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Protesters hold signs denouncing the Republican Party's Tax Cuts and Jobs Act outside the New York Stock Exchange on December 19, 2017.

Protesters hold signs denouncing the Republican Party's Tax Cuts and Jobs Act outside the New York Stock Exchange on December 19, 2017. (Photo: Erik McGregor/LightRocket via Getty Images)

Lawmakers Seek to Weaken Ban on Surprise Medical Bills

According to new reporting, the effort to rein in price-gouging is facing pushback from Democratic and Republican members of Congress alike.

Kenny Stancil

It's been less than three weeks since a federal ban on most surprise medical bills went into effect, but Democratic and Republican members of Congress are already teaming up with the for-profit healthcare industry to weaken a key provision in the law, The Intercept reported Monday.

The No Surprises Act is expected to protect millions of people in the U.S. from costly bills that private equity-owned providers foist upon patients who inadvertently receive out-of-network care during medical emergencies.

Before the bipartisan legislation, which passed during the Trump administration, took effect on New Year's Day, the Biden administration "fine-tuned" it, crafting a rule that may enable the federal government to standardize rates for procedures covered by private insurers—a move the for-profit healthcare industry has opposed for decades.

Even though experts say the provision—which requires insurers and healthcare providers to rely on median in-network prices to settle billing disputes—is consistent with the text of the No Surprises Act, leading opponents have filed numerous lawsuits alleging that the Biden administration's move exceeded Congress' intentions.

"Despite plaintiffs' questionable legal reasoning," key lawmakers from both major parties have thrown their weight behind the lawsuits, The Intercept reported. "Their apparent aim is to bolster providers' legal arguments that the Biden administration went beyond Congress' intent in crafting the rule that governs the resolution of unpaid medical bills."

Sen. Bill Cassidy (R-La.), Sen. Maggie Hassan (D-N.H.), and Rep. Richard Neal (D-Mass.) are among the members of Congress who have supported the American Hospital Association, the American Medical Association, and other proponents of privatized healthcare in their mission to get the rule thrown out in federal court.

The American Hospital Association has previously referred to Neal as its "friend in Washington."

"Who says bipartisanship is dead?" tweeted reporter Austin Ahlman.

Experts told The Intercept that opponents of the new rule are motivated by the fact that the dispute resolution process favored by the Biden administration "has the potential to drive down the high prices U.S. providers charge compared to other countries, stoking fears in the healthcare industry that it would lead to standardized rates. The drop in prices would at least partially be returned to Americans in the form of lower health insurance premiums."

As the investigative outlet explained:

Prior to implementation of the No Surprises Act, providers regularly billed patients covered by out-of-network insurers directly for the difference between their rate for a treatment and the insurer's allowed amount. These bills were often substantially higher than the true cost of the procedure or the price a provider would charge an in-network patient. That practice, known as "balance billing," will remain banned regardless of the outcome of litigation.

Instead, providers and insurers will enter forced baseball-style arbitration if they cannot agree on the price for treatment. Each side will send the arbiter a payment offer, and the arbiter will pick the offer they think is most fair. At issue in the lawsuits is the administration's interpretation of this process. Under the Biden administration's proposed rules, arbiters must prioritize the median in-network rate when deciding disputes, forcing providers to justify any departure from their typical rates. The rule effectively stops them from price-gouging consumers who are out-of-network.

Although "price controls for medical treatments are common" in other nations and exist to a limited extent in the U.S. thanks to Medicaid and Medicare, "U.S. legislators have historically been averse to regulations aimed at standardizing the rates private insurers pay," The Intercept noted. "As a result, the majority of the excessive cost Americans pay for healthcare can be attributed to the steep, unregulated prices charged by providers."

"Any move toward standardizing these rates poses a threat to providers that rely on inflating patients' bills and forcing them to cover massive surcharges far above the actual cost of the procedure," the outlet added. "The providers' investors in particular stand to lose if the new rule is enacted."

Last May, Hassan and Cassidy—both instrumental to the development of the No Surprises Act—argued in a letter sent to Health and Human Services Secretary Xavier Becerra, Treasury Secretary Janet Yellen, and Labor Secretary Marty Walsh that when implementing the law, the Biden administration should not prioritize the median in-network rate but should instead follow providers' preferred interpretation.

As The Intercept reported, "providers claim the text of the No Surprises Act requires the administration to weigh a number of other potentially extenuating factors, such as the physician's level of experience, equally to the median in-network rate."

"Cassidy released a similar follow-up letter in late December, but Hassan, whose office did not respond to a request from The Intercept to clarify her position on the administration's interpretation of the rule, did not sign," the outlet noted.

Following the Biden administration's release of the arbitration rule last September, House Ways and Means Committee Chair Neal and ranking member Rep. Kevin Brady (R-Texas) sent Becerra, Yellen, and Walsh another letter that echoed the language used by Hassan and Cassidy.

And "in November 2021," The Intercept reported, "a large, bipartisan group of House members also sided with providers in the dispute. Reps. Tom Suozzi (D-N.Y.), Brad Wenstrup (R-Ohio), Raul Ruiz (D-Calif.), and Larry Bucshon (R-Ind.) led 150 of their colleagues in a letter that claimed to lay out, in starkly legalistic terms, the congressional intent behind the No Surprises Act."

Meanwhile, Rep. Frank Pallone (D-N.J.), lead author of the bill, and Senate Health Education, Labor, and Pensions Chair Patty Murray (D-Wash.) sent their own letter to Becerra, Yellen, and Walsh last year, arguing that the Biden administration's arbitration rule "is consistent with our intent."

Until recently, "courts have typically deferred to executive agencies when faced with ambiguous statutes," The Intercept reported, "but the Trump-stacked federal courts and the conservative Supreme Court are likely to be hostile to any regulation that appears to open the door for federal rate-setting."

As journalist James Conner, founder and editor of the Flathead Memo, said just before the No Surprises Act took effect, medical billing would be less complicated and predatory "if we ha[d] an everyone covered for everything, zero copay, federal single-payer healthcare system paid for by fair taxes."

Joe Sparks, host of "Medicare for All Explained," a podcast made in collaboration with Physicians for a National Health Program, made the same point last month, saying that "Medicare for All would eliminate the need for surprise medical bills and... other out-of-pocket medical expenses."


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