Letter to House Energy and Commerce Committee on Surprise Billing and “Arbitration as a Fix”

By at 10 July, 2019, 9:12 am

Entrepreneurs and Small Business Want a Solution to Surprise Billing

…and It Does Not Include Arbitration

Dear Member of the Energy and Commerce Committee:

The Small Business & Entrepreneurship Council (SBE Council) and our more than 110,000 supporters and members nationwide appreciate the work you have completed and are doing to bring more affordability and competition to the health insurance market, and access to health care in general.

As you well know, small business owners, their employees and the self-employed are disproportionately impacted by high health coverage costs. Access to affordable health coverage is especially important for small business competitiveness, especially in the tight labor market where offering coverage has become more critical to attracting and retaining the employees entrepreneurs need to operate and grow their businesses. Steps taken by the Administration to bring more competition to the market, as well as actions taken by the previous Congress to lift burdensome Obamacare costs and mandates, are helping. As you know, more action is needed (for example, repealing the HIT tax and other Obamacare taxes) and entrepreneurs are appreciative of the work that is being advanced on surprise billing.

Recently, I joined 28 prominent health care experts to voice opposition to arbitration as a solution to surprise billing.  Arbitration is a highly inappropriate and misguided fix to surprise billing. As we note in our joint statement, arbitration is “not transparent” and “would be cumbersome to deploy, and highly favorable to those health care providers who charge high prices today.” The utilization of arbitration for surprise billing “could potentially open the door to a system quite unintended – establishing an inflationary dynamic that accommodates and encourages the rapid growth of costs.”

The last thing health care consumers need is a complex, obscure and drawn-out process when it comes to resolving a surprise bill. Moreover, we need to lower costs and bring market forces to bear on the cruel practice of surprise billing, not make matters worse.

The few players in the health care system who are engaged in the “business model” of surprise billing are allowed to operate without the benefit of competition. There is no financial accountability to patients or payers. The practice is not subject to the usual market forces of transparency and competition because it proliferates primarily in areas where consumers and insurers have little visibility and even less choice – in the emergency room and an on the operating table.

SBE Council has joined employer groups in support of a benchmark rate that is determined based on the average of local in-network market-based rates. We believe this is a fair and simple solution that addresses the few players who are exploiting what are effectively loopholes in the way doctors and hospitals bill for services.

If Congress fails to appropriately address surprise billing – which is a failure of the market – then we give single payer advocates an effective talking-point against the private system. It would be unfortunate if a practice that is relatively limited in scope is allowed to continue and become a defining critique of our market-based health care system.

Thank you for your support of America’s entrepreneurs and small business owners, and for your consideration of our views on this important issue. Please do not hesitate to contact me if you have questions, or need further information.


Karen Kerrigan, President & CEO

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