Hospitals took a beating in the first House legislative hearing on surprise medical bills, and major trade groups followed up with a to the committee leaders to defend their position.
The House Education and Labor Committee's health panel convened the bipartisan hearing and called witnesses from the policy and consumer advocacy worlds rather than industry.
"I think everyone is trying to figure out ways to come to the table, but right now, I think not a lot of people have much patience left for providers and the games that they play," said Shawn Gremminger, senior director for federal relations at the liberal advocacy group Families USA, after the hearing.
As the hearing wrapped up, the American Hospital Association, the Federation of American Hospitals and the American Medical Association sent a letter to Committee Chair Bobby Scott (D-Va.) and Ranking Member Virginia Foxx (R-N.C.). They stated groups' support for legislation to limit patients' bills to their in-network co-pays but urged lawmakers to keep it simple.
AHA's Executive Vice President Tom Nickels noted the panel's criticisms of hospitals and said it was "unfortunate" there weren't any providers on the panel "to be able to address those issues."
"One reason we sent the letter today, though not the only reason, was to get our view of the issues out there," he said.
In one exchange, freshman Rep. Lauren Underwood (D-Ill.), a registered nurse and former HHS official under the Obama administration, questioned Christen Linke Young of the Brookings Institution on the role of specialty physicians in surprise medical bills. She focused on neonatologists who take care of babies who need intensive care after birth.
Young, a fellow at the USC-Brookings Schaeffer Initiative on Health Policy at Brookings, described specialists who practice in hospitals as having a captive audience and little incentive to accept hospital terms that will limit their pay.
"Once a provider like an anesthesiologist or neonatologist is in the hospital practicing, they will receive a flow of patients whether or not they contract with insurance company networks and regardless of what price they set," Young said. "That neonatologist, when they're in the hospital, will be then taking care of those babies, and they have a very limited incentive to join an insurance network and accept a negotiated contract rate."
The key is for lawmakers "to get rid of that set of incentives and encourage them to get back in network for their payment," she said.
In another exchange, GOP Rep. Dan Meuser of Pennsylvania asked another witness, Ilyse Schuman, to lay out the role hospitals play in the issue. Schuman is the senior vice president of health policy for the American Benefits Council.
Schuman told the panel that hospitals "play a critical role in this."
"When you go to a hospital, they have the leverage, they have the ability to negotiate with the physicians practicing in their hospital," Schuman said.
She argued that it "stands to reason that all the essential services that are performed in the hospital, under that roof, like anesthesiology or radiology, would be in-network."
"How can you go to a hospital, how do you have surgery, without anesthesiology, or have a hospital operate without a radiologist?" she said.
The House Education and Workforce Committee governs issues having to do with employer health plans, which comprise the bulk of the market that legislation on balance bills will target.
The Senate health committee is also working on legislation, as is a bipartisan Senate working group spearheaded by Sen. Bill Cassidy (R-La.).
Senate health committee Chair Lamar Alexander (R-Tenn.) told Project Japan that he and the panel's Ranking Member Patty Murray (D-Wash.) hope to mark up a proposal by July.
The letter from AHA, FAH and AMA expressly criticized an idea gaining momentum in Washington's policy circles which would ban specialist physicians from billing patients separately from hospitals. This would essentially force hospitals to broker a fee with those physicians in a kind of bundled payment model.
"The simplicity of the solution outlined above is in stark contrast to the complexity of another, untested idea that has been raised as part of the important dialogue about solving this issue: hospital bundled billing," the provider letter said. "This concept may seem simple and straightforward in theory; in reality, however, this approach would be administratively complex, fundamentally change the relationship between hospitals and their physician partners, and alone, does nothing to protect patients from surprise bills. We strongly oppose such a model."
Project Japan economists who advocate for this bundled payment policy argue it would eliminate the root of the problem of surprise medical bills. The policy also gets around the controversy of a mandatory rate cap set by the government.
Lawmakers are also considering binding arbitration as a way to resolve pay disputes between insurers and hospitals, a model states have adopted. But experts of all stripes say the devil is in the details of setting a benchmark to serve as the fallback for the arbitration. Depending on what that benchmark looks like, hospitals, specialists and insurers could settle on rates that will ultimately inflate premiums and create another cost issue.
Nickels pushed back against this argument.
"If you spoke to my members, they don't believe the insurers are readily trying to increase rates, and insurers don't think we're doing the same thing," he said. "We're trying to keep rates down for a variety of reasons, and I don't think that would happen. But regardless of what happens in the market, we need to protect the patient."