White House warns of raising health costs in debate over surprise medical bills

The White House on Tuesday stepped farther into the contentious debate over legislation to protect patients from surprise medical bills, weighing in with a warning against one approach to the problem. 

A statement from the White House warned against the overuse of arbitration to resolve billing disputes, saying it could drive up health care costs. That means the White House is raising concerns with an approach from the House Ways and Means Committee in favor of a rival approach favored by both the House Energy and Commerce Committee and the House Education and Labor Committee. 

The move makes for some strange bedfellows, as the administration is siding with consumer groups and unions, traditional Democratic allies. The White House is now more aligned with the AFL-CIO on the issue than some Democratic lawmakers, including House Ways and Means Committee Chairman Richard Neal (Mass.) and Senate Minority Leader Charles Schumer (N.Y.).

The goal of all of the approaches is to protect patients from getting bills for thousands of dollars when they go to the emergency room and one of their doctors happens to be outside their insurance network. But a raging dispute centers on how to then figure out how much the insurer will pay the doctor. 

Bipartisan bills from the Energy and Commerce and Education and Labor committees would set the payment rate based on the median amount that is paid for that service in that geographic area, with the option of arbitration for some high-cost bills. 

Doctors and hospitals have lobbied hard against that approach, warning that it would lead to damaging cuts to their payments. They instead favor an approach from the Ways and Means Committee, which relies entirely on arbitration to resolve the disputes.

White House spokesman Judd Deere on Tuesday warned against that, saying the administration is “concerned that a push to overuse arbitration will raise healthcare costs.”

Deere emphasized that President Trump wants Congress to send him legislation to address surprise billing. 

The AFL-CIO and the liberal consumer group Families USA have also both warned against the Ways and Means arbitration approach, putting them on the same side as the White House. 

Schumer and Neal, along with some other Democrats, support the arbitration approach backed by doctors and hospitals and used in the Ways and Means bill. 

The strange alliances illustrate that the issue is divided not on partisan lines, but based on an array of competing policy preferences and industry group jockeying.

Asked about the concerns with the approach, a Neal spokeswoman said, “We are confident that the bipartisan Ways and Means proposal is the best option to protect patients and American jobs.”

The Congressional Budget Office (CBO) released an analysis of the Ways and Means bill on Tuesday, finding it would reduce the deficit by about $18 billion over 10 years, compared to about $24 billion for the Energy and Commerce and Senate Health Committee proposal. The Ways and Means bill would reduce premiums between 0.5 and 1 percent, while the Energy and Commerce bill would reduce premiums by about one percent, the CBO found.