To End Surprise Medical Bills, New York Tried Arbitration. Health Care Costs Went Up

In 2015, the New York legislature in Albany passed a law to end the practice of surprise medical billing. Research suggests overall health care costs have risen as a result.

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Lobbying campaigns and legislative battles have been underway for months as Congress tries to solve the problem of surprise billing, when patients face often exorbitant costs after they unknowingly receive care from an out-of-network doctor or hospital.

As Congress considers various plans and negotiates behind the scenes, data is trickling in from states that have been test-driving proposed solutions.

New York was among the first to tackle the issue. In 2015, it passed a surprise billing law that uses “baseball-style” arbitration as a way to settle payment disputes between insurance companies and doctors. Under this approach, which is used in Major League Baseball to negotiate salaries (hence the name), each party submits a proposed dollar amount to the arbiter, who then chooses one as the final monetary award.