Should Patients be Protected From Surprise Medical Bills? (S. 1531)

What is S. 1531?

(Updated February 12, 2020)

This bill — the STOP Surprise Medical Bills Act of 2019 — would protect patients from surprise medical bills in three situations: 1) emergency services, 2) non-emergency services following an emergency service at an out-of-network care facility and 3) non-emergency services performed by an out-of-network provider at an in-network facility. It would also protect patients that receive out-of-network laboratory or imaging services ordered by an in-network provider at their office from those surprise bills. In all of these scenarios, this bill would limit patients’ liability to the in-network cost-sharing, and patient-cost sharing for these services would accrue toward the in-network deductible and out-of-pocket maximum. Providers or plans/issuers who violate the surprise billing ban would be subject to civil monetary penalties. 

To handle billing disputes, the Health and Human Services (HHS) Secretary would consult with the Labor Secretary to certify entities to perform independent dispute resolution (IDR). These entities, which would be unbiased and unaffiliated with health plans/issuers and providers, would work with plans and providers to resolve billing issues. Patients would be completely removed from the IDR process, which would be “baseball-style” (meaning each party submits one final offer, and the loser pays, such that the non-prevailing party would pay for IDR process costs for the prevailing party). 

This bill would also include a number of transparency and notification requirements for various parties: 

• Providers with contracts with health plans/insurers to provide in-network services to enrollees would be required to notify contracted providers of any new insurance products the provider would be eligible for within seven days of offering the new product;
  
• Health plans/issuers would be required to clearly list in-network and out-of-network deductibles on insurance cards issued to their enrollees;
  
• Providers and plans/issuers would be required to tell patients and enrollees the expected cost-sharing for the provision of specific health care services within 48 hours of request;
  
• Providers/issuers would be required to make available price information for services available online to help patients know costs upfront;
  
• Hospitals would be required to disclose any financial relationships or profit-sharing agreements they have with physician groups on their website(s) and printed material(s);
  
• Hospitals would be required to include ancillary services on the bills they send to patients;
  
• Group health plans and issuers would be required to provide the HHS Secretary and Labor Secretary with annual reports on 1) the total claims submitted, paid and denied; 2) out-of-pocket costs to enrollees for out-of-network claims and the amount the plan/issuer paid; and 3) the numbers of out-of-network claims reported for emergency care and out-of-network claims for care performed at in-network facilities. 

This legislation would allow states with their own surprise billing laws to choose their own methodologies to resolve surprising billing disputes. Therefore, states wouldn’t have to adopt the IDR framework.

The HHS and Labor Secretaries would work together to study this legislation’s effects. They would submit a report to Congress on: 

• The financial impact on patient responsibility for health care spending and overall health care spending;
  
• The incidence and prevalence of the delivery of out-of-network health care service;  The adequacy of provider networks offered by health plans/issuers;
  
• The impact of connecting reimbursement to different claims databases;
  
• The number of bills that go to the independent dispute resolution process; and
  
• The administrative cost of the IDR process and estimated impact on insurance premiums and deductibles.

This bill’s full title is the Stopping The Outrageous Practice of Surprise Medical Bills Act of 2019.

Argument in favor

Surprise medical bills are an unwelcome surprise for too many Americans. This 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

The arbitration provision in this bill is opposed by some industry groups that say it’s a “snipe hunt” that distracts from broader issues regarding health services pricing. It could also wind up being more expensive than other pricing models, such as network pricing or regulated prices.

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 S. 1531

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sponsoring Sen. Bill Cassidy (R-LA) introduced this bill to protect patients from surprise medical bills: 

“Patients should be the reason for the care, not an excuse for the bill. We have worked for almost a year with patient groups, doctors, insurers and hospitals to refine this proposal. This is a bipartisan solution ensuring patients are protected and don’t receive surprise bills that are uncapped by anything but a sense of shame.”

Original cosponsor Sen. Michael Bennet (D-CO) adds: 

“The last thing a patient should have to worry about is being blindsided by unanticipated, and potentially financially devastating, medical bills. People deserve to know how much they are paying for health care services and procedures at the point of care. Our bill would help protect patients from surprise medical bills, increase transparency and alleviate the financial burdens imposed on consumers as a result of these bills. I urge my colleagues to prioritize this bipartisan legislation to give much needed relief and predictability to Americans throughout the country.”

The National Coalition on Health Care supports this bill. Its president and CEO, John Rother, says: 

“This bipartisan proposal would ensure that no patient will ever again be subject to outrageously high ‘surprise bills’ as the result of a hospital visit. Americans should have confidence that they will be treated fairly the next time they visit an emergency room. The National Coalition on Health Care commends Senators Cassidy and Hassan for their leadership on this issue, and we urge swift consideration by the Congress. Health care is expensive enough without families being subjected to price gouging just when they are most vulnerable.”

President Trump has promised to sign some form of surprise billing legislation.

Some Capitol Hill insiders say the arbitration provision in this bill could be a hurdle to getting this legislation over the finish line. At a Ways and Means Committee hearing on this issue, a representative from the trade group representing employer plans called the proposal a “snipe hunt” used by providers and hospitals to distract Congress from fixing deeper issues in the American healthcare system.

There may also be a case to made against arbitration from a cost-control perspective. Some experts believe having a regulated price or network matching, rather than allowing arbitration, is better policy because arbitration could end up leading to higher prices than the other two options, mitigating the cost-saving potential of surprise billing legislation.

This legislation has 26 bipartisan cosponsors, including 14 Democrats and 12 Republican. It also has the support of the National Coalition on Health Care and the National Patient Advocate Foundation.

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.

Media:

• Sponsoring Sen. Bill Cassidy (R-LA) Press Release
  
• Sponsoring Sen. Bill Cassidy (R-LA) Section by Section
  
• NPR
  
• Vox
  
• Patient EngagementHIT
  
• Georgetown University Health Policy Institute Study (Context)