Millions of Americans continue receiving bankrupting surprise medical bills. While Congressional action is long past due, the recent proposal from the House Ways & Means Committee is a major step backwards, falling drastically short of providing the comprehensive solution needed to protect vulnerable patients.

The Ways & Means Committee proposal would do little to stop the hospitals and private equity firms that continue to extort patients, employers and American taxpayers with sky high prices for medical care. Adopting the solution advanced by the very same private equity firms and out-of-network providers that send surprise medical bills will create a new loophole for them to demand billions of dollars in additional charges. Worse, the proposal delays any meaningful action on surprise billing – leaving patients at the mercy of hospitals, private equity firms and debt collectors when Congress could end surprise medical billing today.

Organizations representing employers, health organizations and labor unions have been vocal and direct in their strong criticism of this proposal and the need for a comprehensive solution that ensures all patients and consumers can benefit from local, privately negotiated, market-based rates. Highlights from their responses are included below:

“By relying solely on arbitration as the presumptive fix for these charges, the Committee creates a dangerous incentive for out-of-network providers to abuse the system at the expense of patients and employers who shoulder the vast amount of these costs. As we have seen in New York, out-of-network providers have learned how to ‘game the system,’ raising premium costs for consumers and employees under an arbitration model.”

“To effectively address the root cause of this affordability crisis, this Committee and Congress must establish a process by which all patients and consumers can benefit from local, fairly negotiated, market-based rates. According to the Congressional Budget Officelinking out-of-network reimbursement to the median in-network rate would save consumers and taxpayers nearly $25 billion over the next ten years.”

American Benefits Council, Business Group on Health, Council of Insurance Agents & Brokers, The ERISA Industry Committee, HR Policy Association, National Alliance of Healthcare Purchaser Coalitions, National Association of Health Underwriters, National Retail Federation, Pacific Business Group on Health, Public Sector HealthCare Roundtable, Self-Insurance Institute of America, UNITEHERE (View full letter)

“…Unfortunately, the Ways and Means Committee is considering legislation that enshrines an arbitration approach and the distorted market incentives that encourage certain providers to remain out-of-network and generate surprise bills. Arbitration will prolong uncertainty and inject complexity and greater costs for consumers and for employers, who bear the largest portion of the overall cost of providing coverage to workers and families. As Congress strives to bring greater transparency to health care costs, arbitration is a step in the wrong direction. However artfully the legislation is crafted, arbitration brings unpredictability and potential individual bias of the arbitrator into the equation.”

American Benefits Council

“The plain truth is that Wall Street special interest money is behind this legislation in an effort to protect their private equity investments in a growing and lucrative new marketplace — investing in out-of-network physician groups who are providing services to patients in extreme duress and exploiting for profit the misery and vulnerability of patients in their most vulnerable moments. This bill will protect the ability for these groups to continue to end contracts with health plans and charge prices with no relationship to the market.”

“Strong bipartisan, bicameral legislation has already been worked out that would make major advances to rein in the surge in surprise medical billings. These are the bills that should be passed to help patients, stop surprise medical bills, and not stick the taxpayer with the bill.”


A government-mandated arbitration regime will waste billions of dollars and countless hours, and only reward the most financially-motivated players in the health care system— air ambulance companies, investor-owned physician staffing firms, and hospitals that have become financially intertwined with private equity firms. Each of these players refuse to work within networks or charge reasonable fees in emergencies, and the Committee proposal would lock in their current abusive practices, rather than correct their behavior for patients.”

“This new regime will increase costs, and there is no doubt that these costs will be borne by patients in the form of higher health insurance premiums, higher deductibles, higher copays and coinsurance, and less generous benefits.”

The ERISA Industry Committee

“…I urge you to oppose the ‘Consumer Protections Against Surprise Medical Bills Act of 2020,’ which would force employers into binding arbitration that will require them to pay 600% to 900% of Medicare reimbursement rates instead of free market negotiated rates. Instead of solving the problem by bending the cost curve in a more sustainable direction, this legislation will create an arbitration process that increases uncertainty making it more difficult to provide affordable health care benefits to employees and their dependents.”

HR Policy Association

 “The ‘Consumer Protections Against Surprise Medical Bills Act of 2020’ relies solely on arbitration, does not offer a viable solution to solve surprise medical billing for patients and employers, and could be worse than the status quo. In addition, one proposal significantly limits the benefits of fair, market-based rates by encouraging those specialists who charge the highest fees to recoup their costs through arbitration.”

“Arbitration does nothing to stem the tide of ‘blank check’ pricing by healthcare providers. It puts patients in the middle when they are at their most vulnerable and relies on employers to clean up the mess.”

National Alliance of Healthcare Purchaser Coalitions

“… we are very concerned about the Committee’s proposed legislation that relies on arbitration to resolve surprise-billing disputes as it increases healthcare cost inflation and puts an undue burden on small businesses that self-insure. Our position on this is based on our strong desire to protect consumers from flagrant charges from out-of-network providers and we believe this can be achieved by tying out-of-network reimbursement to privately negotiated, in-network rates. Of note is that the most egregious charges are coming from the private equity firms that have purchased these out-of-network provider groups.”


“Arbitration is a false promise for patients facing surprise medical billing nightmares. Allowing all out-of-network rate-setting decisions to be done by a third party will lead to more bureaucracy, less transparency and roughly $1 billion in additional costs to the health system. Additionally, the Congressional Budget Office projected that an arbitration model would raise costs for taxpayers by $5 billion to $8 billion, as compared to a market-based benchmark. It is not uncommon for our members who are the front line of these issues to spend many months working to resolve issues related to surprise billing. Our agents have found offers to negotiate to 125% of Medicare are routinely refused. The time expended on these negotiations between the carrier and provider can be lengthy for even amounts as small as $300. As a result, potentially expanding the use of arbitration will add to an already cumbersome process that increases costs for patients, businesses and taxpayers.”

National Association of Health Underwriters

“Your bill ignores the consistent call from NRF and business and labor allies for a fair local reimbursement rate based on the median in-network rate for out-of-network providers. It relies instead on a structured negotiation/arbitration approach to resolve disputes between employers and out-of-network providers. We fear such an approach will delay the efficient administration of benefits and ultimately increase health care and coverage costs. In addition, this legislation provides no protection against air ambulance bills. Stated simply, this bill will bend the health care cost curve in the wrong direction… Please note that NRF may consider floor votes against this legislation as Opportunity Index Votes for our annual voting scorecard.”

National Retail Foundation

 “Surprise medical bills are no accident; they are a calculated business decision propelled by the private equity sector, which has increasingly invested in medical specialties that generate a disproportionate share of surprise bills. These specialties remain out of network in order to charge high fees for urgently needed services.”

Arbitration in any form is not a viable solution to the surprise billing challenges facing American families. The addition of more bureaucracy into the health care system will continually undermine the central goal of this legislation: affordability and financial security. Just like we have seen in the state of New York, out-of-network providers have found ways to take advantage of the arbitration system at the expense of patients and employers who shoulder the vast amount of these costs. Arbitration fails to protect our citizens, leaving them to the whims a long, drawn out negotiation with high administrative costs and uncertain outcomes.” 

Pacific Business Group on Health

“To effectively end the abusive nature of surprise medical billing, Congress must establish a fair and equitable process in which patients and small employers can utilize unbiased, negotiated, market-based rates. In fact, many self-funded plans already have similar agreements in place through providers through ‘referenced base pricing,’ or RBP, arrangements.”

“In contrast, arbitration, or ‘independent dispute resolution,’ will impose greater bureaucracy as well as unnecessary legal and overall costs on healthcare consumers, who deserve more transparency and less costly options, not more. Similarly, arbitration would simply allow private equity-owned hospitals, air ambulances, and others to create excessive cost burdens on these small businesses, who will bear the brunt of an arbitration-style system. These out-of-network providers are already remaining out-of-network to charge higher costs for urgently needed medical services. Simply put, arbitration creates an opportunity for out-of-network providers to abuse the system at the expense of patients and employers who shoulder the costs of such practices. In order to protect America’s self-funded small- and medium-sized businesses, we urge the Committee to re-consider arbitration and protect the patients who need it the most through a fair and equitable private-sector benchmark.”

Self-Insurance Institute of America, Inc.