In December, several members of the House and Senate expanded a bipartisan investigation into what is commonly referred to as “surprise billing.” Their investigation focuses on the practice of billing patients for medical services when patients receive care by out-of-network physicians at an in-network facility. The legislators sent letters to several of the largest insurers and physician staffing companies in order to gather more information about this practice.
In these letters, legislators sought further information about the reasons for surprise bills as well as “the current incentives behind the negotiations between providers and insurers.” The letters focus particularly on those services that are “outsourced” by hospitals to physician staffing companies. Generally, these physician staffing companies and hospitals will have negotiated separately with insurers, resulting in a discrepancy between insurance coverage for the facility versus the provider.
These letters follow earlier efforts by legislators to investigate private equity firms with ownership interests in physician staffing and emergency transportation companies.
At the time of this investigation, several states have implemented laws to prohibit or regulate this practice, and congressional debate on the topic is ongoing. The bipartisan support for these investigations suggests that there is some momentum in Congress for passing federal legislation, but it is not yet clear what form that will take and where partisan lines may be drawn.
Federal legislation in this area may ultimately regulate ERISA plans. This is significant because state laws are generally preempted by ERISA with respect to surprise billing and only some states have allowed ERISA plans to “opt in” to their surprise billing schemes.
We will continue to closely follow these developments at the federal level along with our ongoing analysis of state-level efforts to regulate surprise billing practices.
