How far do the proposed legal protections from surprise medical bills reach?
One introduced House bill—Reauthorizing and Extending America’s Community Health Act—includes provisions to prevent surprise billing and was analyzed in-depth by the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT), as requested by Congress. The bill, H.R. 2328, also includes a number of extensions in public health and Medicare program funding, changes to parts of Medicare, a reduction in scheduled funding cuts to disproportionate share hospitals (DSH), and increased Medicaid funding in the U.S. territories, along with other changes (CBO Report, September 18, 2019).
Surprise medical billing. Surprise medical bills under H.R. 2328 are those that a patient receives unexpectedly from out-of-network providers either for emergency care or for out-of-network care from providers at an in-network facility. According to CBO, federal law provides those with private health insurance with some protections against surprise bills for emergency care. However, it does not prohibit providers from balance billing or prevent insurers from using separate out-of-network deductibles.
Patient protections. The bill would establish patient protections from surprise medical billing and reduce payments to some health care providers who work in facilities where surprise medical billing is likely, especially providers of emergency care and ancillary services such as anesthesia. Both CBO and JCT estimated that lower payments to some providers would reduce the cost of health insurance that is subsidized by the federal government through the health insurance marketplaces established under the Affordable Care Act (ACA) (P.L. 111-148) and employment-based plans.
Specific protections from surprise medical bills under the introduced bill would include:
- Prohibiting balance billing and requiring insurers to treat out-of-network care as in network care for the purpose of calculating copayments, coinsurance, deductibles, and spending toward out-of-pocket limits.
- Requiring insurers to reimburse out-of-network providers at the median in-network rate for a given provider type and geographic area.
- Requiring insurers to pay something for out-of-network care and also prohibiting providers from charging prices that are substantially higher than in-network rates.
- Beginning in 2021, an independent dispute resolution (IDR) process would be implemented by the Secretary of Health and Human Services in consultation with the Secretary of Labor for disputes over out-of-network bills above $1,250, and that threshold would increase annually.
Medicare and Medicaid changes. Among other changes, the bill would extend and increase funding for several programs that are financed through the Medicare trust funds and change military retirees’ health care options. Under Medicaid, states receive DSH allotments to cover payments to hospitals that treat a disproportionate share of uninsured and Medicaid patients. Currently, those allotments are set to be cut by $4 billion in 2020 and by $8 billion in each year over the 2021-2025 period. Under H.R. 2328, the reductions for 2020 and 2021 would be eliminated and the reduction in 2022 would decrease to $4 billion.
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