The White House last night released its plan for solving the surprise billing issue, which has been a hot debate in Congress since late 2019.  Their very simple proposal would make it illegal for a patient to receive a surprise bill but does not mandate how a billing dispute would be negotiated or resolved between the insurer and the hospital, along with its out-of-network physician, for a healthcare service.

Surprise billing occurs when a patient goes to their insurance plan’s in-network facility, like a hospital, for a medical procedure and weeks later, receives a bill from an out-of-network health professional, such as a doctor, that provided a service without the patient’s knowledge.  It is also referred to as balance billing.

Congress has been unable to solve the problem.  Most members agree that patients should not be responsible for a surprise bill if they did their due diligence, went to an in-network facility, and paid any required cost sharing.  There are two main competing plans to solve the problem and hold the patient harmless.  One is rate-setting, which is preferred by insurance companies, would be a government-mandated price for the procedure, likely based on the going rate in the area of where the procedure was performed.  The other, which is favored by hospitals and physicians, is independent dispute resolution, or arbitration, where a neutral arbitrator would ask the insurer and the out-of-network provider to offer their proposed payments, review the proposals, and then provide a binding decision.

Citizens Against Government Waste (CAGW) has not been in favor of either of the proposals, seeing rate-setting as an upfront price control and arbitration as a price control delayed.  CAGW prefers a proposal offered by the Galen Institute’s Doug Badger and Brian Blase that would use truth-in-advertising protections for the patient.

President Trump’s plan leaves the resolution in the states, many of which have their own surprise billing procedures or if there is no state procedure, the plan would put the burden on insurers and hospitals, along with their out-of-network physician, to work it out amongst themselves.  The White House also wants their proposal to be part of any additional COVID-19 emergency spending plans that may be passed when Congress returns.

While CAGW has only learned about the White House’s surprise billing solution through news reports, and more details would help determine whether it would receive our full support, the concept is attractive.  We would prefer, however, that the issue be subject to further discussion and analysis in Congress rather than just being added to the next coronavirus relief bill.  

Even the main antagonists are intrigued by the plan.  According to Inside Health Policy, "the American Hospital Association said that a clean ban on surprise billing, such as the one the White House is discussing, would fall in line with the group's long-held position on surprise billing but it would not comment further.  The Federation of American Hospitals said what the White House is talking moves closer to the group’s position, but FAH needed to see more details.  America’s Health Insurance Plans, the DC-based health insurance lobby, pointed back to its existing positions on surprise medical billing, the first of which is to ‘prohibit providers from billing the patient for costs not covered by their health insurance provider.'"

Only time will tell if this surprise billing proposal will be accepted by Congress and enacted into law.  What is clear is that it is not rate-setting or price controls, neither of which are acceptable to groups like CAGW and the other members of the Coalition Against Rate-Setting, and it leaves it to the states and the private sector to figure it out.