Surprise Medical Billing Update
Surprise Medical Billing Update
by Christoper E. Condeluci, Principal and sole shareholder of CC Law & Policy PLLC in Washington, D.C.
What’s Going On With Surprise Medical Billing Legislation?
- For the past month or so, the surprise medical billing issue has taken a back-seat to efforts to lower prescription drug prices. For example, instead of “marking up” surprise medical billing legislation during the October work period, the House Ways and Means (W&Ms), Energy and Commerce (E&C), and Education and Labor (E&L) Committees “marked-up” Speaker Pelosi’s drug-pricing bill, paving the way for a full-House vote on Speaker Pelosi’s drug-pricing bill at some point.
- Analysis: HOWEVER, House Democrats are ramping up their efforts on impeachment, which will likely push back a vote on any legislation to lower prescription drugs to at least November or December. Also influencing the House’s action on drug pricing is the fact that Speaker Pelosi’s drug-pricing bill will NOT be going anywhere in the Senate. And, while there may be some overlap between the Senate Finance Committee’s prescription drug bill and Speaker Pelosi’s prescription drug bill, most of the conservative Republican Senators – and even the few moderate Republican Senators – are signaling that they do NOT like the Senate Finance Committee’s proposal. All of this is culminating into a belief that we may NEVER see any legislative action on any prescription drug bill before the end of the year. Enter Stage Right: The surprise medical billing issue. Now that efforts to lower prescription drug prices are stalling, the logical thing is for the House and the Senate to pivot back to considering surprise billing proposals. For the Democrats, if the only thing they have to show voters is their efforts to impeach the President – with little to no action on substantive policy matters – it only makes sense that Democratic Leadership tries to get some sort of “win” on the legislative-front. And that “win” could be surprise medical billing legislation. After all, there is bi-partisan support for enacting legislation that would curb the surprise medical billing problem. As you have heard me report, everyone is on board: The White House, House Democrats and Republicans, and Senate Republicans and Democrats. BUT, the devil-in-the-details. They always are! Having said that, I do NOT see many new ideas to curb the surprise medical billing problem. Instead, I believe that Democratic and Republican Leadership only have 3 proposals to choose from: (1) Requiring providers to accept a “benchmark” rate equal to the median negotiated rate for a medical service in a geographic area, (2) Requiring insurance companies and self-insured employers to go to “arbitration” with the providers, or (3) A hybrid of #1 and #2, which is a “benchmark” rate up to a specified dollar threshold (e.g., $1,250 or $5,000) and then “arbitration” for balance bills above the specified dollar threshold. You have heard my suggested approach: I still stand by the idea of trying to throw-a-bone to local hospitals while shutting down those providers that arbitrarily choose to stay out-of-network so they can charge patients – and the insurer and self-insured plan – more money. What is my idea? Limit the out-of-network providers to a “benchmark” rate ONLY, while allowing local hospitals to try to get paid more than the “benchmark” rate through a hybrid of a “benchmark” rate up to a specified dollar threshold (i.e., $5,000) and then “arbitration” for balance bills above the specified dollar threshold. BUT, I do not believe this idea is going to carry-the-day. The insurers and the employer community have been dead-set against any type of “arbitration” under any circumstance. And, the providers are vehemently opposed to a “benchmark” rate for balance bills above a paltry $600. Soooo, how is this story going to end? In my opinion, while much of the policy on Capitol Hill is determined by staff, the final decision on surprise medical billing will be a “member-level” decision based on “member-level” discussions. What I mean is, while the providers and the insurers/employer community can lobby staff all day long, the final decision will come from the members themselves. And the members are going to have to decide (1) whether they want to push-back on the big money that is being thrown at this issue by the providers (and in particular, private equity) and (2) whether they want to take advantage of the savings that is produced by, for example, a “benchmark” rate proposal, so the members can (3) exclaim to voters that they are taking steps in Washington, DC to lower health care costs. OR, members are going to choose the providers and private equity, both of which are heavy campaign-contributors and constituencies that Democratic and Republican Leadership will need if both Leaderships ever want to pass legislation to lower prescription drug prices.
Why Give the Hospitals More Than Just a “Benchmark” Rate?
- As I have explained in past updates, surprise medical bills are often times produced when a patient is rushed to an out-of-network hospital in an emergency. In these types of situations, it is generally NOT the hospital’s fault that they are NOT in the patient’s network. And, it is NOT the patient’s fault that they were rushed to a hospital that was NOT in their plan’s network. The other situations where surprise medical bills are generated are in cases where a provider – who specifically chooses to stay OUT of a plan’s network so they can get paid more money – treats a patient at an in-network medical facility. This latter situation is purposeful, and it is this type of behavior that has led to the surprise medical billing problem in the first place.
- Analysis: Sooooo, why reward bad behavior by giving those providers who choose to STAY out-of-network the ability to go to “arbitration” so they can get paid more than the “benchmark” rate? And why should we NOT help out hospitals – who for no fault of their own treat patients that are out-of-network in an emergency situation – by giving them a chance to get paid more than the “benchmark” rate? On this latter point, you can’t help but have some sympathy for the hospitals. As I also have explained, politically, members of Congress are ALWAYS going to try to help their home-State hospitals. And, members of Congress are getting a lot of pressure from their home-State hospitals to go with an “arbitration” ONLY process. This pressure is one of the reasons why I believe that those members who like the “benchmark” ONLY proposal (because it lowers health care costs and it saves money) are hesitant to say YES to a “benchmark” ONLY rate. And that is why I am suggesting that hospitals should get more than a “benchmark” ONLY rate, at least in emergency situations. In my opinion, this gives members of Congress some “political cover” to say to their home-State hospitals: “I am trying to help you here because I know how important you are as a job-creator and as an economic engine for our local community.” AND, this allows members to stick with – and impose – the “benchmark” ONLY proposal on those providers that are behaving badly by choosing to stay out-of-network. This will give these members some much-needed “savings” too, which is “king” when it comes to legislating. Here is another reason why it is advisable to give hospitals more than a “benchmark” rate: Politically, you want the hospitals “on your side.” What I mean is, the hospitals have some lobbying-muscle, and if you can get the hospitals off of lobbying for “arbitration” ONLY – and onto lobbying for some sort of compromise that gives hospitals more than just a “benchmark” rate – that will help your own lobbying efforts. More specifically, if you can “peel off” the hospitals from the other providers and the private equity-crowd, you can isolate these other providers and private equity-backed groups and you can explain how their bad behavior has gotten us all into this mess in the first place. This would allow members of Congress to reasonably distinguish between the hospitals and these other providers, and it will allow members to justify why they are treating hospitals better than these other providers. In my opinion, if you do NOT somehow treat hospitals differently by giving them more than just a “benchmark” rate, members of Congress are going to throw-their-hands-up-in-the-air and simply go with the E&C Committee approach that was “marked-up” back in July which was (1) a “benchmark” rate equal to the median negotiated rate for a medical service in a geographic area for balance bills below $1,250 and (2) “arbitration” for any balance bills above $1,250. Note, this proposal applies to ALL providers, regardless of whether they are hospitals, or providers who specifically choose to stay out-of-network, or private equity-backed providers. Last comment: I make the above statement because those stakeholders that support a “benchmark” ONLY rate – and those stakeholders that are dead-set AGAINST “arbitration” – are running out of time. As stated, both Democrats and Republicans need – and want – a legislative “win” before they leave town in December so they can go home and tell their voters that they are capable of actually legislating. Nov. 22nd is NOT that far away, and I think Democratic and Republican Leadership want to “make a call” by then.
Presidential “Politics” Update
The Debate Over Medicare-for-All Turns to “How Do You Pay for Medicare-for-All”?
- I am sure you are reading the same headlines that I am. And the latest discussions about Medicare-for-All is how to pay for it. It’s not like we didn’t ask this question before. I did many times in my previous updates. BUT, now that the Democratic Presidential Candidate field is narrowing a bit – and as the leading Candidates for the Democratic nomination continue to jockey with one another – the voters and the media are FINALLY asking about the “details” of a Medicare-for-All program. And one of the most important “details” – if not the most important “detail” – is how a particular Candidate is proposing to pay for Medicare-for-All.
- Analysis: What seems to be driving this increased attention on the question of “how do you pay for Medicare-for-All” is a report that the Center for a Responsible Federal Budget recently released with specific findings on how the $30+ trillion price tag of a Medicare-for-All program could be paid for. Here is something that Axios wrote when covering the Center for a Responsible Federal Budget report: Financing full-blown, single-payer Medicare for All — which is estimated to cost roughly $30 trillion over a decade — would require aggressive changes in taxes, spending or borrowing, according to an analysis by the Committee for a Responsible Federal Budget.
Between the lines: “Tax increases on high earners, corporations, and the financial sector by themselves could not cover much more than one-third of the cost of Medicare for All,” the report concludes — meaning that the middle class would be forced to shoulder some of the burden.
Yes, but: As with everything, this would create winners and losers. Plenty of people would end up paying less in taxes than they currently pay for private health care.
Details: Some of the ways to pay for “Medicare for All,” per CRFB, include:
- A new 32% payroll tax on wages
- An additional 25% income tax
- A 42% value-added tax on consumption
- A “public premium” averaging $7,500 per capita – or $12,000 per person who wouldn’t otherwise be on public insurance
- More than doubling all individual and corporate income tax rates
- Reducing non-health federal spending by 80%
- More than doubling the national debt
These policies would have massive economic impacts, reverberating far beyond health care
Axios’s last statement here sounds familiar. The Congressional Budget Office (CBO) said something similar when the agency examined what a “single-payer” system might mean from a “coverage” and “cost” perspective. Below is one of the many comments I made about the CBO report back in May: CBO led with the following statement: “Establishing a single-payer system would be a major undertaking that would involve substantial changes in the sources and extent of coverage, provider payment rates, and financing methods of health care in the United States.” Importantly, CBO wasn’t analyzing a particular proposal for a single-payer system. Instead, CBO was merely identifying a number of design questions for members of Congress to consider. But still, leading off with a sentence like that made most if not all single-payer system advocates cringe. Now that the media is finally focusing on the question of “how do you pay for Medicare-for-All” – and now that think-tanks and other economists are analyzing and suggesting various payment options for a Medicare-for-All program – I cannot see how the leading Democratic Presidential Candidates who support Medicare-for-All (e.g., Candidates Warren and Sanders) can run away from these eye-popping suggestions. I also cannot see this happening: I cannot see how the leading Democratic Presidential Candidates can explain what a 32% increase in payroll taxes, or 25% more in taxes, or reducing spending on things like roads, and education, and the military would – and could – mean for our economy, let alone being able to explain how all of this will impact someone’s life, and their job, and their retirement savings. Last comment: Personally, I am having a hard time wrapping my head around the unfathomable changes in how our taxes would work – and how our government would spend money – under a Medicare-for-All program, and I do this health care analysis stuff every day! And this is why I cannot see how John Q. and Jane Q. Public – who are not geeks like me because they have better things to do – will be able to wrap their head around this stuff. And – at least in my opinion – if the leading Democratic Presidential Candidates cannot adequately explain how John Q. and Jane Q. Public will be impacted by Medicare-for-All, I cannot see any of these Candidates winning in November 2020. I could be wrong though.