NAHU submitted comments on Wednesday to the Senate Health, Education, Labor and Pensions (HELP) Committee in response to their discussion draft legislation aimed at reducing healthcare costs. The draft legislation addresses five core issues: creating more transparency, to include health insurance agent and broker compensation; ending surprise billing; reducing the prices of prescription drugs; boosting public health; and improving the exchange of health information technology. NAHU’s comments covered each of these sections of the draft legislation, and emphasized that additional federal requirements for agent compensation disclosure would be duplicative and burdensome on agents and employers.
The draft legislation includes two provisions that are aimed at providing greater transparency of healthcare costs by disclosing broker compensation. The legislation would require health benefit brokers and consultants to disclose to plan sponsors any direct or indirect compensation the brokers and consultants may receive for referral of services. This would be reported using a format similar to a 2007 proposed regulation by the Bush Administration for health and pension plan brokers. Further, the draft would require health benefit brokers to disclose to enrollees in the individual market any direct or indirect compensation the brokers may receive for referral of coverage.
Our comments noted our general support of transparency in the health insurance market but stressed that this oversight and disclosure already exist across the states, as well as Form 5500 for ERISA-governed plans. We highlighted existing licensure laws that require a disclosure of compensation to the client, as well as additional laws that further specify the details of those disclosures, as well as some states that have separate licensing laws for agents who wish to charge a fee to their clients instead of earning a commission on the products in which they are enrolling their clients. With regards to Form 5500, we noted that groups over 100 already must provide information about agent compensation and that any additional federal requirements for agent compensation disclosure would be duplicative and burdensome on agents and employers. We further noted that often agents are not aware of specific additional plan compensation that may be earned throughout the year, or of the commissions in certain markets that are “baked in” to the premiums, and the “broker of record” system has a built-in incentive for the broker to act in the best interest of the client, not the interest of the broker compensation.
NAHU led a separate comment letter with the Agent Alliance to specifically respond to the broker compensation provision. That letter reiterated the existing disclosure requirements by states and Form 5500, and cautioned against additional requirements that could be a financial burden on insurance carriers and employers as well as agents and brokers. In addition to NAHU, the alliance is comprised by Independent Insurance Agents & Brokers of America, National Association of Insurance and Financial Advisors, and National Association of Professional Insurance Agents.
The draft bill also includes a section with three options aimed at addressing surprise medical bills. The proposal calls for patients to be charged the same as if they received care in-network if a provider is out-of-network during an emergency or at an in-network facility. The first option for resolving payment disputes would be for in-network facilities to guarantee all providers as in-network; the second option would establish an independent arbitration system for bills over $750 and anything below would be based on contracted rates for the service area; and the third approach would simply pay the provider the median contract rate without going through arbitration.
Our comments shared many of the concerns we have been hearing from members on resolving surprise billing disputes. We expressed support for prohibiting balance-billing for all emergency services and requiring that consumers only be held responsible for the amount they would have paid in-network. We also supported written and oral notice at the time of scheduling about the provider’s network status and any potential charges they could be liable for if treated by an out-of-network provider. In the case that there is no option for the patient to transfer to an in-network provider, we suggested the health plan pay at the in-network level.
We cautioned against arbitration procedures to resolve balance-billing disputes as it could still result in patients being responsible for exorbitant costs from out-of-network providers. Further, the system does not apply to self-funded plans in states that use “baseball-style” arbitration, and while self-funded plans may choose to opt in to being regulated by this policy, it could create an uneven playing field in terms of the markets where arbitration can occur. With regards to how to simplify the calculation used to determine the maximum amount an emergency out-of-network provider can be reimbursed, we suggest using some percentage above Medicare rates as they are a widely used standard, easier to understand and calculate, and easier to administer. Finally, we advised the committee to address air ambulance surprise billing in separate legislation.
NAHU also offered feedback on reducing the prices of prescription drugs, improving public health and improving the exchange of health information. We expressed support for many of these initiatives, including updates to the “Purple Book” and the “Orange Book” will allow more transparency in the availability of biological products as well as provide up-to-date information on drug patents that could ultimately lead to lower costs to the consumers.
Separately, the Partnership for Employer-Sponsored Coverage, of which NAHU is a member, submitted its own comments that complemented many of the points NAHU provided. Their letter stressed the benefits of employer-sponsored coverage, including employers tailoring coverage to meet their workforce’s specific needs. Their comments expressed support for prohibiting balance billing for all emergency services and from providers that patients cannot reasonable choose in situations in which there was scheduled care with an in-network provider, but associated care was charged at an out-of-network rate. They noted opposition to an arbitration system to settle payment disputes and support for establishing a federal cap for emergency services at an out-of-network facility at 125% of the Medicare rate for the service.
As a discussion draft, the legislation is not yet formally introduced, but is expected to be released ahead of the July 4 holiday with changes incorporated from the received comments. Once released, the legislation is expected to face a committee hearing this summer so that it can be considered by the full Senate shortly thereafter. NAHU will continue to keep in close contact with the HELP committee on this legislation and for ways to improve the final language that is favorable to agents, brokers, and your clients.