No Surprise: Payers, Providers Disagree About the Best Way to End Surprising Billing

Payers favor benchmaking, providers want arbitration

Legislation that would use benchmarking to end surprise billing has exposed a rift between providers and payers about how to end the loathed practice of billing patients who get services from out-of-network providrs through no fault of their own.

Today's Wall Street Journal  says the issue has stirred up a "furious lobbying campaign."

Sen. Lamar Alexander, the Tennessee Republican and chair of the Senate Health Committee, is advancing a plan that would use benchmarking to settle payment to out-of-network doctors and other providers. Benchmarking would mean that an out-of-network provider would be paid at the median in-network rate. Insurers and employers are in agreement with Alexander, according to the newspaper. News reports say the CBO has calcuated that the benchmarking will save the federal government more money than arbitration ($25 billion over 10 years vs. $20 billion).

But the American Hospital Association and some doctor groups are fighting benchmarking.  The Journal quotes from an AHA letter to Alexander and Sen. Patty Murray, ranking Democrat on the Health Committee: “We are concerned that the rate-setting provision of the legislation is a plan-determined, nontransparent process that will upend private payment negotiation."

Providers would prefer to have the bills paid at a rate set through arbitration. New York and several other states have passed laws that settle out-of-network bills through binding arbitration.