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SPBA Signs on Letter to Congress Regarding Surprise Billing

April 02, 2019


The Honorable Frederica S. Wilson                       The Honorable Tim Walberg
Chair                                                                       Ranking Member
Subcommittee on Health, Employment,                 Subcommittee on Health, Employment,
Labor and Pensions                                                Labor and Pensions
Washington, DC 20515                                           Washington, DC 20515

Dear Chair Wilson and Ranking Member Walberg:

We applaud you for holding a hearing examining surprise billing. Reflecting the goal of
employers to protect patients from surprise medical bills without undermining network
participation or resulting in higher health care costs for all consumers, we urge Congress to pass
legislation consistent with the following provisions:

Protect Patients from Surprise Medical Bills

>>  The goal of any federal surprise balance billing legislative solution is to protect patients
in situations in which they lack a choice of providers. It is vitally important, however,
that any legislative solutions not discourage network participation or result in higher
health care costs for all consumers. Patients often lack any meaningful choice of
provider when they obtain care in out-of-network emergency rooms, and when a patient
receives services in in-network facilities from out-of-network professionals, particularly
with respect to a small number of provider specialties.

>> To protect consumers and families, federal legislation must ensure that patient costsharing
is limited to in-network amounts for emergency services performed at an out-ofnetwork
facility or for treatment by out-of-network facility-based physicians performed at
in-network facilities, and prohibit providers from imposing additional “surprise” balance
bills in these circumstances.

>>  Congress should implement this change through an amendment to section 2719A of the
Public Health Service Act (“PHSA”), which applies to both group and individual
commercial insurance, and which would apply to insured and self-funded group health
plans through section 715 of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”).

Disclosure and Transparency

>>  For surprise balance billing that occurs at an in-network facility and follow-up care from
emergency treatment at an out-of-network facility, federal legislation must require
disclosure of out-of-network professional costs at the time of scheduling. This disclosure
will help ensure that patients can make an informed decision and schedule procedures
when an in-network professional is available.

>>  Facilities such as hospitals should also be required to list prominently on their websites,
whether they lack available providers who participate in networks which the facility
participates in – including what those specialties are, and the likelihood that a patient may
thus be seen by an out-of-network provider.

>>  Much of the surprise over unexpected balance billing can be eliminated by providing this

>>  Congress could implement this disclosure requirement directly on hospitals (through
Medicare’s minimum requirements for hospitals under 42 USC § 1395x(e)(1)-(8)), or
through an amendment to section 2718(e) of the PHSA, which requires hospitals to
disclose standard charges for items and services provided by the hospitals.

Required Reimbursement

>>  Out-of-network providers frequently bill well in excess of negotiated rates and Medicare
reimbursement for these services, as opposed to the actual value of the service provided.
A study by Ge Bai and Gerard F. Anderson, published in JAMA in 2017 comparing
physician charge-to-Medicare payment ratio across specialties found that anesthesiology
had the highest median (5.8), followed by interventional radiology (4.5), emergency
medicine (4.0), and pathology (4.0).

>>  To ensure equitable payment for the services provided without discouraging network
participation or resulting in higher costs for all consumers, legislation must set a
reasonable federal reimbursement structure that (1) establishes a federal cap for
emergency services at an out-of-network facility at 125 percent of the Medicare rate, and
(2) requires all providers at an in-network facility to accept in-network rates.

>>  Conversely, without reasonable limitations on the reimbursement rates, out-of-network
providers in surprise balance billing situations will have an incentive to bill even higher
rates in order to achieve maximum payment through any binding arbitration mechanism.
Binding arbitration is an inefficient and ineffective approach to addressing surprise
billing and should not be included as a legislative solution. The experience of the
mediation process in Texas is instructive. According to a recent report, the Texas
Department of Insurance received just 43 requests from consumers for mediation in
2013. In 2014, the number of requests grew to more than 600 and have climbed steeply
ever since. There were 4,519 requests in 2018, creating a significant backlog,

>>  Requiring facilities to bundle medical services for covered procedures into a single
payment also could help address this problem if structured properly. In the case of
bundled services performed by out-of-network providers, the costs of those services
within the bundle cannot exceed either the allowable in-network rate or 125% of
Medicare. But, care must be taken to ensure that the contracted bundled payment is final
and not merely a progress point toward further negotiation.

>>  Congress should implement this change through an amendment to section 2719A of the
PHSA, which applies to both group and individual commercial insurance, and which
would apply to insured and self-funded group health plans through section 715 of

Ambulance and Outsourced Emergency Departments

>>  A significant concern to both patients and plans are the massive costs associated with
non-participating ambulance, air ambulance, and emergency department services.

>>  According to GAO’s analysis of the most complete data identified for air ambulance
transports of privately-insured patients, 69 percent of about 20,700 transports in the dataset
were out-of-network in 2017.

>>  Ambulance, air ambulance, and emergency services are essential to ensure that patients
receive the care they need in the most urgent of situations. Subjecting patients in the
most dire of circumstances to balance billing exposes patients to material liabilities in
order to receive the care they need.

>>Any legislative solution for surprise balance billing should also specify that ambulances
and air ambulance services are considered emergency services for purposes of the
statutory limitations on balance billing and reimbursement rates.

>>  Further, Congress should include provisions to eliminate problematic incentives in which
an in-network facility could profit by allowing or encouraging an outsourced out-ofnetwork
emergency department to surprise bill in-network patients.

>> Congress should implement this change through an amendment to section 2719A of the
PHSA, which applies to both group and individual commercial insurance, and which
would apply to insured and self-funded group health plans through section 715 of ERISA.

We look forward to working with you to address the burden of surprise medical billing.


American Benefits Council
Associated Builders and Contractors, Inc.
Associated General Contractors
Auto Care Association
Colorado Business Group on Health
Corporate Health Care Coalition
Council for Affordable Health Coverage
Economic Alliance for Michigan
Florida Health Care Coalition
Food Marketing Institute
Greater Philadelphia Business Coalition on Health
HealthCare 21 Business Coalition
Houston Business Coalition on Health
Louisiana Business Group on Health
Midwest Business Group on Health
National Alliance of Healthcare Purchaser Coalitions
National Association of Health Underwriters
National Association of Wholesaler-Distributors
National Business Group on Health
National Restaurant Association
National Retail Federation
Pacific Business Group on Health
Partnership for Employer-Sponsored Coverage
Retail Industry Leaders Association
Retailers Association of Massachusetts
Rhode Island Business Group on Health
Self-Insurance Institute of America, Inc.
Silicon Valley Employers Forum
Small Business & Entrepreneurship Council
Society of Professional Benefit Administrators
St. Louis Area Business Health Coalition
The Council of Insurance Agents & Brokers
The ERISA Industry Committee
Wyoming Business Coalition on Health


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