June 5, 2019
Chairman Lamar Alexander
Ranking Member Patty Murray
Senate Health, Education, Labor, and Pensions Committee
430 Dirksen Senate Office Building
Washington, DC
20510
VIA EMAIL: [email protected]
Re: Bipartisan
Discussion Draft Legislation to Reduce Health Care Costs
Dear Senators Alexander and Murray:
On behalf of the Minnesota Hospital Association (MHA) and
the 142 hospitals and health system members across our state, thank you for the
opportunity to comment on the bipartisan discussion draft to reduce health care
costs.
I write today to comment primarily on Title I of the
discussion draft and, in particular, the three proposed options related to surprise
bills. Other provider organizations, including our colleagues at the American
Hospital Association, will also submit comments that will cover other portions
of the discussion draft. MHA aligns itself with the views of AHA and encourages
your attention to their comments.
Minnesota’s health care providers, health plans, and the
state government have successfully partnered to reduce surprise bills for
Minnesota residents, and I write today to offer Minnesota’s perspective on this
very important question. Minnesota law provides protections for patients from
surprise bills. In 2017, MHA supported a new state law that:
- limited a patient’s financial responsibility to
the amount they would have paid if they had received in-network services,
- ensures patients have access to emergency care,
and
- requires a health plan and nonparticipating
provider to negotiate payment. If a payment agreement cannot be reached by the
health plan and the provider, either party may elect to refer the matter to
binding arbitration.
The new law has worked well in Minnesota and would be an excellent
model for federal legislation. Concerns about surprise bills have dropped
dramatically in Minnesota and those issues that do arise are often associated
with self-insured plans that are, pursuant to federal law, exempt from the
Minnesota requirement.
Based on Minnesota’s success at reducing surprise bills,
I provide the following observations related to the discussion draft’s proposal
to reduce surprise bills.
The Minnesota
Hospital Association Strongly Supports the Following Provisions
Based on Minnesota’s experience, the following proposals
from the discussion draft are likely to lead to a reduction in surprise bills
without significant disruption to the overall health care market:
- Independent
Dispute Resolution is, by far, the best proposed option for reducing surprise bills
without significant disruption to the overall health care market. The Committee should support the use
of independent dispute resolution (IDR) substantially similar to the proposal outlined
in Subtitle B-Option 2 of the discussion draft. Minnesota has adopted a similar
proposal and it has been quite successful. That said, as discussed more fully
below, the use of IDR should not be limited to only those bills that are more
than $750. Use of a default payment rate for any services will have a negative
impact on the health care market and will likely lead to market disruptions
affecting patient access to care.
- Including
language maintaining state-based surprise billing protections is critical. MHA
strongly supports the language included throughout the alternative proposals protecting
state-based methods of preventing surprise billing. Failure to include such
language in a final draft would undermine the success already achieved in many
states and would lead to substantial disruptions in markets, like Minnesota,
that have already reduced surprise bills.
The Minnesota
Hospital Association Has Concerns on the Following Provisions
- The
“In-Network Guarantee” language will reduce patient access to health care. It
is important to note that the issue of surprise bills arises almost exclusively
as a result of the narrow networks and restrictive payment policies implemented
by health plans. In Minnesota, as in most other states, a provider may not
participate in a health plan’s network without the health plan’s consent. Health
plans are free to include or exclude any providers they see fit and, in the
experience of Minnesota health care providers, do so without explanation and
without the opportunity for the provider to challenge the exclusion.
Furthermore, even if the health
plan is willing to add a provider to a network, not all providers are willing
or able to accept what the health plan defines as its in-network rates. It is
common for health plans in Minnesota to propose in-network reimbursement rates
that are well below the provider’s costs of providing services.
As a result, the proposed
“In-Network Guarantee” contained in Section 103 of the discussion draft will
have a negative impact on access to care. If a health plan and a provider are
unable to reach an agreement to add the provider to the health plan’s provider
network, the In-Network Guarantee will force a hospital to either:
- exclude from its medical staff any providers who
are not also part of the network of every
health plan that the hospital contracts with, or
- refuse to contract with any health plan that excludes
a hospital provider in its network.
Either method of compliance will
limit the hospital’s ability to provide access to care. The hospital will
either accept less forms of insurance, leading to increased out of pocket costs
for patients, or will have less providers on staff to provide care. Neither
option is good for patients.
Notably, the health plan
authority to exclude providers cannot be overcome by the discussion draft’s
proposed language purporting to establish a “Provider Choice.” As discussed
above, health plans retain the authority to define which providers are
in-network and an individual provider’s practice in a contracted hospital does
not modify that right.
Even more disturbing, the
“Failure to Comply” section of the discussion draft actually creates a
significant financial incentive for a health plan to exclude providers. This
provision affirmatively prohibits a health plan for paying hospitals and
providers for services that are actually
provided to a health plan participant when the provider is not a part of
the health plan’s network. As a result, the Failure to Comply provision will
allow health plans to reduce costs and still have services provided to its
health plan participants simply by refusing to contract with a provider.
- The
Federal Government’s establishment of a “Default Payment Rate” will disrupt market
negotiations between providers and health plans and will lead to reduced access
to care for patients. Provider rates in the commercial market are the
result of a variety of factors. The discussion draft’s proposals to establish a
default rate should be rejected by the Committee. Such a default rate is
unlikely to fully account for all market factors and will lead to market
disruptions, shortages, and misalignment of scarce health care resources.
In addition, a default rate is
likely to reduce the ability of providers and health plans to reach agreement
on alternative payment rate. One party or the other – depending on whether the
default rate is too high or too low for the specific market – is likely to
reject any attempt to modify the rate and will lead to refusals to negotiate. A
fixed payment rate also harms patient access to in-network providers because
health plans will have no incentive to provide incentives to providers to join
a network.
Thank you for the opportunity of offer these comments. If
you have questions, feel free to contact me.
Sincerely,
Ben Peltier
Vice President, Legal and Federal Affairs
c: Senator
Tina Smith
Senator Amy Klobuchar