Tilt Toward Doctors
Before the private equity-fueled dark-money group Doctor Patient Unity started running ads warning of the dangers of government price controls as an argument against legislation, surprise billing legislation being drafted in one of Congress’ most powerful health care committees was already tilting to be more favorable to doctors.
“People on the Hill are very sympathetic to hospitals and physicians because they’re actually providing the care itself,” said one Democratic aide, speaking on the condition of anonymity to candidly describe sensitive political dynamics. “Nobody wants to defend the insurers.”
In May, a House Energy and Commerce Committee draft proposal included no mention of outside arbitration. The same was true for a bill the Senate Health, Education, Labor and Pensions Committee approved in June. Instead, under those proposals, surprise billing disputes would be resolved by insurance companies paying doctors based on similar rates in that area.
By mid-July, though — roughly a week before Doctor Patient Unity registered as a business in Virginia — the Energy and Commerce legislation was amended to allow doctors to appeal to an independent arbiter if their payments exceed $1,250. The revision was pushed by two physicians on the committee — Democrat Raul Ruiz of California and Republican Larry Bucshon of Indiana — and was a moment Sherif Zaafran, a Texas anesthesiologist, describes as a “turning point” in negotiations over the bill.
“It’s all about fairness,” said Zaafran, who works for private equity-backed U.S. Anesthesia Partners. He has been involved for a decade in surprise billing fights in Texas, which enacted a new law with an arbitration process last year. U.S. Anesthesia Partners gave $197,900 in campaign contributions to members of Congress last year.
Zaafran chaired another coalition of medical specialists, Physicians for Fair Coverage, in 2019, and pressured Congress to pursue a surprise billing approach modeled on a New York law under which insurers and providers rely on arbitration. Under that process, if there is a payment dispute between doctors and insurers, the two sides submit a proposed dollar amount to an independent mediator, who then selects one.
In New York, the mediators were told to base their decisions on the 80th percentile of the prices set by the hospital or physician. Research has suggested that the model is broadly making health care more expensive for state residents because of higher payments to doctors, according to findings from the USC-Brookings Schaeffer Initiative for Health Policy.
Still, on Capitol Hill, doctors complained that many procedures would fail to cost enough to qualify for arbitration as proposed in the Energy and Commerce bill, bolstered by data ER doctors presented to lawmakers showing that prices mainly fall below $1,250.
“It’s largely out of reach,” said Laura Wooster, a lobbyist with the American College of Emergency Physicians, whose political action committee contributed $708,000 to lawmakers in 2019. “The problem with a threshold is, you just have one threshold. It’s going to impact different specialties so differently.”
By December, House Energy and Commerce Committee leaders and Sen. Lamar Alexander, a Republican who chairs the Senate HELP Committee, agreed to lower the arbitration threshold to $750 as part of a bipartisan agreement on a bill. Notably, several hospital lobbying organizations, such as the American Hospital Association and the Greater New York Hospital Association — the latter a strong financial backer of Senate Minority Leader Chuck Schumer — refused to back the deal.
Pak-Teng and other physicians also say that arbitration threshold is still too high. The House Education and Labor Committee has unveiled surprise billing legislation with a similar framework.
“I’m open to listening to all sides on this,” Rep. Greg Walden of Oregon, the top Republican on the House Energy and Commerce Committee, said in an interview. “We want to make sure doctors are adequately compensated.”
Walden had harsh words for private equity firms that have attacked the Energy and Commerce legislation in a series of TV and internet ads, saying they were “misleading and scaring people” and just made lawmakers dig in deeper. The ads prompted a bipartisan probe from Walden and committee Chairman Frank Pallone (D-N.J.) into how the companies have influenced surprise billing practices.
“I’m not trying to hurtle a rock at them, but they’ve been throwing a few my way,” he said.
What’s Coming
Arvind Venkat, a Pittsburgh emergency physician employed by US Acute Care Solutions, traveled to Washington multiple times last year to meet with congressional offices representing Pennsylvania. But he also made sure to bring up surprise bills on his home turf, giving his congressman, freshman Democrat Conor Lamb, a tour of the emergency room at Allegheny General Hospital last summer.
“There are two issues here,” said Venkat, who leads the Pennsylvania chapter of the American College of Emergency Physicians and has practiced at Allegheny General for 12 years. “Patients need to be protected, [and] we need to avoid anything that disrupts in-network relationships between insurers and clinicians.”
The call seems to have been heard: Legislation is likely to change further this year as the House Ways and Means Committee pushes an approach that is friendlier to hospitals and doctors. It builds off a one-page document committee leaders issued Dec. 11 that blunted momentum for a bipartisan deal that was to be included in a December spending bill.
The latest proposal from the committee includes an arbitration process to resolve payment disputes, with no minimum dollar amount needed to trigger it, and doesn’t ban surprise billing from air ambulance companies — a win for yet another special-interest lobbying group. The patient protections would not take effect until 2022.
Richard Neal, a Massachusetts Democrat who chairs the committee, remains an ally of Massachusetts hospitals. He released the brief December surprise billing document two days after the Massachusetts Medical Society and Massachusetts Hospital Association wrote a joint op-ed in The Boston Globe arguing that benchmarking physician payments — as the Senate HELP and Energy and Commerce deal would do — would wreck the state’s health care system.
“The heavy hand of government would create an unfair imbalance in the health care marketplace and insurers would have no incentive to engage physicians in building robust health care networks. The connected system of care we have all been working toward in Massachusetts would immediately become fragmented and disjointed,” the two groups wrote in The Boston Globe.
“They weren’t asking for favorable treatment. They were asking for fair treatment, and there’s a big difference,” Neal said in an interview. “I don’t want to rule anything out, but I think that the momentum right now is arbitration.”
“We need to get a little bit more balance,” added Shalala, who endorsed the Ways and Means legislation unveiled earlier this month.
Shalala has at least two hospitals in her Miami-area district that rely on private equity-supported physician staffing companies.
“I’m worried about the hospitals,” she said. “And the providers obviously include the docs.”
Victoria Knight contributed to this story.
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