American Society of Plastic Surgeons
For Consumers

Congress: Advance a Fair Out-of-Network Solution

ASPS Advocacy Summit attendees headed to the Hill in the midst of a heated congressional debate over how to address unanticipated medical expenses. Although all parties are committed to removing patients from billing disputes between providers and carriers, little consensus exists on how to execute that goal. Insurance companies, patient advocacy groups, the physician community, labor unions and others have all been lobbying for their own approaches.

As 78 ASPS members converged on Capitol Hill for the 2019 ASPS Advocacy Summit on June 19, pressure arrived from congressional committee chairs to advance legislation before members of Congress returned home for summer recess. ASPS members did not let their representatives leave the Capitol without having the voices of plastic surgery be heard.

Senate: Cassidy v. Alexander

The out-of-network debate has been a hot topic issue since last fall, when Sens. Bill Cassidy, MD (R-La.), and Maggie Hassan (D-N.H.) drafted legislation to stop unanticipated medical expenses. The bill would prohibit balance billing for emergency services and out-of-network care at an in-network facility, thereby requiring the patient to only pay their cost-sharing amount. The carrier would be required to reimburse the out-of-network provider the median in-network amount for services rendered, but the provider may challenge that initial reimbursement through a baseball-style arbitration system. The bill does not ban balance-billing for elective care, and instead the provider may balance-bill the patient as long as he or she receives signed consent 48 hours prior to care.

Most importantly, the bill covers privately funded health plans, which are not protected under any of the laws passed by state legislatures. These employer-funded plans make up 60 percent of the health-insurance market, which has compelled the federal government's involvement in an issue that has been long addressed by the states.

As a gastroenterologist, Dr. Cassidy earnestly tried to work with the physician community to draft a bill that protects patients and providers, while also introducing a proposal that could survive the legislative process. He spent considerable time listening to stakeholder concerns and met privately with ASPS representatives in November 2018 to discuss potential improvements to the draft. The dialogue between ASPS and Dr. Cassidy continued over the following months, as the Society worked to provide his team with supporting documentation, research and evidence to validate the need for amendments to the bill.

ASPS supports the ultimate goal of removing patients from payment disputes, but the Society believes significant amendments to Dr. Cassidy's bill are required in order to fairly address unanticipated medical expenses. In particular, ASPS is adamantly opposed to any legislation that requires the insurance carrier to reimburse the physician at less than the commercial market value, as it serves as a disincentive for fair reimbursement and negatively influences contract negotiations. ASPS is also against any provision that requires the physician to accept in-network reimbursement simply when surgery is performed at an in-network facility. That requirement could detrimentally influence contract negotiations between providers and hospitals.

Dr. Cassidy's team was receptive to the Society's concerns and conducted a provider stakeholder meeting in June 2019 to discuss the congressional restraints that dictated certain provisions in the bill and brainstorm opportunities to improve the bill and protect providers within those constraints. He agreed to consider amendments put forth by a collective of medical specialties – an effort lead by ASPS and supported by American College of Emergency Physicians; American College of Radiology; American College of Surgeons; American Society of Anesthesiologists; College of American Pathologists; and Congress of Neurological Surgeons. Dr. Cassidy's willingness to meet with providers, hear their concerns and voice those concerns among his colleagues has been instrumental in ensuring that the provider community is not pushed aside throughout this process.

Unfortunately, the efforts to incorporate the providers' concerns within an amended bill were thwarted, as pressure mounted from Sen. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), leaders of the pivotal Senate Health, Education Labor and Pensions (HELP) Committee. As the chair and ranking member of the committee with jurisdiction over healthcare issues, the senators were compelled to identify their own solution to the problem – a solution that unfortunately countered many of the physician protections sought by Dr. Cassidy. Although his legislation offered an avenue for a fair compromise between all parties, Alexander's bill was a blatant giveaway to the insurance carriers from the start.

In an effort to hold patients harmless for unanticipated out-of-network care, the Alexander-Murray legislation banned balance-billing for emergency services and ancillary care at an in-network facility. In these instances, the patient is only required to pay the cost-sharing amount and the carrier must reimburse the provider at the median in-network rate. Some providers would be permitted to balance-bill for elective care with patient consent, but facility-based providers are strictly prohibited from billing the patient for amounts not covered by their insurance plan.

The Alexander-Murray measure does not permit providers to challenge the initial payment made by the carriers through an independent dispute resolution system, leaving insurance companies completely in control of all reimbursement decisions and seriously altering the field for any future contract negotiations.

During the Advocacy Summit, ASPS members met with 48 Senate offices and relayed their concerns with the Alexander-Murray proposal. The Society pressed for key principles to be included within any legislation brought forward, including the need to retain patient choice by permitting patients to knowingly select non-urgent out-of-network care and the importance of establishing a minimum-benefits standard for out-of-network care that reflects the market value of services.

ASPS members talked about their personal experiences as patients receiving a balance bill and recognized the complexity of the system, which is not navigable for the average patient. Instead, the Society urged members of Congress to remove patients from billing disputes for out-of-network emergency care through an automatic assignment of benefits to the physician, allowing the physician and health plan to dispute appropriate payment.

With full control over the Senate's healthcare committee, Alexander advanced his legislation, leaving Dr. Cassidy's proposal – which is flawed, but offered potential for compromise – in the dust. The Alexander-Murray bill was brought forth before Senate HELP on June 26, just one week after ASPS members voiced their concerns. Unfortunately, Alexander was uninterested in compromising and did not work to include any of Dr. Cassidy's recommendations into the bill. Many Senators on the committee were simply concerned with finding a solution – any solution – and thus failed to truly understand the implications of the legislation before them. It was thus unsurprising, although very discouraging, when the committee reported the Alexander-Murray bill out by a vote of 20-3, with Sens. Paul (R-Ky.), Warren (D-Mass.) and Sanders (I-Vt.) also voting in opposition.

House: Pallone v. Ruiz

Meanwhile, in the House, the provider community was far more hopeful for a fair solution to surprise billing, with physician members Raul Ruiz, MD (D-Calif.), and Phil Roe, MD (R-Tenn.), advocating for legislation that models New York's successful balance-billing law. Although many states have passed bans on balance billing, the New York approach, first implemented in 2015, has a proven track record of results. Studies of the policy show that it has decreased the number of balance-bills received by patients; discouraged physician bills that far exceed market value; and settled reimbursement disputes almost evenly between health plans and providers.

Dr. Ruiz, an emergency physician, and Dr. Roe, an OB-GYN, recognized the success of the New York model and the need to implement policy that does not inhibit fair contract negotiations between providers and insurance carriers. The Ruiz-Roe bill bans balance-billing for emergency care and when a patient does not consent to out-of-network elective services. The patient is only responsible for the cost-sharing amount and automatically assigns their benefits to the provider. The health plan is required to reimburse the physician at the commercially reasonable rate, which is a vast improvement from the other proposals put forth. Both the physician and carrier can challenge the initial payment through an independent dispute-resolution process in which final payment is determined based on the best and final offers made by the parties.

Unfortunately, the bill strays from the New York model in that it bans balance-billing for out-of-network care provided at an in-network facility and does not expressly permit balance-billing when informed consent is signed by the patient in advance of surgery. It also fails to address self-funded employer plans under ERISA, which is the most compelling reason to address out-of-network at the federal level. ASPS has been assured that these were drafting errors and not representative of the sponsors' intended policy effect, but the Society has been unable to support the bill unless it is officially amended. Instead, Advocacy Summit attendees endorsed key provisions within Ruiz-Roe and the overall intention of the bill.

Other medical specialties share the Society's concerns and are working to garner new sponsors for Ruiz-Roe in an effort to demonstrate congressional commitment to a New York model. A robust number of cosponsors for the bill will help influence congressional leadership throughout the process and hopefully encourage components of the Ruiz-Roe bill to be incorporated into a final package.

A large list of cosponsors for Ruiz-Roe became even more important as House Energy & Commerce Committee Chair Frank Pallone (D-N.J.) and Ranking Member Greg Walden (R-Org.) introduced a measure in May. Much like the Senate dynamic, committee leadership's bill is overly biased to the insurance carriers, stripping the physician community of all leverage in contract negotiations.

The Pallone-Walden bill would ban balance-billing for emergency services and facility-based providers, and for elective out-of-network care in which the provider does not receive signed consent. Patients would be held harmless beyond their cost-sharing requirements and would automatically assign their benefits to the provider. The carrier would only be responsible for reimbursing the provider at the in-network rate for that specific health plan. The bill does not allow the provider to challenge the initial payment made by the carrier to receive appropriate, market-based reimbursement.

Four weeks after ASPS members conducted 57 meetings with members of the House of Representatives on surprise billing, Chairman Pallone brought his legislation forward for consideration in the House Energy & Commerce Committee, essentially stopping the Ruiz-Roe bill from advancing. Even with extensive discussions with ASPS and other medical specialty groups, many Energy & Commerce committee members still did not grasp the true implications of the Pallone-Walden bill due to the complicated nature of the issue.

During the July committee mark-up, Dr. Ruiz again fought for physicians alongside his physician counterpart Rep. Larry Bucshon, MD, a cardiac surgeon. The two spent a significant amount of political capital fighting for inclusion of an arbitration system within the bill. Chairman Pallone came to the table and agreed to a negotiated arbitration in which the physician is eligible to challenge the initial payment as long the disputed amount equals $1,250 or more. Unfortunately, the arbitrator cannot consider charge data during the deliberation process, and the system is only applicable in states that do not already have a dispute mechanism in place.

ASPS recognizes the small victory won in securing the inclusion of an independent dispute-resolution process into the bill. However, the Society remains concerned about the restrictive nature of the amendment and the limited eligibility of plastic surgery claims for minor emergency procedures. The express prohibition on the consideration of charge data is another handout to the carriers, who can present in-network and Medicare data to justify their payments. The amendment also fails to require the dispute-resolution process to utilize an unbiased reviewer or database, offering further opportunities for the plans to manipulate the system.

What's next?

Congress originally intended to bring a package to the President's desk before the summer recess, but the issue proved far more complex than leadership anticipated. In August, Congress officially recessed and legislators returned to their districts for the rest of the summer, therefore no official congressional activity will take place.

However, congressional staff will have no opportunity to rest, as the carriers, hospitals, providers, patient-advocacy groups and others continue their efforts on the Hill. ASPS is working hand-in-hand with the AMA, ACS and other medical specialty organizations to meet with congressional staff and educate key members about the necessity of improved legislation in both the House and the Senate.

Dr. Cassidy is also very busy during his recess, making a strong push to include an independent dispute-resolution process within Alexander's bill. For the first time, Alexander could be willing to compromise, as it's rumored that he does not have enough votes to pass the bill on the Senate floor.

Although all amendments will be an improvement to the current state, any changes secured are more likely to resemble the Ruiz-Bucshon amendment than a total revamp resembling the New York law.

To complicate matters further, the House Ways & Means Committee, which also has jurisdiction over this issue, is drafting its own bill, and it's unclear whether the House Education & Labor Committee, which has control over all ERISA policy, will draft a third proposal or take up a measure already introduced.

The road to a comprehensive and fair federal balance-billing solution is anything but clear. However, we can appreciate the short reprieve in what has been a 26.2-mile sprint and hope it provides time for more thoughtful deliberation and policymaking, however optimistic that may be.