Senators agree surprise medical bills must go. But how?

Two years, 16 hearings and one massive bipartisan package of legislation later, a key Senate committee says it is ready to start marking up a bill next week designed to contain health care costs. But it might not be easy since lawmakers and stakeholders at a final hearing Tuesday showed they are still far apart on one simple aspect of the proposal.

That sticking point: a formula for paying for surprise medical bills, those unexpected and often high charges patients face when they get care from a doctor or hospital that isn't in their insurance network.

"People get health insurance precisely so they won’t be surprised by health care bills," said Sen. Maggie Hassan (D-N.H.), the co-author of a separate proposal to tamp down surprise bills. "So it is completely unacceptable that people do everything that they’re supposed to do to ensure that their care is in their insurance network and then still end up with large, unexpected bills from an out-of-network provider."

It's a cause that has been taken up by President Donald Trump and various bipartisan groups of lawmakers on Capitol Hill.

The wide-ranging legislative package on curbing health care costs is sponsored by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), the chairman and ranking member of the Health, Education, Labor and Pensions (HELP) Committee. Given the committee's influence, and because this legislation has bipartisan support in the Senate where not many bills are moving, industry observers are taking the HELP panel's proposal very seriously.

Alexander and Murray's bill lays out three options for paying surprise medical bills but does not specify which path the final legislation should take. Advocates for each of the choices were among the five witnesses Tuesday.

Their positions fell along familiar fault lines. Everyone acknowledged that patients who stumble into a surprise bill because their emergency care was handled at a facility not in their insurance network or because a doctor at their in-network hospital doesn't take the patient's plan should not have to pay more than they would for an in-patient service. But they differ on how much doctors, hospitals and other providers should be compensated and how the disputes should be resolved.

Tom Nickels, an executive vice president of the American Hospital Association, cautioned against using benchmarks to set pay levels, such as local customary averages or a price set in relation to Medicare. He said such a plan might underpay providers and hospitals could lose their leverage to negotiate with insurers.

Elizabeth Mitchell, president and CEO of the Pacific Business Group on Health — a group that represents employers, including some who are self-insured who pay their workers' health costs— said doctors should be paid 125% of what Medicare pays. She told senators that an independent arbitration process like the one Nickels advocates would add unnecessary costs to the system.

Benedic Ippolito, a researcher with the American Enterprise Institute, said requiring all providers in a hospital to be in-network was the cleanest solution.

"On surprise billing, all three approaches are equal in that first and foremost they protect the consumer," said Sean Cavanaugh, chief administrative officer for Aledade, a company that matches primary care physicians with accountable care organizations.

There was also broad support among the witnesses for some of the legislation's transparency measures, especially the creation of a nongovernmental nonprofit organization to collect claims data from private health plans, Medicare and some states to create what's called an all-payer claims database. That could help policymakers better understand the true cost of care, these experts told the committee.

Sen. Susan Collins (R-Maine) expressed trepidation about the all-payer claims database, noting that increased transparency could hurt rural hospitals, which typically charge higher prices than those in cities because their patient base is small and they need to bring in enough revenue to cover fixed costs.

The witnesses also offered support for eliminating "gag clauses" between doctors and health plans. These stipulations often prevent providers from telling patients the cost of a procedure or service.

"Patients and families absolutely have skin in the game … but they are in a completely untenable and unfair situation. They have no information," said Mitchell, from the Pacific Business Group on Health. "We're talking about providers not being allowed to share information. … Transparency is necessary so people can have active involvement."

If one thing is clear, it's that Alexander doesn't want this summer to be a rehash of last year, when it appeared he had a bipartisan deal to address problems in the federal health law's marketplaces before the effort fell apart.

"For the last decade, Congress had been locked in an argument about the individual health care market," said Alexander at Tuesday's hearing. "That is not this discussion. This is a different discussion. We'll never lower the cost of health insurance until we lower the cost of health care."