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More regulation required to end surprise medical billing, experts tell Congress

Negotiating costly surprise medical bills should be the responsibility of healthcare providers and insurance companies, and patients should be protected from the process, according to healthcare experts testifying before Congress.

On May 21, multiple witnesses told a U.S. House of Representatives Ways and Means subcommittee that more regulation is needed to rein in surprise billing. While some federal regulation is needed, multiple witnesses said state governments should lead the way.

Surprise billing refers to patients being left with large medical bills after insurance providers do not cover the full amount, a practice called balance billing. This practice typically occurs when patients receive out-of-network and emergency care.

Tom Nickels, executive vice president for the American Hospital Association, a national hospital representative, said balance billing should end. Nickels proposed that patients should pay an in-network price for the majority of treatment scenarios, and physicians and insurance providers would negotiate the difference.

Jeanette Thornton, senior vice president of product, employer and commercial policy for the Association of Health Insurance Plans, a national representative of insurance providers, agreed with Nickels and said patients should not be part of the negotiation process.

In addition, Thornton stated that out-of-network billing should not occur for patients who receive out-of-network treatment involuntarily, and hospitals and healthcare providers should provide advanced notice of possible out-of-network care for nonemergency treatment.

Bobby Mukkamala, a board of trustees member for the American Medical Association, noted that insurance networks should be protected. He told committee members that physicians should have a right to negotiate prices with insurers.

Mukkamala explained that a single physician or a small number of physicians in a certain geographic area should be able to negotiate a higher price for the services, but a standard in-network rate would limit this option. He added that a fixed rate would reward insurance providers for not negotiating with physicians.

Setting all prices at an in-network price is "an easy way out, but it's not a fair solution," Mukkamala said.

When questioned about fixed payment rates for out-of-network care, Nickels stressed that fixed rates should be avoided because insurance providers could default to the standard price, causing networks to shrink.

States leading the way

Thornton and Nickels both said solutions to surprise billing should happen at the state level, and the federal government should be used sparingly.

Some states have already taken action on surprise billing. The Texas legislature passed surprise billing legislation establishing an arbitration system that removes the patient and requires physicians and providers to negotiate surprise medical bills.

State regulations can only go so far, however. Nickels explained that about 60 million people are covered by plans under the Employee Retirement Income Security Act of 1974, and these plans are overseen by the federal government.

However, Nickels noted that some state plans "could be successfully deployed at the federal level with some modification."

Congress and the White House have recently turned their focus to finding a solution to surprise billing. The Trump administration recently announced a plan to take on surprise billing. Sen. Lamar Alexander, R-Tenn., said during President Donald Trump's May 9 press conference that he hopes surprise billing legislation would be delivered to the White House by July.