No Clear Path Forward Yet on Surprise Medical Bills

This week, both the Senate and the House held more committee hearings on their respective bills to protect patients from the burden of costly, surprise medical bills. However, both bills have been met with significant opposition.

On Wednesday in the Senate, the Ohio Chamber voiced our concerns about how the approaches utilized by Senate Bill 198 to determine how much providers should be paid by insurers in instances that generate surprise bills would likely lead to increased health insurance premiums. Members of the Senate Insurance & Financial Institutions Committee also heard similar concerns from groups representing health insurers and from health underwriters, who are the agents, brokers and consultants who service the health insurance needs of employers.

Under SB 198, for individual claims of $700 or less, insurers are required to pay the lesser of the provider’s billed charge or an amount equal to the 80th percentile of all provider charges in the same or similar specialty in the same geographical area. Either amount is certain to lead to higher costs to insurers.

For claims exceeding $700, the bill relies on binding arbitration to determine how much providers should be paid. Arbitration creates a new layer of bureaucracy and administrative waste, leading to extra costs sure to get passed on by insurers to health insurance purchasers in the form of higher premiums.

House Bill 388, currently pending in the House Finance Committee, is supported by the Ohio Chamber because it avoids the use of arbitration and instead specifies a benchmark payment rate, based on the private market’s established rate, that the insurer must pay if no agreement is reached. A benchmark payment rate would provide certainty and ensure swift resolution, without creating a process that would lead to increased health insurance premiums for employers. HB 388 is being attacked by physicians and other provider groups, who prefer arbitration and want somebody else to foot the bill when a patient inadvertently sees an out-of-network provider.

It is unclear what the next steps for these bills may be, though no further official action is expected until after the holidays. Three hearings on SB 198 have been held in the Senate so far, and five hearings on HB 388 have been held in the House. Between now and mid-January, when lawmakers return to Columbus, both chambers will undoubtedly be reviewing proposed amendments and continuing to engage in conversations with the Ohio Chamber, insurers, providers and others in an effort to find a compromise approach that could break the gridlock on surprise medical bills.