Rep. Katie Porter, D-Calif. stole the show with a personal account of the emergency appendectomy she had while she was campaigning. (Photo: House Ways and Means)

A House Ways and Means health subcommittee hearing held Tuesday highlighted a problem that could challenge any life, health or annuity groups trying to get legislation through Congress: Many House Democrats are hazy on how insurers see things.

The subcommittee organized the hearing to address the “balance billing,” or “surprise medical bill” issue: Cases of patients who end up with big medical bills because they used emergency care out of network, or who received ordinary care at in-patient hospitals and discovered later, to their horror, that some of the providers involved were out of network.

Related: Surprise billing: the U.S. needs better definitions

The House Ways and Means subcommittee chair, Rep. Lloyd Doggett, D-Texas, is trying to round up support for H.R. 861, a bill that would require any hospital seeking to participate in Medicare to provide any out-of-network insured patients, whether the patients were covered by Medicare or by other health insurance programs,  with detailed out-of-network cost notices.

The notices would have to warn the patients about the likelihood that they would be getting care out of network, and explaining what kinds of bills they might end up having to pay.

A hospital that wanted to be part of Medicare and failed to provide a balance billing warning notice could bill an insured patient only for the cost-sharing amount the patient would have owed if the care had been provided by an in-network provider.

If a hospital in the Medicare program provided emergency care to an insured patient outside of the patient's health plan network, the hospital could bill the patient only for the patient's usual in-network cost-sharing amounts.

“The sole focus of the bill is to protect insured patients from being trapped between an insurer and an out-of-network provider,” Doggett said at the hearing, which was streamed live on the web.

States are taking action, but federal action is also necessary, because about 40 percent of patients in Texas, for example, are in group health plans that fall under the Employee Retirement Security Act of 1974 (ERISA) state health benefits preemption rules, and state laws and regulations have no effect on ERISA plans' out-of-network coverage, Doggett said.

Here are three takeaways for agents and brokers from the hearing.

1. Lawmakers see control over health care providers' ability to participate Medicare as a great motivator.

Doggett is not trying to have the federal government impose balance billing restrictions or notice requirements directly, and it's possible that the federal government may have no authority under the U.S. Constitution to do so. But Congress does appear to have the ability to decide which organizations can participate in Medicare.

Providers' eagerness to participate in Medicare could have a bearing on how Medicare for All or other health finance system change proposals fare.

2. Many health care providers strongly object to specific proposals for setting standards for reasonable out-of-network reimbursement rates.

Dr. Bobby Mukkamala, a member of the American Medical Association, talked about ideas, which have been proposed by America's Health Insurance Plans (AHIP) and by other insurer, benefits and patient advocacy groups, of creating standard out-of-network care payment levels based on Medicare reimbursement rates, or on health insurers' views on what reasonable rates ought to be.

“Medicare physician payment has declined 19% over the past 17 years,” Mukkamala said.

Basing out-of-network care payment rates on Medicare rates “would eliminate any incentive for insurers to build adequate networks or offer physicians fair contracts,” Mukkamala said.

Any payment benchmark must “come from sources independent of interested party manipulation,” Mukkamala said.

3. Many lawmakers are a lot more familiar with doctors than they are with health insurers.

Jeanette Thornton, a senior vice president at AHIP, made that case that lawmakers and others should consider what reimbursement policy changes will due to health plan finances and health coverage costs, not just out-of-pocket costs for one particular visit, or what providers will earn for one particular patient.

For a hypothetical woman who needs hospital care, “it's really important that, when we're thinking about how to solve this issue, we're not doing it in a way that's going to raise her premiums going forward,” Thornton said.

James Patrick Gelfand, a senior vice president at the ERISA Industry Committee  — a group dominated by large employers and the administrators and consultants that serve them — testified that many hospitals are owned by big, investor-owned corporations, and that even nonprofit hospitals may have outsourced emergency rooms to investor-owned companies that are intentionally creating situations that lead to big, surprise bills.

But Rep. Katie Porter, D-Calif. — a new member of Congress and a member of the faculty of the University of California Irvine law school — stole the show with a personal account of the emergency appendectomy she had while she was campaigning. She went to an in-network hospital, but the surgeon turned out to be out of network. He billed her for $3,000.

Porter gave no indication at the hearing that she thought her health plan, Anthem Inc., might have had reasonable concerns about the surgeon's bill.

For Anthem's Anthem Blue Cross of California unit, “$3,000 was too high a price for saving my life,” Porter said at the hearing. “The tens of thousands in premiums I had paid to that company over the years were not enough to have them cover the cost of life-saving care.”

Resources

Links to balance billing resources, including a video recording of the hearing, are available here.

Read more: 

• Bipartisan draft legislation would end surprise medical bills
• Surprise bills hit 1 in 7 patients
• Out-of-network providers vex large employer plans