Unbalanced: Differences between the House and Senate Surprise Billing Bills

By: Matthew Albright, Chief Legislative Affairs Officer, Zelis Healthcare

By the time Congress went home for August, two bills – one from each chamber – emerged as the frontrunners for what many predict will be a federal law prohibiting surprise balance billing. The House Energy and Commerce Committee (E&C) passed the No Surprises Act out of committee, now incorporated into the Reauthorizing and Extending America’s Community Health Act (REACH). The Senate similarly passed their Lower Health Care Costs Act (LHCC) out of the HELP committee.

The two bills have many similarities with regard to surprise balance billing, but there are also differences that may significantly impact the industry. Notably, LHCC applies to many more situations, while REACH includes a substantially more complex reimbursement calculation.

REACH v LHCC – Similarities: Both bills protect patients from surprise balance bills from out-of-network providers in emergency situations and in specific non-emergency situations.

  • Both bills give consideration to any state bills that prohibit surprise balance billing.
  • Though they use different terminology – “median contracted rate” in REACH and “median in-network rate” in LHCC – both bills set the benchmark for provider reimbursement at what is defined as a plan’s annual, median negotiated rate. However, as we shall see, the benchmark is triggered at very different times in REACH.

Although these bills establish a benchmark, neither sets a specific national standard such that all payers will pay specific providers in the same geographic area the same amount. Instead, an out-of-network provider for which these bills apply will still be paid different amounts from different plans for different areas and maybe different amounts based on different products of the same plan. And each reimbursement amount from each plan will change yearly.

REACH v LHCC – Differences:

  • Applicable Situations: LHCC is significantly broader about situations in which the balance billing prohibition would apply, the impact of which has received little consideration: The bill prohibits all out-of-network providers working in an in-network facility from balance billing a patient, even if the patient voluntarily chooses a provider knowing the provider is out of network. REACH narrows the applicability to true surprises – when out-of-network services are provided in an in-network facility without the patient’s knowledge and consent.
  • Air Ambulances: LHCC is also significantly stronger with its requirements for air ambulances. LHCC prohibits air ambulances from balance billing a patient and sets the reimbursement rate at the plan’s median in-network rate. REACH simply requires air ambulances to separate health services costs from transportation costs in their charge descriptions.
  • Reimbursement: Although both bills set provider reimbursement benchmarks at a plan’s median negotiated rate, the bills differ significantly on how benchmarks are applied and how the federal law coordinates with state laws. The complexity and differences in reimbursement for both bills are illustrated in Table A. Note that REACH has five different reimbursement requirements, depending on whether the context is fully or self-insured, in an emergency or in an in-network facility, and whether the state has surprise balance billing laws.
  • Arbitration: REACH was amended to include provisions for arbitration, should the provider or plan be dissatisfied with a health plan’s calculation of the annual, median negotiated rate of a given geographic area. LHCC currently does not include arbitration, but many expect that it will before it gets much further.

Complexity and Confusion

Applying Table A, imagine a claim generated in an in-network hospital where an out-of-network physician treated a patient. Under REACH, the following questions would have to be answered before the level of reimbursement could be ascertained:

  • Is the situation an emergency or a non-emergency?
  • If non-emergency, does the healthcare meet the federal definition of a surprise bill?
  • Are there applicable state surprise balance billing laws? (There is a wide range of applicability provisions with the states; for instance, some states only have balance billing prohibitions in the case of emergencies.)
  • Is the patient covered by a fully-funded or self-funded plan?
  • If there are applicable state laws and it’s an emergency and the patient is a member of a fully-funded plan, which provides less reimbursement to the provider – the state law or the particular plan’s median contracted rate?

In order to figure out the reimbursement amount under a state’s law, further analysis must be done on the state’s applicability, benchmarks and other provisions.

Strikingly, both bills implicitly assume that health plans and providers have all the information they need to calculate the reimbursement amount in any instance. Given the complexity of these calculations, described above, there is potential for error and confusion.

It is still unclear whether Congress and the president will be able to pass balance billing law. States aren’t waiting and are passing their own laws apace, each with their own intricacies and distinct requirements.

Whatever the future holds, Zelis Surprise Balance Billing Solution is an excellent option for plans seeking to address this complexity. We leverage our in-house legislative expertise and our proprietary fee schedule to yield plan savings while reducing the risk of surprise balance billing.