When Your Doctor Is Also A Lobbyist: Inside The War Over Surprise Medical Bills

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By Rachana Pradhan February 12, 2020/Kaiser Health News*

When Carol Pak-Teng, an emergency room doctor in New Jersey, hosted a fundraiser in December for Democratic freshman Rep. Tom Malinowski, her guests, mostly doctors, were pleased when she steered the conversation to surprise medical bills.

This was a chance to send a message to Washington that any surprise billing legislation should protect doctors’ incomes in their battle over payments with insurers. Lawmakers are grappling over several approaches to curtail the practice, which can leave patients on the hook for huge medical bills, even if they have insurance.

As Congress begins its 2020 legislative session, there is evidence the doctors’ message has been received: The bills with the most momentum are making more and more concessions to physicians.

As surprise medical billing has emerged as a hot-button issue for voters, doctors, hospitals and insurers have been lobbying to protect their own money flows. All that lobbying meant nothing got passed last year.

Television and internet ads are the most visible manifestation of the battle. But in taking their cause to politicians, doctors like Pak-Teng have waged an extraordinary on-the-ground stealth campaign to win over members of Congress. Their professional credentials give them a kind of gravitas compared with other lobbyists, who are merely hired guns.

Ending the practice of billing patients for the amount of their treatment not covered by insurance — sometimes triggered by unwittingly seeing a doctor out of network — is ultimately a fight between doctors and insurers over rate-setting and reimbursement. But as more patients balk at surprise bills — or suffer the enormous financial strain — lawmakers are under pressure to protect patients. In turn, powerful lobbying forces have activated to protect doctors and insurers who don’t want to pay the price for a fix.

The main message physicians are using to bring lawmakers into their corner? “We just want to be paid a fair amount for the services rendered,” Pak-Teng said.

Her congressman, Malinowski, has not endorsed any surprise billing legislation. In congressional testimony in July, he cited the “extra $420 million” in medical debt patients in New Jersey reckon with each year.

“There are many things that Republicans and Democrats sincerely disagree about in this body,” he said. “I don’t think that this is one of them. I don’t see any philosophical difference amongst us about whether people should be stuck with massive surprise medical bills.”

Doctors say they are taking the brunt of the criticism.

But little has been as powerful in shaping surprise billing legislation as the clout of hospitals and their doctors, many of whom are, in fact, employed by private equity-backed companies and armed with years of experience shaping surprise billing legislation at the state level.

They are throwing in a lot of money, too, funneling millions to lawmakers ahead of the 2020 elections. Four physician organizations that have heavily lobbied on surprise medical bills and have private equity ties — the American College of Emergency Physicians, Envision Healthcare, US Acute Care Solutions and U.S. Anesthesia Partners — gave roughly $1.1 million in 2019 to members of Congress, according to a Kaiser Health News analysis of Federal Election Commission records.

The biggest recipients, from all four PACs combined, were Reps. Donna Shalala and Stephanie Murphy, Florida Democrats who got $26,000 each. Sen. Thom Tillis (R-N.C.) took in $25,500, Senate Majority Leader Mitch McConnell got $25,000, and Rep. Brett Guthrie (R-Ky.) received $22,500.

That was in tandem with a ground game led by local doctors. ER doctors, anesthesiologists, radiologists and other specialists who most often charge out-of-network prices — and also are among the highest-compensated practitioners — fanned out to shape legislation in a way that maintains their pay, and to voice their concern to lawmakers that insurance companies would have too much leverage to control their compensation.

“We by necessity place a tremendous amount of trust in our physicians,” said Zack Cooper, an assistant professor at Yale University who has extensively researched surprise medical bills. “Frankly, they have an easier time lobbying members [of Congress] than the folks who are affected by surprise billing.”

Arguing Over The Fix

Lawmakers in both parties appear unified on the need to resolve the problem of surprise billing. But as was clear when all the air blew out of legislative proposals on the table at year’s end, that is largely where the agreement ends.

Fixing the problem comes down to settling on a system for deciding how much to pay for a disputed bill. One approach is to set up an outside arbitration process, in which doctors and insurance companies would negotiate payment — this is the model preferred by doctors, who contend it puts them on better footing against insurance companies. Another option would be to resolve surprise billing disputes by having insurance companies pay doctors based on the median in-network rate for the service, an approach known as benchmarking. Large employers, labor unions and insurance companies prefer this.

The failure to get legislation through Congress set up a potentially explosive battle in an election year. Republicans and Democrats who have vowed to do something about health care costs must reckon with powerful industry groups whose influence transcends party lines.

Meanwhile, physicians and hospitals have made their case in Washington and back home through in-person meetings and phone calls with lawmakers and congressional staff. They’ve hosted dinners and fundraisers and organized fly-ins to swarm Capitol Hill with in-person meetings. They’ve even led tours of their emergency rooms.

Pak-Teng is among them, coming to Washington this month with other physicians to petition lawmakers. She is employed by Envision, a physician staffing company backed by private equity firm KKR. She’s also on the board of the American Academy of Emergency Medicine, a trade organization representing ER doctors.

“There is a lot of anti-physician rhetoric out there,” said Pak-Teng, who is pushing her physician colleagues to be more active in shaping public policy by sharing stories about the reality of caring for patients.

The lobbying by hospitals and physicians trying to protect their reimbursements has divided key lawmakers, compounding disagreements among senior House Democrats over the policy details of a bill and turf wars in Congress. Three House committees have now unveiled legislation to ban surprise medical bills, each with different details.

“We are not trying to stop legislation. We are trying to stop bad legislation,” said Anthony Cirillo, an emergency medicine physician who describes a “bad” bill as one that favors insurance companies over doctors.

Cirillo is also a lobbyist for US Acute Care Solutions, a physician staffing company backed by private equity firm Welsh, Carson, Anderson & Stowe. WCAS, which manages $27 billion in assets and is focused on health care and technology investments, is based in New York City and co-founded US Acute Care Solutions in 2015.

In an interview, Cirillo said he met with lawmakers and their aides about “10 to 12 times” in Washington last year. Financial disclosures show he spent $340,000 between July and September lobbying on surprise billing on behalf of US Acute Care Solutions. USACS’ political committee also contributed $134,500 to lawmakers in 2019, according to FEC records.

*Kaiser Health News (KHN) is a nonprofit news service committed to in-depth coverage of health care policy and politics. And we report on how the health care system — hospitals, doctors, nurses, insurers, governments, consumers — works. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.

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When Your Doctor Is Also A Lobbyist: Inside The War Over Surprise Medical Bills

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