out in a neutral way or whether you’re going to put a thumb on the scale that benefits insurance companies and does nothing more to protect patients.”

Dr. Rebecca Parker, chief medical affairs officer at Envision Physician Services, a subsidiary of Envision Healthcare, and former president of American College of Emergency Physicians, contends that this proposal would decrease access to care and put hospitals at financial risk. She explains that because this proposal includes language to set benchmark rates to median in-network rates for a geographic area, it would jeopardize hospitals. “[For] any hospital that is in that safety-net [space], barely making it, if those rates gets dramatically cut, the hospitals will have to supplement and hospitals will close.”

The White House’s position on this legislation is unclear. Although White House spokesperson Judd Deere has raised concerns about arbitration, stating that it could increase healthcare costs, President Donald Trump tweeted favorably about this legislation after its committee passage: 

“Thanks to Ways & Means and Education/Labor Committees for your work on Bills to protect patients and end medical bill ripoffs! Work with Energy & Commerce, HELP committees to send BIPARTISAN bill to my desk!”

This bill’s future in the Senate is unclear; Senate Majority Leader Mitch McConnell (R-KY) hasn’t committed to supporting it or any similar legislation.

Numerous professional medical groups across the U.S., including the American Hospital Association, American Medical Association, Federation of American Hospitals, Association of American Medical Colleges, and more, support this legislation. The AARP and a variety of health advocacy organizations, such as the American Heart Association, American Kidney Fund, and others, also support this bill.


Of Note: The arbitration approach this bill proposes is already in use in some areas. For example, New York state law already removes patients from payment disputes between providers and plans and uses the baseball-style approach to settle payment disputes (this was implemented in 2014). 

In a Georgetown University Health Policy Institute study, researchers found that New York state officials saw a “dramatic” decline in consumer complaints about surprise medical billing after New York switched to the baseball dispute resolution process. They also found that independent arbitrator decisions were essentially even between plans and providers, and that the vast majority of cases were resolved before needing to go to arbitration.

Surprise medical bills, also known as “balance bills,” are issued to consumers who generally mistakenly thought they were getting health services covered by their insurers but instead went to an out-of-network provider. In such cases, insurance often covers a small portion of services and the patient is responsible for the remainder (the “balance”). In some cases, the consumer can be responsible for paying the entire bill. Most surprise bills come from specialty physicians — such as anesthesiologists, radiologists and emergency room doctors.

According to a study of nearly 350,000 people who received elective surgery from 2012-2017 conducted by six University of Michigan medical professionals, one in five patients incurred surprise medical bills related to their surgeries. These patients ended up owing an average of more than $2,011. This was in addition to the nearly $1,800 average cost that privately insured patients would owe to their insurance companies for elective surgery.


Media:

Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / jittawit.21)