Federal Update

On July 17, the U.S. House of Representatives voted 419-6 to repeal the provision in the Affordable Care Act (ACA) that would impose a 40% tax on high cost health plans.  The overwhelming bipartisan vote reflected how unpopular the tax -- which Congress had previously delayed until 2022 -- has been with labor unions, businesses, insurers and others since it was included in the ACA.

The Obama Administration included the tax in the ACA as a revenue source to fund coverage expansion and a way to discourage very rich benefit health plans as a cost containment strategy.  Many health economists say such plans drive increased use of health care. (Others argue that high prices of health care services are the key factor in increased health care spending.)

The Senate has a companion bill, but it's not clear when or if it will take it up. Proponents hope the overwhelming House vote will compel the Senate to vote on its bill by the end of the year.

Also on July 17, the House Energy and Commerce Committee approved a bill that would protect patients from high charges from out-of-network providers at in-network facilities, such as a plastic surgeon who sees a patient in an emergency room who the patient doesn't know is out-of-network. In these situations, patients can receive substantial "surprise" bills for their care.

The bill originally provided that in these situations, out-of-network providers would be paid at the median in-network rate in their geographic areas -- an approach favored by insurers and employers. On Tuesday, an amendment was agreed to in order to win over lawmakers who had pushed for arbitration instead of a payment benchmark -- an approach doctors and hospitals prefer. Under the bill that passed, the government would establish a payment benchmark for out-of-network providers, but providers and insurers would be allowed to request arbitration in cases where the in-network payment rate exceeds $1,250.

BCBSA strongly opposes arbitration and issued a statement:

“We believe strongly that patients must be protected from receiving a surprise bill when they have done all they can to receive care within their health plan’s medical network. The fairest, most transparent and predictable way to settle payments to out-of-network clinicians is through a clearly defined payment benchmark based on the rate paid to in-network physicians in a given area. The Congressional Budget Office has determined that this method saves nearly $25 billion. It’s vital that lawmakers crafting legislation maintain the benchmark protections and reject establishment of a cumbersome arbitration process that will raise costs for everyone.”

New York's surprise billing legislation, in effect since 2015, uses an arbitration model to settle such payment disputes. BlueShield has had mostly favorable results in our cases that have gone to arbitration. The New York law only applies to fully insured plans. If passed, the federal law would apply to self-insured plans as well, potentially resulting in separate processes.

It's not clear when the full House will vote on the bill, or when the Senate will consider its version, although there is strong bipartisan desire in both chambers to pass surprise billing legislation this year.

The additional items include such prescription drugs and devices as insulin for diabetes, blood pressure monitors for hypertension, statins for heart disease and/or diabetes, and peak flow meters for asthma. In a third development on July 17, the Internal Revenue Service added care for a range of chronic conditions to the list of preventive care benefits that may be provided by a high deductible health plan (“HDHP”) before the deductible.

This action is in response to the President's recent Executive Order to the Treasury Department to expand the ability of patients to select HDHPs that help individuals with chronic conditions maintain their health status.

The additional items include such prescription drugs and devices as insulin for diabetes, blood pressure monitors for hypertension, statins for heart disease and/or diabetes, and peak flow meters for asthma.