AMAC recommends free-market principles to resolve the surprise medical billing issue.
March 9, 2020
The Honorable Kevin McCarthy
California 23rd Congressional District
H-204, The Capitol
Washington, DC 20515
Dear Representative McCarthy,
On behalf of the nearly 2.1 million members of AMAC – Association of Mature American Citizens – we want to thank Congress for working towards a solution to surprise medical billing. Surprise bills sent to patients while receiving care at an in-network facility by an out-of-network provider hurt patients across the country. Many of our members have related their experience with the financial burden this business practice imposes on their limited incomes and retirement resources.
We are pleased that the bills protect patients by not holding them responsible for surprise bills from out-of-network medical professionals who contributed to their care. The bills also intend for insurers and providers that operate out-of-network as part of their business model to negotiate payment in a fair and equitable forum.
However, we are concerned that the solutions currently being debated are either outright price fixing or an arbitration process with wording that will promote functional price fixing. We suggest that the current proposal in the House Ways and Means Committee be amended with the following to ensure all patients receive the best treatment one would expect from the American health care system:
• Remove the “usual and customary” verbiage from the Ways and Means Committee bill because it will prevent the arbiter from starting with a reasonable provider charge and thus empower insurance companies to set a rate of their choosing.
• Remove the incentive for insurance companies to use repricing companies in order to negotiate a reduction after they have accepted an out-of-network provider’s claim by ensuring that payment for care is made directly to the provider. In the case of some self-insured organizations, when a provider refuses to negotiate, the insurance company pays them a lower rate while the insurer keeps the difference between what was removed from the self-insured health plan and what was paid to the providers.
As AMAC supports applying free-market principles to health care, we believe the following suggestions would inject self-regulation into this enterprise and recommend their consideration for any bill:
• The bills currently define non-participating as being out-of-network only. Not all providers who are out-of-network submit claims to an insurer and those that operate outside of insurance, such as direct primary care physicians, should be excluded from these proposals.
• Surprise billing is a surprise because of the lack of transparent pricing. The provider should provide a good faith estimate at least 48 hours prior to a scheduled procedure and an itemized list of charges within 15 business days after discharge. Failure to do so would result in forfeiture of payment.
• In the event of a dispute, arbitration should be voluntary and triggered by the provider if their submitted charges are greater than 3 times of the prevailing Medicare rates. Provider charges are not capped, nor are they tied to Medicare reimbursement, but the 3x factor Medicare serves as a threshold for the purposes of arbitration.
• In the event of a dispute, submitted charges below 3 times prevailing Medicare rates may trigger arbitration by the insurer. If arbitration is not triggered within 15 business days, the insurer shall pay the provider according to the submitted claim within 30 business days.
• The party that triggers arbitration shall be responsible for the cost of said arbitration.
• Consideration for the arbiters shall include historical voluntary payments made by the insurer 3 years prior to the law being enacted and/or use of independent databases such as Fair Health, whichever is greater.
• Upon decision from arbiter, payment must be made within 30 business days.
AMAC’s members feel strongly that insurance companies should not dictate the doctor-patient relationship. While insurance companies play an important and necessary role in the delivery of affordable health care, Americans deserve to make their own decisions regarding their care and receive the treatment they choose. When doctors are prescribed by the insurers, American’s health care suffers.
We appreciate your attention to this important issue and stand ready to assist Congress in this debate.