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CAP Opposes Payment Formula for Out-of-Network Services Set by Senate HELP Legislation

Creating an arbitration system similar to those currently working in states would protect patients and reduce costs.

WASHINGTON—Citing concerns over a payment formula that creates imbalance and threatens patient access to pathology services, the College of American Pathologists (CAP) opposes the out-of-network reimbursement provisions included in the Lower Health Care Costs Act.

The Lower Health Care Costs Act released earlier this week by the Senate Health, Education, Labor, and Pension (HELP) Committee mandates that physicians be paid median contracted rates for out-of-network services provided at in-network hospitals and facilities. This policy, if enacted, gives large insurance companies the ability to set payment rates and eliminates the economic incentive for an insurer to negotiate a contract with a provider. As a result, insurers will unilaterally determine the value of physician services and subsume the physician component of hospital care within its own financial, and, potentially, operational control.

In addition to holding patients harmless from surprise medical bills, the CAP urges the HELP committee to amend the Lower Health Care Costs Act by creating a baseball-style arbitration process that allows physicians and insurance companies to settle out-of-network bills. Independent arbitration systems have worked at the state level by protecting patients and reducing costs. In addition to an independent alternative dispute resolution process, the CAP urges the committee to pass legislation that will require network adequacy standards for health insurers as part of the holistic solution to address the problem of surprise billing. 

The CAP looks forward to its continued engagement with Congress to pass commonsense legislation that addresses the issue of surprise bills by protecting patients from the financial risk of out-of-network bills, ensuring the economic viability of the health care delivery system, and preserving patient access to physician specialists.

About the College of American Pathologists

As the world's largest organization of board-certified pathologists and leading provider of laboratory accreditation and proficiency testing programs, the College of American Pathologists (CAP) serves patients, pathologists, and the public by fostering and advocating excellence in the practice of pathology and laboratory medicine worldwide. For more information, visit yourpathologist.org to watch pathologists at work and see the stories of the patients who trust them with their care. Read the 2018 CAP Annual Report at CAP.ORG.