Congress might finally have a deal to stop surprise medical bills

Why a deal on surprise medical bills could finally pass — and why it might not.

Congress might finally, finally have a deal to end most surprise medical bills. Democrats and Republicans on health care committees in the House and Senate announced late on Friday evening that they have reached a deal to curb surprise billing.

It was a major breakthrough for the negotiations, which have been going on in some form or another for nearly two years.

While top members on three of the four committees — House Energy and Commerce, House Education and Workforce, and Senate Health — had previously agreed to terms, the House Ways and Means Committee had been a holdout. Committee chair Richard Neal (D-MA) and ranking member Kevin Brady (R-TX) effectively scuttled the earlier proposal, just when optimism was growing that it would be included in the 2019 end-of-year spending deal, by proposing an alternative plan. As recently as last week, according to the Hill’s Peter Sullivan, there was concern that Neal and Brady would once again prove too big an obstacle to getting a deal done.

But now everybody is on the same page — well, not quite everybody.

While House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer quickly announced their support for the bipartisan, bicameral legislation, Senate Majority Leader Mitch McConnell has been conspicuously quiet. His office has simply told reporters they are reviewing the plan. And that’s a big problem if this deal, breakthrough though it is, is ever going to become law and actually put a stop to most surprise bills.

We will return to the politics in a moment, but first, let’s cover the actual plan. As a reminder: Multiple studies have found that about one in five emergency room visits result in a patient being charged for out-of-network care. According to the Kaiser Family Foundation, even 16 percent of admissions to an in-network hospital still lead to out-of-network charges because one of the doctors seen by the patient wasn’t part of their insurance plan network. As Sarah Kliff documented extensively for Vox, those surprise bills can have balances in the tens of thousands of dollars — even if, for example, somebody got hit by a city bus and was taken to a hospital while unconscious.

That is the wrong this congressional plan wants to right. Throughout the debate, the most important point of contention was how to decide what an insurance plan would pay to an out-of-network hospital or doctor or ambulance service in these scenarios. One side of the debate (roughly represented by the first three committees to reach a deal and the health insurance lobby) wanted to default to something close to the average in-network price that is paid for the billed services in the area. The other side (represented by Neal, Brady, and the hospitals) wanted to use a third-party arbitration process to come up with a fair payment.

The final deal, helpfully laid out by the Brookings Institution’s Loren Adler on Twitter, is a compromise between the two. Read Loren’s thread if you want to get into all the wonky bits, but in brief:

• Surprise billing would be barred for out-of-network emergency care, for most out-of-network care at in-network facilities, and for air ambulances. The patients would be asked to pay only their in-network obligations for the care they received, and that is the end of it for them. The question then becomes what the insurer will pay the provider.
• There would initially be a 30-day period during which the insurance plan and the health care providers could try to negotiate a payment for the out-of-network claims. If they don’t reach an agreement, then arbitration would be the next step.
• The independent arbiters would primarily consider the average in-network charge for the services in question, as well as other information provider by the insurer and provider. Both sides would make an offer, and the arbiter would pick one based on the guidance stipulated in the bill.

Nobody would call it a perfect plan — ground ambulances are notably excluded from the prohibition on surprise billing — but most health policy experts seem to see it as a marked improvement over the status quo.

“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,” Adler wrote. “That’s a win in my book, even if it’s not my ideal solution.”

Now will it actually become law? Nobody I spoke with on Capitol Hill or K Street is sure yet. There are reasons to be optimistic and to be skeptical.

Why the surprise billing deal could actually pass — and why it might not

The most immediate hope for passage would be for these provisions to be included in an end-of-year spending deal. But that would require McConnell and his members to quickly get onboard.

The best thing the surprise billing deal has working in its favor is that everybody agrees these practices are unacceptable and want to get something done. It’s not often that we see four committees, both the top Democrat and the top Republican, supporting the same plan. President Donald Trump has signaled his support for ending surprise bills, and voters overwhelmingly want Congress to fix the problem (because either they have already been hit with a surprise bill or they worry they could be).

“This latest development is a breakthrough and increases chances of a final legislative deal on surprise bills,” Kim Monk, managing director at Capital Alpha Partners, told me. “But the clock is running. Senate obstacles and stakeholder opposition still likely pose big hurdles.”

McConnell is probably going to be the deciding factor, given Pelosi and Schumer are already pushing for the plan to pass. Based on my conversations Monday morning with lobbyists and aides (McConnell’s office is notoriously tight-lipped and did not respond to my request for comment), the Republican leader has got a few countervailing factors to account for.

Working in the deal’s favor is the heavy involvement of Senate health committee chair Lamar Alexander. The Tennessee Republican is a close confidant of McConnell’s and he is retiring at the beginning of next year. As I explained in a profile of Alexander, he has been angling for one last big bipartisan deal with which to end his 17-year Senate career.

“While I’m sure he’s like to do a solid for Alexander since he’s retiring, McConnell is also going to listen to the insurance companies,” a Republican health care lobbyist said, “who arguably ‘lost’ when this went in the arbitration direction.”

This person pointed out that the major health insurer Humana is based in McConnell’s home state of Kentucky and one of his former aides joined their lobbying shop this year. The hospitals will surely be heard, too, because while they’ve sounded more positive about the plan, the American Hospital Association said it still has some concerns.

So that’s where the deal’s political problems begin. And those problems likely extend beyond McConnell to other Senate Republicans who might not support arbitration, according to Monk. Some of the senators representing more rural states may also not appreciate air ambulances being singled out. McConnell holds immense individual discretion in deciding what bills get passed in the Senate, but he’s also probably not going to stump for a plan if much, or most, of his conference doesn’t support it.

Then there is the question of how hard Democrats are willing to push. While the most important Democrats are currently showing their support, Neal hasn’t always appeared enthusiastic about these proposals and even Schumer has been seen as ambivalent at times because of his closeness with the New York hospital industry. Will Democrats make surprise billing a red line or are they willing to put it into next year?

For now, the plan is to keep pushing for surprise billing being added to the omnibus spending plan. But you can also already hear Democrats setting up a scenario in which they blame McConnell if the deal doesn’t get included.

“They haven’t closed the door all the way,” a House Democratic aide told me of McConnell’s office. “But they’re definitely standing in the way right now.”

And thus, as of mid-December, nobody is confident that “the No Surprise Act” (as the deal has been dubbed) will actually become law despite this political breakthrough.

The one wild card, according to the GOP lobbyist, is whether Congress decides it needs more offsets to pay for the new spending being negotiated for the end-of-year bill. Even the Neal version of a surprise billing fix, less aggressive than the others, was projected to yield about $18 billion in savings for the federal government.

“I think the savings are probably going to be what gets this done,” this person said. “They need the offsets.”

But health care legislation passing through Congress can never be taken for granted until the votes are actually cast. Stay tuned.