A bipartisan group of senators released legislation Thursday to ban surprise medical bills, and landed on arbitration as a final resort if hospitals, specialty physicians or insurers aren't happy with the pay rate proposed for out-of-network treatment.
The new bill from Sens. Bill Cassidy (R-La.) and Michael Bennet (D-Colo.) has been in the works nearly a year. Under the proposal, a patient's insurer would automatically pay the out-of-network doctor or hospital about the same rate it would pay if the service were in network.
But adding arbitration gives industry an appeals process that hospitals and specialty physicians want.
At a press conference Thursday, Cassidy said he sees the method as landing on a "sweet spot" where doctors keep getting paid but have recourse.
Cassidy, Bennet and other members of the working group — including Sen. Maggie Hassan (D-N.H.) who first proposed arbitration last fall as a way to settle disputes — have been working on legislation for months, through extensive discussions with industry players and patient advocates. Cassidy told reporters that he was skeptical of the approach at first, but that he and Hassan worked together on the bill.
However, their measure isn't the final word for the upper chamber: the Senate health committee is expected to release a packet of proposals shortly, all with the aim to lower healthcare costs. This package will include a provision on surprise medical bills.
The Cassidy bill uses the median negotiated insurer rates as the benchmark rather than charges. Specialty physician groups like emergency department doctors and anesthesiologists, have been pushing for a policy like the one New York adopted for its individual market: where a percentile of average charges is used as the benchmark with arbitration as a backstop.
But analysts of all stripes warn that basing a pay rate on average charges from typically expensive doctors could bake in higher rates and drive up premiums, whether an arbiter is involved or not.
The bipartisan coalition of senators who gathered Thursday to introduce the bill all voiced their constituents' deep dissatisfaction with the current healthcare system, where surprise medical bills are a prominent feature.
Bennet told reporters that his scheduler had recently received a bill from the anesthesiologist who attended the birth of her baby — one year later. Sen. Todd Young (R-Ind.) read from a constituent letter that described balance billing practices as fraud.
Senate health committee Chair Lamar Alexander (R-Tenn.) told President Donald Trump last week he hopes to send a healthcare package to his desk by July, as the Trump administration and Congress push for more transparency across the healthcare system.