Joining a growing chorus of support for a fair, local, market-based approach to protect patients and families from surprise medical billing, more than 30 key employer and labor organizations are calling on Congress to address the market failure—fueled by a handful of private equity firms—that drives the problem.

The joint letter urges policymakers to protect patients from surprise medical bills the right way: implementing a fair, local, market-based benchmark that would protect patients, families and taxpayers, while rejecting arbitration proposals that would give a green light to certain out-of-network providers to continue charging exorbitant rates for care.

Organizations signing onto the letter include the AFL-CIO, Unite Here, Laborers’ International Union of North America, the ERISA Industry Committee and the Colorado Business Group on Health.

Highlights from the letter are included below:

“Patients, employers, consumers, and labor unions are deeply concerned about the burden that unexpected medical bills from out-of-network providers place on employees and their families. Unfortunately, the surprise billing problem has been fueled by a handful of private equity firms and providers that are exploiting a market failure and price gouging patients and their families. Supporting the local, market-based benchmark provisions in Title I of S. 1895, the Lower Health Care Cost Act, will protect patients without undermining network participation or increasing health care costs for all consumers. We urge you to oppose government-mandated arbitration, which will increase confusion, complexity and costs.”

“The surprise medical billing problem is driven by a small number of outlier providers. According to research from Yale University, 15 percent of hospitals have out-of-network billing rates for emergency services above 80 percent, while 50 percent of hospitals have out-of-network billing rates below two percent. This is largely attributable to a handful of private equity firms exploiting a market failure.”

“A benchmark payment based on local, in-network rates would ensure provider payment takes into account the cost of providing care in each market while directly addressing the problem of out-of-network outliers who continue to charge extreme rates. Data show that in many cases, a median, in-network rate would still far exceed the Medicare rate provided for the same service in the area. For example: anesthesiologists are reimbursed a median contracted amount of 344 percent of Medicare; emergency physicians’ average contracted rates are 306 percent of Medicare; and, radiologists’ average contracted rates are 200 percent of Medicare.”

“[Arbitration] makes the entire process of addressing surprise medical billing more confusing, less transparent, and more expensive for consumers, employers and taxpayers. For example, an initial leaked estimate from the Congressional Budget Office found that arbitration would cost $1 billion in new administrative fees. Our health care system needs less complexity and lower costs – not more. Congress should not create additional confusion and expense by mandating arbitration as a way to settle surprise medical billing.”

To view the full letter, click here.