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Physicians Advocacy Institute

PAI Advocacy on "Surprise Medical Bills"

PAI strongly supports Congressional efforts to address surprise medical bills, which are unanticipated charges for services that patients receive from out-of-network physicians or other health care providers in situations when the patient would expect the services to be covered as in-network services.  PAI recommends a comprehensive approach based on the following key principles: 

1. Patients shouldn’t be held responsible for surprise medical bills. 

A single, surprise medical bill can upend a working family’s finances, forcing decisions between necessary medical care and other essentials. To ensure patients aren’t penalized for insurance company practices beyond their control, policymakers need to remove patients from the dispute and develop a fair process to encourage resolution by insurers and providers. 

2. A comprehensive approach is needed to address the root causes of surprise billing.

Congress must address the insurance practices that leave patients without appropriate in-network care options and accurate information about their financial obligations. Policies to ensure more rigorous network adequacy oversight, transparent and accurate plan information, especially regarding in-network and out-of-network payment and cost-sharing policies, and accurate provider directories are critical to a long-term solution. 

3. Settlements between insurers and physicians should use independent data that reflects the true costs of delivering care.

Setting an arbitrary in-network rate will eviscerate the already limited ability by independent physicians to negotiate fair contract terms with insurers. This approach will drive even more provider consolidation, resulting in less choice in doctors and higher prices for patients and employers. This is exactly what surprise medical bill legislation is supposed to prevent. Congress must strike a balance that preserves access to important services by emergency physicians, on-call surgeons and other specialists.  Approaches that use insurers’ “in-network” agreements as a benchmark don’t cover physicians’ full treatment cost or take patients’ specific insurance coverage and circumstances into account. Instead of relying on the non-transparent rates insurers set, surprise medical bill settlements should use reimbursement data from independent organizations that encourage transparency and fairness by removing outlier fees and payments.  This approach takes into account physicians’ actual medical costs across local geographies and other factors, like the patient’s specific insurance product.  

4. New York’s time-tested surprise billing law has accomplished these goals and should be the template for Congressional action.

Five years ago, New York enacted a law that absolves patients of responsibility for surprise medical bills and uses transparent, independently-collected data to ensure arbitrated settlements are fair, which promotes access to needed doctors. The law is a proven arbitration deterrent, with more disputes being resolved before reaching that stage. When disputes are arbitrated, the loser pays. Decisions have been split evenly between providers and insurers, an indicator that the law is promoting fairness. This approach is working: since it went into effect, New York premiums have grown more slowly than the rest of the nation, and out-of-network charges are down 13 percent, according to a May 2019 Georgetown University Health Policy Institute case study. 

The principles embodied in the bipartisan proposal by U.S. Representatives Raul Ruiz (D-CA), Phil Roe (R-TN) and six colleagues reflect the best framework for legislation, because it’s grounded in New York’s successful approach.

PAI Advocacy Resources:
The Facts About Surprise Medical Bills (PDF)
"Questions & Answers About Surprise Medical Bills" (PDF)
New York vs. California Approach: Why New York is the Right Model (PDF)