Thread by @LorenAdler

THREAD

Today's bipartisan, bicameral surprise billing legislation isn't perfect, but it's a clear improvement over the status quo

Leg text: energycommerce.house.gov/sites/democrat…

Section-by-section: energycommerce.house.gov/sites/democrat…

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

2) It prohibits consideration of billed charges

cont.

3) The legislation incorporates provisions that make it difficult for a large provider group to rely exclusively on arbitration to generate high payments.

4) There will be ample public reporting if the process became inflationary.

The biggest weakness of the arbitration process is that it's instructed to consider previously contracted rates between the two parties, which helps the groups who previously leveraged surprise billing to get high contracted rates.

This is far from ideal & could accrue to the benefit of the large PE-owned groups who really leaned in to surprise billing leverage, but this is but one factor & I think it's clear that median in-network rates are to be viewed as more important in making determinations.

Arbitrators are also oddly told to consider the market shares of the insurer and provider group, which at first reads like a perverse incentive to consolidate. But I'm told the intent is actually to penalize high market-share actors (this should probably be made more clear).

Importantly, the balance billing bans themselves are well-crafted (in my opinion) to limit gaming -- for instance by not leaving open any notice & consent loopholes for services where a patient would never voluntarily choose an OON provider at an in-network facility.

All in all, this takes consumers out of the middle of surprise billing disputes, almost certainly at least won't increase costs, and I'd argue should allow the market to improve over time.

That's a win in my book, even if it's not my ideal solution.

In addition to the standard protections, the bill also bans surprise bills from air ambulances, where we found that 40% of patients were at risk of an average $20K surprise bill:
milbank.org/quarterly/arti…

& where the industry has become dominated by PE

brookings.edu/blog/usc-brook…

The legislation also includes grants to states to set up APCDs that would come with standardization of how the data would be reported/collected.

More on the value of this (& regulatory options) from @clinkeyoung & @MattAFiedler: brookings.edu/research/feder…

It sounds like all the relevant actors other than McConnell are on board with this surprise billing deal, so that's the key remaining piece here.

Pelosi, Schumer, and Trump have all made approving statements.

For states, this wouldn't supersede existing surprise billing laws for the fully-insured population, but it's also a bit cumbersome for a state to maintain a separate surprise billing remedy (& the regulations that go along with that).

If this bill passes, it also creates an easy opportunity for states with more inflationary existing laws like NY, NJ, TX, & CT to adopt the federal protection for all their fully-insured residents.

Just think about the complexity otherwise, where a provider would have to know whether the patient is in a fully- or self-insured plan before initiating arbitration, w/ diff cases going to diff arbitration systems with different rules.

Sounds like a bureaucratic nightmare.

And that's all I have (for now).

Excited to see an agreement coming together here. A federal solution offers so many benefits over the amalgam of state protections, even again if it's not perfect & required a couple more giveaways to provider groups (beyond the Neal/Brady bill).