Lobbying campaigns and legislative battles have been underway for months as Congress tries to solve the problem of surprise billing, when patients face often exorbitant costs after they unknowingly receive care from an out-of-network doctor or hospital.
As Congress considers various plans and negotiates behind the scenes, data is trickling in from states that have been test-driving proposed solutions.
New York was among the first to tackle the issue. In 2015, it passed a surprise billing law that uses "baseball-style" arbitration as a way to settle payment disputes between insurance companies and doctors. Under this approach, which is used in Major League Baseball to negotiate salaries (hence the name), each party submits a proposed dollar amount to the arbiter, who then chooses one as the final monetary award.
According to an analysis of newly released data from New York's Department of Financial Services, the New York model is making health care substantially more expensive in the state. In fact arbiters are typically deciding on dollar amounts above the 80th percentile of typical costs.
"This is an extremely high and extremely inflationary rule of thumb," said Loren Adler, author of the analysis and associate director of the USC-Brookings Schaeffer Initiative for Health Policy.
New York's financial agency reported that the law has saved consumers $400 million, but Adler challenged the claim, saying the state's experience has shown limited relief for patients.
Arbitration, or as New York calls it "independent dispute resolution," or IDR, works like this: A patient gets into an accident and goes to a hospital in her insurance network. While there, she sees a physician -- perhaps an emergency room doctor or anesthesiologist -- who isn't covered by her insurance company.
The insurance company pays a small part of the bill, and the doctor sends the patient a bill for the rest (often called a balance bill). Under New York's law, the patient is held harmless, meaning they only have to pay as much of their deductible, copay or coinsurance as they would if the doctor were in network. If the insurance company and the physician can't agree on how much of the bill to pay, they can take the issue to IDR.
They each bring their "fair-price," "final bid" to the arbiter, who then decides between the two.
The problem, according to Adler, comes in the guidance the New York law gives arbiters. It says they should consider the 80th percentile of "billed charges."