Surprise Medical Billing Update

February 24, 2020

By Maddie Mason, Senior Associate, Policy

Surprise medical bills, which are unexpected medical bills that come after someone with insurance inadvertently receives care from an out-of-network provider at an in-network facility, can happen to anyone, even those who spend significant time and effort to ensure they are receiving care from in-network providers. When it does happen, it can often place a heavy and unanticipated financial burden on insured individuals. The National Health Council (NHC) and our member organizations remain gravely concerned about the negative impact these surprise bills have on patients and their families, and we have worked diligently to bring this issue to Congress’ list of priorities. Fortunately, Congress shares this concern and is working on several pieces of legislation to address the issue, with a few having been passed out of relevant Committees. However, Congressional leadership has still not reached an agreement on exactly how to completely address the issue, and a final agreement is likely to be a compromise among the following three approaches:

Bipartisan and Bicameral House Energy & Commerce and Senate Health, Education, Labor & Pensions Committee Compromise

In December 2019, the House Energy and Commerce (E&C) Chairman Frank Pallone (D-NJ) and Ranking Member Greg Walden (R-OR) and Senate Health, Education, Labor, & Pensions (HELP) Chairman Lamar Alexander (R-Tenn) announced that they came to an agreement on bipartisan legislation to address surprise medical bills. There was hope this bill might be included in the end-of year spending package, but it ultimately was not included. This proposal would prohibit patients from receiving a balance bill from an out-of-network provider, unless the patient consented to the costs at-least 72 hours in advance. When surprise bills do happen, it includes a mechanism to allow payers or providers to initiate an arbitration process for services that are above $750, or $25,000 for air ambulances. Anything below the set-rate of $750, would require insurers to pay the median in-network rate for services in a given region.

In an emergency care situation, patients would only be responsible for the median in-network amount for out-of-network emergency services.

House Education & Labor

On Feb 11, the House Education & Labor Committee approved the Ban Surprise Billing Act, which is a bipartisan bill that aims to protect patients from surprise billing.

This bill is comparable to the E&C and HELP Committee compromise with some small additional patient protections. Notably, it would also apply to large employer health plans that are governed by the Employee Retirement Income Security Act (ERISA). 

House Ways & Means

On Feb 12, the House Ways & Means Committee approved their version of legislation to address surprise medical billing, the Consumer Protections Against Surprise Medical Bills Act of 2020.

This bill differs significantly from the other proposals. In this bill, any billing dispute would instigate a 30-day negotiation period where the provider and the insurance company share information and try to resolve the dispute between themselves. If an agreement cannot be met in this timeframe, either party can initiate an arbitration process, bringing in an independent third party for payers and providers to share their final offers. While there is no set rate for out-of-network services, the mediator will take into consideration median contracted rates when solving a dispute.

Before receiving services, providers must issue patients a cost estimate for the services, a description of the service, and whether providers are in-network.

If a patient receives emergency medical treatment, providers are prohibited from sending a balance bill for out-of-network services. This bill does not specify the use of air ambulances in an emergency.

Next Steps

Congress has some looming deadlines that we hope will drive action on surprise bills.  While all health-related committees have marked up their legislation, they differ in how payments are resolved when surprise billing happens. The NHC is pleased that all of them meet the two most important goals of the patient community: preventing surprise bills from happening and holding patients harmless when they do happen. Right now, the focus is on attempting to reach a compromise proposal that can be included with legislation to address extensions of tax policy that must be passed by May 22. The NHC will continue to work with other patient groups to push Congress to act on this important issue by reaching a compromise in the best interest of patients.