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Sen. Alexander details bipartisan plan to fix surprise medical bills

Rachel Bluth, Kaiser Health News on

Published in Health & Fitness

WASHINGTON -- Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., who are pushing a major legislative package to lower health costs, announced their favored solution to handle disputes about surprise medical bills.

Those unexpected and often high charges patients face when they get care from a doctor or hospital that isn't in their insurance network are a perpetual complaint from consumers.

Alexander and Murray formally introduced their wide-ranging bill Wednesday, but they had offered a broad outline before without taking a stand on how to mediate between healthcare providers and patients on the surprise bills.

When a patient is seen by a doctor who isn't in their network, the Alexander-Murray bill says insurance would pay them the "median in-network rate," meaning the rate would be similar to what the plan charges other doctors in the area for the same procedure. If there aren't enough other doctors covered by the plan to compute a median in-network, the plan would use a database of local charges that is "free of conflicts of interest."

Alexander said in a written statement that his decision was swayed by an assessment by the Congressional Budget Office, which "indicated that the benchmark solution is the most effective at lowering healthcare costs."

According to early numbers from a CBO report, benchmarking could save $25 billion over the next 10 years. Loren Adler, associate director of USC-Brookings Schaeffer Initiative for Health Policy, said that means commercial insurance premiums would be reduced by about a half-percent.

 

"That's pretty significant for federal policy," Adler said.

The formula is similar to what a different group of bipartisan senators, led by Sen. Bill Cassidy, R-La., proposed earlier this year. The critical difference is that in the Cassidy bill if the insurer and doctor can't agree on a median-in-network rate, they can take their case to an independent arbitrator.

The provider community has pushed back on any attempt to set a "benchmark" for physician pay, like the one in Alexander and Murray's bill.

At a hearing Tuesday before the Health, Education, Labor and Pensions Committee -- of which Alexander and Murray are the chairman and ranking member, respectively -- Tom Nickels, executive vice president of the American Hospital Association, said benchmarking would hurt efforts to set up broad insurance networks because providers and insurers would already know what they would be paid for surprise bills and it would be hard to recruit physicians to adequately staff hospitals.

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