Senate Panel Targets Rising Health Costs; “Surprise” Medical Bills

Editor’ Note: During the 2018 state legislative session in Georgia, two bills aimed at addressing the “surprise medical bills” issue were considered and debated. In the end, both failed as proponents of each bill could not agree on a mutually satisfactory solution.

CQ NEWS
June 27, 2018 – 3:18 p.m.

Senate Panel Targets Rising Health Costs; “Surprise” Medical Bills

By Mary Ellen McIntire, CQ

The leaders of the Health, Education, Labor and Pensions Committee voiced bipartisan concern about health care costs in a hearing Wednesday, with both Democrats and Republicans noting alarm particularly about surprise medical bills. 

“The hard truth is that we will never get the cost of health insurance down until we get the cost of health care down,” said Chairman Lamar Alexander, R-Tenn.

Alexander said the panel would hold three or four additional hearings on the topic, including one on administrative burdens that medical providers face. Rising health care spending is a complex issue that also could include the costs of insurance premiums and prescription drugs.

Alexander and top committee Democrat Patty Murray of Washington seemed to agree on at least one issue: Both discussed constituents who were surprised with medical bills because they were treated by an emergency room physician who was out of their insurance networks although the emergency room was in network, and an anesthesiologist who was out of network although the hospital and surgeon were both in network.

Witness Ashish Jha, the director of the Harvard Global Health Institute, testified that some hospitals use an outside company to staff an emergency department, and then those doctors are out of patients’ insurance networks.

“That’s how they make their money,” he said. “It’s unethical, if not illegal, and it obviously is not illegal, but it ought to be.”

A handful of states have taken meaningful steps to combat such actions, Jha said. Those include holding the patient harmless if a provider does out-of-network balanced billing, which is when a provider charges a patient for the difference between the provider's charge and the covered amount. 

Since so many people receive insurance from a self-insured employer, the federal government has a role to play under the Employee Retirement Income Security Act, which oversees employer-sponsored health insurance, he added.

He pointed to some steps that were successful in lowering Medicare spending growth somewhat. Those include accountable care organizations that were set up under the 2010 health law (PL 111-148, PL 111-152), which incentivize doctors and other providers to coordinate care and hold down costs. 

The hearing largely moved the committee away from partisan discussions on the 2010 health care law, which Alexander said had distracted the panel from broader health policy conversations for years.

One of the few moments when the health care law was discussed came when Murray said actions taken by the Trump administration and Republicans in Congress are driving up premium costs for marketplace plans. She also noted that the Centers for Medicare and Medicaid Services rolled back bundled payment programs that were designed to lower costs and that the Centers for Medicare and Medicaid Innovation, which is designed to oversee demonstrations on lowering costs and increasing quality, was without a leader for a year.

Price Transparency and Quality Measures

Improving price transparency is frequently noted as a way to lower health care costs, but Sens. Susan Collins, R-Maine, and Tina Smith, D-Minn., raised questions about how to match more pricing information with details on the quality of care a patient receives.

“Researchers have also found that patients equate high prices with high quality,” Collins said. “When we have price transparency, we need to have some way to also have an evaluation of quality.”

Smith referenced a Minnesota database that includes data on both cost and quality, which Melinda Buntin, a professor and chair of the Department of Health Policy and Vanderbilt University, testified was a step in the right direction.

Still, people need to be able to incorporate more details, such as their insurance plan coverage or how close they are to reaching their deductible, to take the greatest advantage of such a resource.

“Fundamentally, I think that research has shown it’s very difficult to get people at the point in time when they're ill and need a service to do a lot of comparison shopping,” she warned.

Administrative Burdens

Reducing the administrative burdens that health care providers face appears to be a priority for some members, and is likely to get more attention later this year.

Many administrative costs, such as quality reporting, fall to private insurance companies, Jha said. Additionally, the growth of electronic health records have added to the administrative tasks for physicians and nurses, said.

“It does show up in burnout rates. It does show up in other negative ways,” he said.

The growth of administrative burdens could also lead to more consolidation. For example, a large hospital system may tell a small practice it can focus on providing care rather than administrative tasks, if it is acquired, Sen. Lisa Murkowski, R-Alaska, said.

One way to address that may be to build electronic quality reporting systems, Jha said.

“These are not separate phenomena, and one that may actually be feeding into the other,” he said. “It does make them much more susceptible to just giving up that part of their practice, becoming an employee, and consumers are not necessarily helped by that.”

Dave Hyman, a professor at the Georgetown University Law Center, testified that without increasing competition to lower prices, simply decreasing the administrative burdens wouldn’t do enough to lower costs.

“Even if we cut administrative overhead in half, providers could pocket that unless they were competing with one and other,” he said.