While the debate has largely broken down as benchmark vs. arbitration, much more important is how generous the out-of-network payment mandate ends up being.
E.g., arbitration based on Medicare rates would be more consumer-friendly than a benchmark based on charges.
Or to take concrete state examples, CT's surprise billing law that uses an OON benchmark payment mandate at the 80th percentile of charges for emergency services is just as bad for consumers as NY's that relies on arbitration to get to the same end state.
Or in a more consumer-friendly fashion, NH's law that strongly anchors their arbitration process to median in-network rates ends up pretty similar to CA or OR laws that get to a similar place through a benchmark.
The core problems with arbitration are that it unnecessarily adds administrative costs (which flow through to premiums) and that it's opaque, therefore opening the door for provider groups & large PE companies to capture the process (especially once public attention recedes).
But the main federal arbitration proposals (Cassidy/Hassan and Neal/Brady) to date have been pretty clear that arbitrators should use median in-network rates as the core guidepost & specifically prohibit consideration of unilaterally-set provider charges.
The other key to look out for is if arbitrators are instructed to consider previously-contracted rates between the two parties. If arbitrators put weight on that, it could bake in the high rates PE-owned groups leveraged surprise billing to get.
Still would stop further erosion
And here are some details on the criteria via @PeterSullivan4
Not good news for consumers that the process will consider previously-contracted rates & it's very confusing why you'd take into account market shares, but the specific leg text here matters.
With that provision, it looks like the tentative deal is actually more provider-friendly / less consumer-friendly than the original Neal/Brady proposal.
Again, though, that PE-friendly criterion is only one of the items. Certainly worse than clear-cut anchoring to median in-network rates (or not having a benchmark or arbitration at all), but can still be an improvement on the status quo (depending on other details).
And here's the text of the new surprise billing agreement
Surprise billing would be prohibited for all OON emergency services (& post-stabilization), much OON care at in-network facilities, & air ambulances.
Out-of-network payment can be challenged to an arbitration process that's instructed to mainly consider median in-network rates.
Arbitration can be a bit clunky & opaque (& adds administrative cases), but the legislation does a pretty good job placing guardrails on the process to prevent abuses.
1) There's a strong anchor to median contracted rates
First, the paper itself provides some great new descriptive work on physician salaries that should prove valuable for future research, but I don’t think it tells us much about the normative question of whether doctor pay is too high/too low.