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In Modern Healthcare, TRP’s McCarthy Offers Context on Surprise Billing Debate

July 31, 2020

In an article for Modern Healthcare, TRP Senior Vice President Shea McCarthy shared his insight on the current state of the push for action on surprise billing as the negotiations on the next COVID-19 relief package continue. The article highlighted a recent report from the Department of Health and Human Services (HHS) that argues Congress should act on surprise bills, as the COVID-19 and transparency-related measures the administration has pushed are not sufficient. In discussing this report, McCarthy astutely pointed out that by not favoring a specific legislative proposal, the Trump administration is essentially not supporting any of the three main approaches that have emerged in Congress thus far. “Instead, the latest report from HHS has simply added more confusion to the debate on how to address this politically sensitive issue,” said McCarthy.

The article in its entirety can be read below

“Instead, the latest report from HHS has simply added more confusion to the debate on how to address this politically sensitive issue,” McCarthy said.

Surprise billing fix faces major hurdles in last-minute push
Advocates of protecting consumers from surprise medical bills using a market-based payment benchmark are pushing to include their fix in the next COVID-19 relief package, but they face significant hurdles.

Two key House committees have revived discussions on surprise medical bill fixes, but it’s unclear whether they will be able to reach consensus in time for the next COVID-19 package, which could be the last major policy vehicle before the 2020 election. Even if they reach an agreement, the package’s prospects in the Senate look bleak. The White House wants a fix but is refusing to take sides.

Hospital and physician groups argue that a benchmark payment measure would hurt their payment rates. Hospital trade groups including the American Hospital Association, America’s Essential Hospitals, and the Federation of American Hospitals wrote to congressional leaders on Thursday bashing payment benchmarks and appealing to lawmakers to spare their bottom lines that have been harmed by COVID-19.

“Legislative proposals that would dictate a set payment rate for unanticipated out-of-network care are neither market-based nor equitable, and do not account for the myriad inputs that factor into payment negotiations between insurers and providers,” the groups wrote.

Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy, disputed the characterization that benchmarking proposals favor insurers exclusively over healthcare providers.

“It’s pretty neutral for insurers & most providers, outside of the big staffing companies leveraging surprise billing today,” Adler tweeted.

Hospitals favor an approach advanced by the House Ways & Means Committee. Ways & Means Chair Richard Neal (D-Mass.) was a primary reason why a surprise billing fix wasn’t included in a spending package in December.

“The chairman is optimistic that an agreement can be reached soon that puts patients first and protects their access to care, particularly in communities where providers have been hit hard by the COVID-19 crisis,” a Neal spokesperson said.

The White House has advocated vaguely for a solution to surprise medical bills since the end of 2019. HHS on Wednesday released a report arguing that Congress should act on surprise bills because transparency measures and coronavirus-related surprise billing measures advanced by the administration are not sufficient.

“It’s time for Congress to do what we all agree is necessary: combat surprise billing with an approach that puts patients in control and benefits all Americans,” HHS Secretary Alex Azar wrote in a statement.

However, HHS did not advocate for a certain fix. Instead, the agency highlighted similarities between three leading legislative proposals and said they all fit the administration’s desired criteria.

A senior HHS official told reporters Wednesday, “We have purposely tried to avoid being determinative in respect to what we think the exact legislative outcome should be knowing that is an active issue before the Congress.”

By supporting all three proposals, the Trump administration is essentially not backing any of them, said Thorn Run Partners senior vice president Shea McCarthy.
“Instead, the latest report from HHS has simply added more confusion to the debate on how to address this politically sensitive issue,” McCarthy said.

The HHS report did not evaluate an open-ended surprise billing ban pushed by the White House. ERISA Industry Committee senior vice president of health policy James Gelfand said it was notable that the HHS report also highlighted the role of private equity-backed physician staffing firms in the practice of surprise billing.

“This is new coming from the White House, not some lobbying group,” Gelfand said.

A bipartisan group of committee leaders from the leading Senate committee addressing the issue and two House committees argued that their approach that combines a market-based benchmark payment with an arbitration backstop already has wide consensus.

“The six of us — progressive Democrats and conservative Republicans — have agreed on a transparent, market-based solution that will lower patients’ premiums and will not interfere with strong protections states already have in place,” said Senate health committee Chair Lamar Alexander (R-Tenn.), Senate health ranking member Patty Murray (D-Wash.), House Energy & Commerce Chair Frank Pallone (D-N.J.), Energy & Commerce ranking member Greg Walden (R-Ore.), House Education & Labor Committee Chair Bobby Scott (D-Va.), and Education & Labor ranking member Virginia Foxx (R-N.C.).

However, Senate Majority Leader Mitch McConnell (R-Ky.) has struggled to keep his caucus united on another comprehensive COVID-19 package, so some GOP Senate aides and opponents of the benchmarking approach are skeptical that he would agree to tack on a bill that divides his caucus.

Federation of American Hospitals President and CEO Chip Kahn said it’s too early to tell whether any significant legislation could come out of the buzz, as committee chairs have been trying to get their legislative solutions included in several recent legislative packages.

“At the same time, there might be a compromise that addresses the problem that all the players, consumers and providers can all live with,” Kahn said.