Rejects Costly, Fake Solution to End Surprise Billing
WASHINGTON, DC. November 13, 2019: The Council for Affordable Health Coverage (CAHC) – a coalition of employers, insurers, life science companies, PBMs, brokers, agents, patient groups, and physician organizations released a new cost estimate of the binding arbitration policy included in H.R. 2328, passed by the House Energy and Commerce Committee.
The independent analysis by CAHC Chief Economist and Congressional Budget Office (CBO) alumnus Jeff Lemieux found that binding arbitration would place an additional $6.2 billion in added costs to the federal budget, and $21 billion in total costs on employers and private payers.
Because employers and insurers pass these added costs onto consumers in the form of increased premiums or cost sharing, patients will end up paying more as a result of binding arbitration versus a pure benchmark model. Experience from the New York arbitration process confirms this will increase private payer costs both as a result of the higher payment rates and greater administrative costs.
“Patients have already paid too much– now the “solution” some have offered is yet another surprise bill no one should get” said CAHC President Joel White. “Congress should enact a clean ban to surprise billing and reject costly binding arbitration.”
CAHC has built the analysis on the CBO estimate of the incremental cost of the binding arbitration provision and the savings from the Consumer Price Index (CPI) provision. The table included in the report uses the CAHC surprise billing model, and accounts for CBO’s note that the binding arbitration provision would reduce savings by approximately 25 percent. The report illustrates in more detail the possible annual, and 10-year savings, due to the CPI provision and cost of the binding arbitration provision of H.R. 2328, as well as the total estimated private health insurance cost (employer and individual markets) over those same timeframes.