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A Deal To End Surprise Medical Billing Was Tanked At The Last Minute

Many people on Capitol Hill are blaming one person: Rep. Richard Neal. “There is extreme frustration. This was the deal.”

Posted on December 19, 2019, at 6:29 p.m. ET

Zach Gibson / Getty Images

Rep. Richard Neal speaks during a news conference about the Lower Drug Costs Now Act on Capitol Hill, Oct. 16.

WASHINGTON — Emergency room patients will continue to be hit with surprise medical bills, despite having health insurance, after Congress left for the year without passing a deal to end the exploitative practice.

President Donald Trump and leaders in both parties have spoken for months about the urgency of ending one of the most glaring loopholes of the US health care system. But Congress did not include any legislation to end surprise medical billing in its end-of-year budget bill, which passed the Senate 71–23.

Democrats and Republicans in the House and Senate had reached a deal to end surprise billing in recent weeks, despite a multimillion-dollar dark money campaign to kill reforms funded by private equity firms that profit from sending surprise bills to hospital patients. It appeared set to be included in the must-pass spending bill.

Then everything fell apart. And people on both sides of the aisle are pointing their finger at one member for tanking the momentum: Rep. Richard Neal, the powerful chair of the House Ways and Means Committee.

“There is extreme frustration. This was the deal. It was vetted. It was signed off on. It was approved. The White House endorsed it,” said one House Republican aide. “That’s when you need to set aside egos and get on board. This was going to be a win for the American people.”

Surprise billing happens when someone goes to a hospital covered by their insurance network only to be hit by often exorbitant bills because a doctor or specialist who works at the hospital is out of network. It’s not an accident. Private equity firms have bought up physician-staffing firms, which has led to an increase in out-of-network billing.

Doctors and the private equity firms behind them can reap huge extra profits by charging patients essentially whatever they decide the price should be. The practice raises insurance costs for everyone. Patients have little recourse other than begging for relief or threatening to call Sarah Kliff, a reporter at the New York Times.

Diagnosing the problem is easy — but solving it proved to be politically hard because health industry groups fought over who should foot the bill. Private equity–backed groups of doctors spent $30 million on a dark money ad campaign to fight for their right to continue charging high prices to ER patients.

Ultimately, the Senate Health Committee and the House Energy and Commerce Committee came to a compromise: Doctors cannot send surprise bills to patients, and insurance companies will pay out doctors at the average in-network rate for all bills up to $750. Above $750, the price goes to arbitration.

The deal was endorsed by President Trump and seemed set to pass, but it was always on shaky ground. Senate Minority Leader Chuck Schumer, receiving pressure from the Greater New York Hospital Association, did not endorse the bill but did not try to block it. Politicians in both parties had problems with the bill, but it seemed to have enough support.

Then, last week, Neal surprised everyone by releasing a counterproposal. Conversations with half a dozen politicians and aides across both parties and chambers with knowledge of the process concluded that the proposal from the Ways and Means Committee fractured the unsteady coalition and killed chances for surprise billing to be solved in 2019.

“That came out of the blue at the end,” said Rep. Greg Walden, ranking member of the House Energy and Commerce Committee. “When something like that happens, it gives others the excuse to go, ‘Oh look, they’re not ready.’”

Opinions vary on what happened. Some think it may have just been jurisdictional jostling, whereas Republicans suspect Neal was working with Democratic leadership to deliberately tank a solution. Of particular frustration is that Neal’s counterproposal wasn’t even a piece of legislation but only a vague one-page outline.

When asked by BuzzFeed News, Neal conceded his proposal does not answer the key question of how much to pay for out-of-network emergency room procedures after surprise billing is banned. “We have not fleshed that out, no,” he said. Neal previously proposed a bill that did not contain a solution at all. Instead, it would have kicked the matter to the Trump White House to solve.

But Neal insists he is committed to ending surprise medical billing. He said the House–Senate compromise was rushed and there was not enough time to scrutinize it between impeachment, the USMCA trade deal, and other pressing issues.

“We didn’t have time to review it. There was no time to review it because of the way that it was mustered,” said Neal. He said that any solution needs to hold up under the scrutiny of a magnifying glass and that’s what he intends to work on next year.

Neal’s primary challenger, Alex Morse — the mayor of Holyoke, Massachusetts — alleges a different explanation. Morse accused Neal of being bought by a $29,000 donation from the Blackstone Group, a private equity owner of physician-staffing company TeamHealth, which profits from surprise billing.

“It’s evident who Congressman Neal is working for. He’s certainly not working for the people,” said Morse. Neal’s office did not immediately respond to a request for comment.

There will likely be no end to surprise billing soon. Both parties are looking ahead to May as the next opportunity when a health bill will need to be passed to extend funding for community health centers.

A bipartisan bill to lower drug costs also failed this year after Senate Majority Leader Mitch McConnell blocked it in the Senate. However, the end-of-year spending bill does include one key health component: repealing the Affordable Care Act taxes, which health industry groups had been lobbying to kill.

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