Congress addressed surprise medical bills, but the issue is not resolved

After years of wrangling with the topic of surprise medical bills, congressional leaders slipped a last-minute piece of legislation, the No Surprises Act, into the 5,593-page year-end spending bill, itself an 11th-hour push meant to wrap up work on which legislators refused to collaborate until the holiday recess beckoned. 

The good news is legislative movement to address an issue that most Americans agree is a problem. The bad news is that there is much work still to be done in the forthcoming regulatory implementation process to protect against consequences that could harm patient access to quality health care. 

Surprise medical bills are charges that patients receive for services they think are covered by insurance, such as unscheduled or emergency services, but insurance companies either refuse to pay for the treatment or attempt to pass these costs onto the patient. Either way, patients receive an unexpected medical bill in the mail after their trip to the doctor’s office or hospital — a rather unpleasant “surprise” indeed.

For more than a year, the country’s largest insurance companies promoted a proposal that would implement price fixing, euphemistically called “benchmarking,” as a purported answer to surprise medical bills. Just over a month before Election Day, a poll that surveyed voters in a few swing states found that Americans overwhelmingly reject the price-fixing approach to surprise medical bills: “Seventy-four percent support a third-party resolution that does not involve the federal government ‘benchmarking’ prices for certain services.” Georgia was among the states polled, demonstrating this issue’s salience with swing voters ahead of the state’s two U.S. Senate runoff elections. 

Insurance companies then took advantage of the congressional lame-duck session to again push price fixing under the guise of an independent dispute resolution (IDR) process that appears to favor insurance companies. This “compromise,” which led to the No Surprises Act, apparently balanced previously competing approaches between retiring Sen. Lamar Alexander (R-Tenn.), who chaired the Committee on Health, Education, Labor and Pensions, and Sen. Bill Cassidy (R-La.). 

Part of the reasoning was the ongoing accumulation of medical bills that patients have been forced to deal with because of the coronavirus — a legitimate concern. The main problem with an unfair IDR process, however, is the massive damage to health care access that inevitably will result. A letter sent to Congress by 43 organizations details recommendations for a fair IDR process. Regulators tasked with implementing the No Surprises Act — namely, the departments of Health and Human Services (HHS), Treasury and Labor — should take note.

The legislative language that was slipped into the final appropriations bill does not explicitly ensure that every relevant factor is considered equally and without bias during the IDR process. This is despite what some congressional committees claim. In addition, providers have only four days to initiate the IDR process if negotiations fail. That window is impractical and perhaps even impossible in most cases. 

Finally, the process mandates that physicians and other health care providers can be paid only four times a year, i.e., a 90-day “cooling off” period — an unprecedented move. Some experts have suggested that such draconian restrictions might be unconstitutional.

As the lead agency tasked with implementation, if HHS does not specifically mandate that the IDR entity it has been tasked to structure treats all IDR factors equally, then the new law indeed would be tipped in favor of big health insurance companies. Insurers would have no incentive to renew contracts for doctors who are paid above in-network rates. And as the process continued, payments to doctors would keep decreasing. Insurance profits would not face the same pressures, however, so patients would have no guarantee of realizing any of the savings. But as doctors are paid less — and therefore work less — patients could lose access to their medical providers.

The resulting impact on access to medical services would hurt all patients, and especially those in underserved communities. This would be bad in normal circumstances, but it is even worse given the pandemic. For example, the Centers for Disease Control and Prevention found that Latinos and Blacks with COVID-19 are hospitalized at a rate nearly five times higher than non-Hispanic whites. With COVID-19 cases continuing to spike across the country, it is more important than ever that Americans know they have access to health care when they need it — and that their insurance plans to which they pay premiums will cover the cost of necessary and potentially lifesaving medical care.

It would be a huge mistake — and tremendous disservice to patients — for the Biden administration to not address these outstanding concerns during the implementation process as soon as possible. Passing legislation to address the problem of surprise medical bills is a big first step. But regulators must finish the job by ensuring that the No Surprises Act and its IDR process is implemented fairly. 

Mario H. Lopez is president of the Hispanic Leadership Fund, a nonpartisan public policy advocacy organization that advances liberty, opportunity, and prosperity for all. Follow him on Twitter @MarioHLopez.