November 27, 2019

Some months ago, the healthcare industry was abuzz with whispers and rumors of a major move on the part of the federal government to intercede in the surprise medical bill debate.  For years, patients have bemoaned the injustice of receiving an exorbitant bill for services they had assumed were performed by a participating provider only to learn later that the clinician was not in-network with the patient’s insurance.  The cacophony of complaints became so pronounced that legislators in the various states began to pass measures; first, dealing with emergency room bills, but then addressing a greater range of health-related charges.

Not to be outdone, bills began forming and circulating on Capitol Hill to address the situation, with one senator, Bill Cassidy of Louisiana—a medical doctor—leading the charge.  Last month, Senator Cassidy made a statement that caused many in the healthcare industry to sit up and take notice.  It no doubt created serious concern on the part of those providers who most often are the source of these so-called “surprise medical bills.”

A Bold Prediction

Speaking at the Medical Group Management Association (MGMA) annual meeting in New Orleans, Senator Cassidy, R-LA, informed the assembled administrators and healthcare executives that he believed that national legislation addressing surprise medical bills will be passed by Congress by the end of this year.  His specific statement was as follows:

“When we go back over the next month or so, there’ll be some decision as to where we end up between … two [proposed solutions]; and I suspect some legislation will pass, and it’ll pass by the end of the year.”

I’m sure this strongly asserted prediction caused quite a stir in “the city that care forgot.”  After all, it was made by the main proponent in the current push for surprise medical bill legislation—a man who is in the perfect position to know the likelihood and timing of its passage.

And Then There Were Two

When this process started months ago, multiple bills with wide-ranging proposals made the rounds in Washington.  All of those creative concepts have now coalesced into two major options—specifically as to payment methodology.  That is, these two proposed solutions, as referenced in the Cassidy quote above, provide for different approaches on how out-of-network providers will be reimbursed for their services.  One idea is to pay them based on a “benchmark rate,” while the other involves the use of arbitration.

The bill introduced by Senator Cassidy and his co-sponsor, Senator Maggie Hassan, D-NH, provides that a patient who receives out-of-network medical services at an otherwise in-network facility (or any healthcare facility in an emergency situation) would only be required to pay what the in-network charges would have been.  According to Cassidy, if the physician or hospital is paid by the health plan at a rate less than they believe is fair, the parties will have a period of time in which to negotiate.  If a resolution cannot be reached, the case would be submitted to an arbiter, who would attempt to arrive at a fair rate.  This methodology is already in use in the state of New York.

Others in Congress are strongly considering the benchmarking approach implemented in California back in 2017.  The California measure requires health plans to pay out-of-network health professionals a benchmarked, locally negotiated, market rate.  According to a recent New York Times article, some believe this may be the more likely model to be woven within the final framework of the congressional legislation.

A Not So Lone State

Meanwhile, back at the ranch, legislators in Texas are among the latest to try and craft a state-driven solution to surprise medical bills.  Following the example of other legislatures, like those in California, New York and Florida, the politicos in Austin passed a bill that was signed by Governor Abbot, and that is scheduled to go into effect January 1, 2020.  The law bans surprise medical bills where patients face a lack of choice relative to (a) the clinician providing their care, or (b) the facility where they receive their care in medical emergencies, and in cases of out-of-network lab and imaging work.

The new law will also prohibit balance billing where a patient receives care from an out-of-network clinician in connection with a scheduled, i.e., non-emergency, procedure at an in-network facility. The law only applies to residents who have insurance regulated by the Texas Department of Insurance.

Again, Texas is just another example of the trend we’re seeing among the individual states to take matters into their own hands as it concerns the balance billing and surprise medical bill issue.  Unwilling to wait on Washington to craft a viable solution, the Lone Star State and a few others have created their own.  It will be interesting to see how well the emerging legislation on Capitol Hill will mirror surprise billing laws in the states, and to what extent the state provisions will be affected by a national balance billing law.  We should know soon.