fah hospital policy blog

Perspectives on health policy affecting America’s hospitals and the patients we serve.

FAH, Other Hospitals Groups Advocate to Protect Patients; Warn about Dangers of Rate Setting

May 29, 2019 | FAH Policy Blog Team

Category: Legislation

The Federation of American Hospitals sent a letter today to leaders of the House Energy and Commerce Committee regarding the recently released “No Surprises Act” discussion draft highlighting areas of support and points where the policy needs to be improved.

FAH also joined the major hospital groups in sending a second letter to Committee leaders outlining a unified desire to protect patients from surprise medical bills.

Both letters explain the pitfalls of proposed rate setting policies and express support for dispute resolution methods like mediation and arbitration. In our letter, FAH reiterated support for a federal legislative solution that protects patients, noting that “policy solutions must have patients at their center, and we support the draft’s intent to prohibit balance billing and hold the patient to in-network cost-sharing in circumstances where the patient has no reasonable control over the network status of the providers administering care.”

While FAH supports the Committee’s efforts to protect patients, we do not support the discussion draft’s mechanism for determining payment from the health plan to the health care provider – rate setting that creates more problems than it solves.

As the letter states, “the discussion draft’s provider/health plan payment provisions will upend private payment negotiations between providers and health plans with ramifications far beyond the narrower issue the legislation seeks to cure.  By setting a payment ceiling, through a plan driven, non-transparent process, the discussion draft disincentivizes plans to create comprehensive networks – contrary to the preferred outcome, and harmful to patients… Instead of incenting plans to negotiate network agreements with providers in good faith, the payment ceiling will be used as inappropriate leverage  and have outsized influence not only on the small part of the market the legislation intends to address but on in-network payment and contracting across the country.”

FAH expressed strong opposition to any legislation that includes such set payments and instead said policy makers should focus on mediation (similar to a law just passed in Texas) or arbitration (like the system currently used in Florida or New York).

“We believe that such a dispute resolution process that allows a neutral third party to mediate or determine fair payment is far superior to setting a statutory payment rate and will avoid the negative consequences for patients that setting a rate will likely incur.”

FAH looks forward to continuing to engage with Committee leaders to protect patients from surprise medical bills.

You can find the complete letter here.

Many of these same points are made in the unified letter from hospitals, which can be found here. It was signed by FAH, the American Hospital Association, Catholic Health Association of the US, America’s Essential Hospitals, the Children’s Hospital Association and the AAMC.