When Your Doctor Is Also A Lobbyist: Inside The War Over Surprise Medical Bills
(Hannah Norman/KHN Illustration)
When Carol Pak-Teng, an emergency room doctor in New Jersey, hosted a fundraiser in December for Democratic freshman Rep. Tom Malinowski, her guests, mostly doctors, were pleased when she steered the conversation to surprise medical bills.
This was a chance to send a message to Washington that any surprise billing legislation should protect doctors鈥 incomes in their battle over payments with insurers. Lawmakers are grappling over several approaches to curtail the practice, which can leave patients on the hook for huge medical bills, even if they have insurance.
As Congress begins its 2020 legislative session, there is evidence the doctors鈥 message has been received: The bills with the most momentum are making more and more concessions to physicians.
听
As surprise medical billing has emerged as a hot-button issue for voters, doctors, hospitals and insurers have been lobbying to protect their own money flows. All that lobbying meant nothing got passed last year.
Television and internet ads are the most visible manifestation of the battle. But in taking their cause to politicians, doctors like Pak-Teng have waged an extraordinary on-the-ground stealth campaign to win over members of Congress. Their professional credentials give them a kind of gravitas compared with other lobbyists, who are merely hired guns.
Ending the practice of billing patients for the amount of their treatment not covered by insurance 鈥 sometimes triggered by unwittingly seeing a doctor out of network 鈥 is ultimately a fight between doctors and insurers over rate-setting and reimbursement. But as more patients balk at surprise bills 鈥 or suffer the enormous financial strain 鈥 lawmakers are under pressure to protect patients. In turn, powerful lobbying forces have activated to protect doctors and insurers who don鈥檛 want to pay the price for a fix.
The main message physicians are using to bring lawmakers into their corner? 鈥淲e just want to be paid a fair amount for the services rendered,鈥 Pak-Teng said.
Her congressman, Malinowski, has not endorsed any surprise billing legislation. In congressional testimony in July, he cited the 鈥渆xtra $420 million鈥 in medical debt patients in New Jersey reckon with each year.
鈥淭here are many things that Republicans and Democrats sincerely disagree about in this body,鈥 he said. 鈥淚 don鈥檛 think that this is one of them. I don鈥檛 see any philosophical difference amongst us about whether people should be stuck with massive surprise medical bills.鈥
Doctors say they are taking the brunt of the criticism.
But little has been as powerful in shaping surprise billing legislation as the clout of hospitals and their doctors, many of whom are, in fact, employed by private equity-backed companies and armed with years of experience shaping surprise billing legislation at the state level.
They are throwing in a lot of money, too, funneling millions to lawmakers ahead of the 2020 elections. Four physician organizations that have heavily lobbied on surprise medical bills and have private equity ties 鈥 the , , and 鈥 gave roughly $1.1 million in 2019 to members of Congress, according to a Kaiser Health News analysis of Federal Election Commission records.
The biggest recipients, from all four PACs combined, were Reps. Donna Shalala and Stephanie Murphy, Florida Democrats who got $26,000 each. Sen. Thom Tillis (R-N.C.) took in $25,500, Senate Majority Leader Mitch McConnell got $25,000, and Rep. Brett Guthrie (R-Ky.) received $22,500.
That was in tandem with a ground game led by local doctors. ER doctors, anesthesiologists, radiologists and other specialists who most often charge out-of-network prices 鈥斕齛nd also are among the highest-compensated practitioners 鈥斕齠anned out to shape legislation in a way that maintains their pay, and to voice their concern to lawmakers that insurance companies would have too much leverage to control their compensation.
鈥淲e by necessity place a tremendous amount of trust in our physicians,鈥 said Zack Cooper, an assistant professor at Yale University who has extensively researched surprise medical bills. 鈥淔rankly, they have an easier time lobbying members [of Congress] than the folks who are affected by surprise billing.鈥
Arguing Over The Fix
Lawmakers in both parties appear unified on the need to resolve the problem of surprise billing. But as was clear when all the air blew out of legislative proposals on the table at year鈥檚 end, that is largely where the agreement ends.
Fixing the problem comes down to settling on a system for deciding how much to pay for a disputed bill. One approach is to set up an outside arbitration process, in which doctors and insurance companies would negotiate payment 鈥 this is the model preferred by doctors, who contend it puts them on better footing against insurance companies. Another option would be to resolve surprise billing disputes by having insurance companies pay doctors based on the median in-network rate for the service, an approach known as benchmarking. Large employers, labor unions and insurance companies prefer this.
The failure to get legislation through Congress set up a potentially explosive battle in an election year. Republicans and Democrats who have vowed to do something about health care costs must reckon with powerful industry groups whose influence transcends party lines.
Meanwhile, physicians and hospitals have made their case in Washington and back home through in-person meetings and phone calls with lawmakers and congressional staff. They鈥檝e hosted dinners and fundraisers and organized fly-ins to swarm Capitol Hill with in-person meetings. They鈥檝e even led tours of their emergency rooms.
Pak-Teng is among them, coming to Washington this month with other physicians to petition lawmakers. She is employed by Envision, a physician staffing company backed by private equity firm . She鈥檚 also on the board of the American Academy of Emergency Medicine, a trade organization representing ER doctors.
鈥淭here is a lot of anti-physician rhetoric out there,鈥 said Pak-Teng, who is pushing her physician colleagues to be more active in shaping public policy by sharing stories about the reality of caring for patients.
The lobbying by hospitals and physicians trying to protect their reimbursements has divided key lawmakers, compounding disagreements among senior House Democrats over the policy details of a bill and turf wars in Congress. Three House committees have now unveiled legislation to ban surprise medical bills, each with different details.
鈥淲e are not trying to stop legislation. We are trying to stop bad legislation,鈥 said , an听emergency medicine physician who describes a 鈥渂ad鈥 bill as one that favors insurance companies over doctors.
Cirillo is also a lobbyist for US Acute Care Solutions, a physician staffing company backed by private equity firm . WCAS, which manages $27 billion in assets and is focused on health care and technology investments, is based in New York City and co-founded US Acute Care Solutions in 2015.
In an interview, Cirillo said he met with lawmakers and their aides about 鈥10 to 12 times鈥 in Washington last year. Financial disclosures show he spent $340,000 between July and September lobbying on surprise billing on behalf of US Acute Care Solutions. USACS鈥 political committee also contributed $134,500 to lawmakers in 2019, according to FEC records.
Tilt Toward Doctors
Before the private equity-fueled dark-money group started warning of the dangers of government price controls as an argument against legislation, surprise billing legislation being drafted in one of Congress鈥 most powerful health care committees was already tilting to be more favorable to doctors.
鈥淧eople on the Hill are very sympathetic to hospitals and physicians because they鈥檙e actually providing the care itself,鈥 said one Democratic aide, speaking on the condition of anonymity to candidly describe sensitive political dynamics. 鈥淣obody wants to defend the insurers.鈥
In May, a House Energy and Commerce Committee draft proposal included no mention of outside arbitration. The same was true for a bill the Senate Health, Education, Labor and Pensions Committee approved in June. Instead, under those proposals, surprise billing disputes would be resolved by insurance companies paying doctors based on similar rates in that area.
By mid-July, though 鈥斕齬oughly a week before Doctor Patient Unity registered as a business in Virginia 鈥 the Energy and Commerce legislation was amended to allow doctors to appeal to an independent arbiter if their payments exceed $1,250. The revision was pushed by two physicians on the committee 鈥 Democrat Raul Ruiz of California and Republican Larry Bucshon of Indiana 鈥 and was a moment Sherif Zaafran, a Texas anesthesiologist, describes as a 鈥渢urning point鈥 in negotiations over the bill.
鈥淚t鈥檚 all about fairness,鈥 said Zaafran, who works for private equity-backed U.S. Anesthesia Partners. He has been involved for a decade in surprise billing fights in Texas, which enacted a new law with an arbitration process last year.听U.S. Anesthesia Partners gave $197,900 in campaign contributions to members of Congress last year.
Zaafran chaired another coalition of medical specialists, Physicians for Fair Coverage, in 2019, and pressured Congress to pursue a surprise billing approach modeled on a New York law under which insurers and providers rely on arbitration. Under that process, if there is a payment dispute between doctors and insurers, the two sides submit a proposed dollar amount to an independent mediator, who then selects one.
In New York, the mediators were told to base their decisions on the 80th percentile of the prices set by the hospital or physician. Research has suggested that the model is broadly making health care more expensive for state residents because of higher payments to doctors, according to from the USC-Brookings Schaeffer Initiative for Health Policy.
Still, on Capitol Hill, doctors complained that many procedures would fail to cost enough to qualify for arbitration as proposed in the Energy and Commerce bill, bolstered by data ER doctors presented to lawmakers showing that prices mainly fall below $1,250.
鈥淚t鈥檚 largely out of reach,鈥 said Laura Wooster, a lobbyist with the American College of Emergency Physicians, whose political action committee contributed $708,000 to lawmakers in 2019. 鈥淭he problem with a threshold is, you just have one threshold. It鈥檚 going to impact different specialties so differently.鈥
By December, House Energy and Commerce Committee leaders and Sen. Lamar Alexander, a Republican who chairs the Senate HELP Committee, agreed to lower the arbitration threshold to $750 as part of a bipartisan agreement on a bill. Notably, several hospital lobbying organizations, such as the American Hospital Association and the Greater New York Hospital Association 鈥 the latter a strong financial backer of Senate Minority Leader Chuck Schumer 鈥 to back the deal.
Pak-Teng and other physicians also say that arbitration threshold is still too high. The House Education and Labor Committee has unveiled surprise billing legislation with a similar framework.
鈥淚鈥檓 open to listening to all sides on this,鈥 Rep. Greg Walden of Oregon, the top Republican on the House Energy and Commerce Committee, said in an interview. 鈥淲e want to make sure doctors are adequately compensated.鈥
Walden had harsh words for private equity firms that have attacked the Energy and Commerce legislation in a series of TV and internet ads, saying they were 鈥渕isleading and scaring people鈥 and just made lawmakers dig in deeper.听The ads prompted a bipartisan probe from Walden and committee Chairman Frank Pallone (D-N.J.) into how the companies have influenced surprise billing practices.
鈥淚鈥檓 not trying to hurtle a rock at them, but they鈥檝e been throwing a few my way,鈥 he said.
What鈥檚 Coming
Arvind Venkat, a employed by US Acute Care Solutions, traveled to Washington multiple times last year to meet with congressional offices representing Pennsylvania. But he also made sure to bring up surprise bills on his home turf, giving his congressman, freshman Democrat Conor Lamb, a tour of the emergency room at Allegheny General Hospital last summer.
鈥淭here are two issues here,鈥 said Venkat, who leads the Pennsylvania chapter of the American College of Emergency Physicians and has practiced at Allegheny General for 12 years. 鈥淧atients need to be protected, [and] we need to avoid anything that disrupts in-network relationships between insurers and clinicians.鈥
The call seems to have been heard: Legislation is likely to change further this year as the House Ways and Means Committee pushes an approach that is friendlier to hospitals and doctors. It builds off a committee leaders issued Dec. 11 that blunted momentum for a bipartisan deal that was to be included in a December spending bill.
The latest proposal from the committee includes an arbitration process to resolve payment disputes, with no minimum dollar amount needed to trigger it, and doesn鈥檛 ban surprise billing from air ambulance companies 鈥 a win for yet another special-interest lobbying group. The patient protections would not take effect until 2022.
U.S. Rep. Richard Neal, a Massachusetts Democrat who chairs the House Ways and Means Committee, remains an ally of Massachusetts hospitals.(Hannah Norman/KHN Illustration; Getty Images)
Richard Neal, a Massachusetts Democrat who chairs the committee, remains an ally of Massachusetts hospitals. He released the brief December surprise billing document two days after the Massachusetts Medical Society and Massachusetts Hospital Association arguing that benchmarking physician payments 鈥 as the Senate HELP and Energy and Commerce deal would do 鈥斕齱ould wreck the state鈥檚 health care system.
鈥淭he heavy hand of government would create an unfair imbalance in the health care marketplace and insurers would have no incentive to engage physicians in building robust health care networks. The connected system of care we have all been working toward in Massachusetts would immediately become fragmented and disjointed,鈥 the two groups wrote in The Boston Globe.
鈥淭hey weren鈥檛 asking for favorable treatment. They were asking for fair treatment, and there鈥檚 a big difference,鈥 Neal said in an interview. 鈥淚 don鈥檛 want to rule anything out, but I think that the momentum right now is arbitration.鈥
鈥淲e need to get a little bit more balance,鈥 added Shalala, who endorsed the Ways and Means legislation unveiled earlier this month.
Shalala has at least two hospitals in her Miami-area district that rely on private equity-supported physician staffing companies.
鈥淚鈥檓 worried about the hospitals,鈥 she said. 鈥淎nd the providers obviously include the docs.鈥
Victoria Knight contributed to this story.