President Trump has rightly put a great deal of attention on the problem of surprise medical bills. Surprise medical billing can occur when patients receive emergency care or receive care from an out-of-network provider during treatment they believe is in-network, only to later receive a large medical bill. These bills can cause stress, anxiety, depression and financial ruin. Surprise billing is usually the result of a breakdown in negotiations between providers and insurers on how much to pay for these services. As a physician myself, I want patients and families to be protected when this occurs, which is why I am proud to introduce the Protecting Patients from Surprise Billing Act with Rep. Raul Ruiz M.D. (D-CA).

Our bipartisan legislation is modeled after New York state’s approach, which protects patients and requires providers and insurers to use arbitration when they can’t come to agreement on a fair rate. Our bill bans surprise billing and completely removes patients from negotiations, relying on the insurer and the provider to use baseball-style arbitration, called independent dispute resolution (IDR), to come to a reasonable payment rate. If the insurer and provider cannot agree, each side submits its proposed rate and a neutral arbiter will choose one. Additionally, our legislation improves transparency for patients to clearly identify in-network providers and deductibles. 

With almost five years of data from New York, it’s clear arbitration works for everyone – patients, providers, and insurers. According to a 2018 study, out-of-network bills declined by 34 percent in just three years. Despite concerns that arbitration would drive up insurance rates, there’s no evidence that has occurred. Premiums in New York have changed consistent with the rest of the country. Fewer than 1% of all out-of-network claims end up in the IDR process, which is designed to encourage parties to come to an agreement before arbitration. The IDR process is fair to both insurers and providers: as of October 2018, 618 decisions favored the insurer and 561 favored the provider. This solution doesn’t favor either side in billing disputes, which is how government solutions should be structured.

House Energy and Commerce Committee leaders recently introduced surprise billing legislation that sets payment benchmarks at the median in-network rates for health care plans to pay out-of-network providers. I’ve spent more than 30 years taking care of patients and negotiating with insurance companies, and because of that experience, I believe having a fixed price set by the government will jeopardize access to physician care. A fixed price will give an advantage to insurers, leaving physicians with reduced bargaining power for their services. This is on top of the fact that Medicare already cuts payments by nearly 30 percent to many of our rural hospitals because of the Medicare wage index, setting Tennessee hospitals at a clear disadvantage. Tying rates in any way to Medicare will put many of our rural hospitals out of business, and under a benchmark, the situation in Tennessee would only get worse.

We need a system that keeps patients out of the middle, but we don’t need to invent a new solution to surprise billing when our states have already established a great model. I will keep working with my House and Senate colleagues to find a solution for surprise billing that protects patients and allows for arbitration when necessary.