Hospitals, insurers battle over surprise medical bills

A battle is breaking out within the health care industry as Congress intensifies its efforts to address surprise medical bills, one that comes after urging from President Donald Trump and his top health lieutenants.

The feud is pitting insurance companies who want to see price caps for provider services against hospitals who argue such a move would be a severe government overreach.

At the heart of the dispute is so-called “balance billing,” or the difference between what a physician or hospital charges for a service and what an insurance company covers. The discrepancy can leave consumers unknowingly on the hook for tens of thousands of dollars if, for example, they visited an in-network facility but received care from out-of-network clinicians -- like an anesthesiologist.

The issue has risen in prominence after several stories drew congressional ire, including NPR’s recent report on a Texas man who was charged $109,000 after getting treatment for a heart attack at a facility not part of his insurer's network. Recent studies have shown that as many as 20 percent of emergency room visits result in a surprise billing.

Now, as Congress gears up for an expected debate on the issue, the insurance industry’s top lobbying group is urging lawmakers to include a cap reimbursement rates.

“A significant driver of high costs are exorbitant bills that millions of patients with comprehensive insurance coverage receive every year,” America’s Health Insurance Plans and other groups wrote in a letter on Monday to Republican and Democratic congressional leaders. “In many cases, the charges bear no relation to the actual cost of care or market rates.’

The proposal drew immediate backlash from the hospital sector’s top advocacy groups.

“Not only is it a dangerous precedent for the government to start setting rates in the private sector, but it could also create unintended consequences for patients by disrupting incentives for health plans to create comprehensive networks,” the American Hospital Association and the Federation of American Hospitals said in a statement.

States have already proposed or implemented a number of measures to address surprise medical billing. New York, for example, uses private arbitration to solve disputes.

Prior congressional proposals vary in strategy and it’s unclear which – if any – could move forward in a divided government. Still, it’s one that has galvanized politicians on both sides of the aisle, as well as the White House.

“The pricing is hurting patients, and we’ve stopped a lot of it, but we’re going to stop all of it,” Trump said in January.


Sens. Bill Cassidy, R-La., and Maggie Hassan, D-N.H., for example, are working together after introducing separate proposals last year that suggested different mechanisms to determine fees.

Cassidy’s prior draft would cap charges for out-of-network procedures at 125 percent of the average cost for the service in the specific geographic area, while Hassan’s would employ an independent arbitrator to resolve fights between insurers and providers.

Experts warn, however, that both proposals could set payments levels too high – increasing overall costs and forcing physicians out of insurance networks.