Legal expert worries ‘shadowy,’ radiology-backing private equity firms will derail surprise billing fix

Just as Congress appeared to be nearing the finish line in passing a fix to stop providers from issuing surprise medical bills last year, the whole thing went up in smoke. And some believe private equity firms—which are increasingly moving into radiology and other physician specialties—are at least partially to blame.

Legal expert Erin Fuse recently expressed her concerns about how this legislative process has unfurled in an opinion piece, published last week in the New England Journal of Medicine. The numbers are convincing: three-fourths of Americans want this problem addressed, and one such proposal could shave $20 billion off the federal deficit over the next 10 years.

There’s bipartisan desire to address this issue, too, she added. And yet, legislation was derailed at the eleventh hour. Fuse believes the blame rests largely on private equity’s shoulders. One lobbying group alone, called Doctor Patient Unity, has spent $28 million on ads opposing legislation.

“Congress’s inaction on this seemingly easy win demands explanation,” wrote Fuse, a professor and director of Georgia State University’s Center for Law, Health & Society. “The strongest opposition to the Senate HELP and House E&C bills and their resulting compromise came from a shadowy lobbying effort by private-equity–backed physician-staffing companies that profit from out-of-network billing strategies.”

Last we heard, two U.S. House committees advanced differing legislative proposals earlier this month to address this issue. Those included a “commonsense” new pitch from the Ways & Means Committee, which uses a baseball-style arbitration process to settle disputes between providers and payers. Another, from House Education and Labor would utilize a federal benchmark to settle payment disputes, which the American College of Radiology and other providers have opposed. In the meantime, Congress is also investigating private equity firms' billing practices and opposition to these proposals.

In her rundown, Fuse noted that the biggest sticking point is figuring out how much insurers will pay out-of-network radiologists and other payers in surprise-billing situations. A benchmark approach would favor payers and curb health spending; arbitration-only, meanwhile, favors rads and other docs and would increase spending; while the approach suggested by the House E&C would blend both. Fuse also noted that the arbitration-only approach favored by docs would actually increase the federal deficit.

After the last proposals passed earlier this month, all four committees are expected to stage a showdown to try and sort out all of their differences. But Fuse is doubtful that this “political tug-of-war” will reach the finish line.

“Although some observers remain optimistic, Congress’ failure to solve this problem in 2019 portends a difficult road ahead,” she concluded. “Deep-pocketed private equity firms continue to oppose any legislation that cuts into their profits, as they increase their investments in physician practices, air-ambulance operators and freestanding emergency departments. Nearly everyone else agrees that patients should be protected from surprise medical bills. The fact that a healthcare issue with this much public clamor and bipartisan agreement is vulnerable to corporate influence raises questions about both the role of private equity in health care and the ability of Congress to pass meaningful health care legislation.”