Rep. Richard Neal, who has represented central and western Massachusetts in Congress since 1989, likes to frame his brand of business-friendly moderation as purely pragmatic.
After taking the helm of the powerful House Ways and Means Committee in January 2019, Neal emphasized his mastery of the “arcane details” associated with legislating in an interview with the Berkshire Eagle.
“This is about getting something done,” he declared.
But when top congressional Republicans, who typically oppose even the most modest health care regulations, joined with Democrats toward the end of 2019 to curb the byzantine practice of “surprise” medical billing ― when health care providers outside of a hospital’s insurance network spring exorbitant bills on unwitting patients ― Neal almost single-handedly prevented Congress from “getting something done.” He objected to the bill at the last minute, grinding the legislative process to a halt. Reform has not moved forward since.
The bipartisan bill was “a pretty well-established deal on the table,” said Loren Adler, a health care policy expert at the Brookings Institution. “All the wind came out of the sails when [Neal] threw his proposal into the mix.”
The issue of surprise medical billing is not easy to summarize in a 30-second campaign advertisement.
But in the course of Holyoke, Massachusetts, Mayor Alex Morse’s campaign to unseat Neal in Tuesday’s Democratic congressional primary, Morse and his allies have done their best to turn it into a case study of how Washington has turned its back on ordinary people. They argue that Neal’s actions were a prime example of legalized corruption: He has benefited from a flood of campaign cash from private equity firms, hospitals and doctors who profit from surprise medical billing and expect their contributions to Neal to help keep the money flowing.
Whether Neal survives the progressive primary challenge or not, anti-corruption activists see the race as a step in the direction of accountability for members of Congress accustomed to thinking that backroom deals with corporate interests are too obscure to elicit scrutiny from voters.
Surprise billing “became a defining issue early on” in the Morse-Neal race, said Faiz Shakir, an adviser to the group Fight Corporate Monopolies, which spent $325,000 on TV ads accusing Neal of selling out patients for the private equity donors that fund his campaign.
Congressional Democrats, he added, “are now seeing that the contributions they take and the actions they perform in Congress for corporate America can be used against them.”
The Surprise Billing Deal That Wasn’t
Surprise billing occurs because certain kinds of doctors and other health care providers find that they can make more money by refusing to participate in a hospital’s insurance agreements. It’s particularly common among doctors involved in emergency care, such as emergency-room physicians, pathologists (doctors who perform lab tests) and anesthesiologists. These physicians stand to profit more from declining insurance because patients seeking urgent, non-elective medical care typically cannot avoid using their services.
In cases of surprise billing ― officially known as “balance” billing ― insurers typically cover a small fraction of these out-of-network doctors’ bill, and the doctor or hospital where the doctor works sends the patient a bill for the remainder. These bills are often financial and emotional nightmares for patients forced to pay a “sticker” price for medical procedures that are not constrained by a normal market force like competition. Sarah Kliff, a New York Times reporter who has documented some of the most extreme cases, highlighted the ordeal of a woman charged over $5,700 for spending time in an emergency room waiting room.
The rates of surprise billing have increased dramatically in recent years as private equity firms, hungry for a new profit stream, have begun buying up physician staffing firms that employ out-of-network medical specialists and expanding their ranks. Hospitals profit from the practice as well by shifting at least some of the cost of retaining high-paid doctors onto patients.
The cleanest solution to the problem of surprise medical billing would be to legally prohibit medical professionals who practice at a given hospital from opting out of the hospital’s insurance agreements. But given the multi-million dollar public relations offensive launched by private equity firms warning that surprise billing reform would usher in “doctor shortages” and “hospital closures,” it was likely that industry stakeholders would carve out at least some concessions.
In the end, Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Health, Education, Labor and Pensions Committee joined forces with House Energy and Commerce Committee Chairman Frank Pallone (D-N.J.) and the committee’s most senior Republican, Rep. Greg Walden, to put forward a compromise plan in December 2019. The bill would end “surprise” billing and to ensure that insurers would not just shift the cost of out-of-network payments back onto patients, the lawmakers capped out-of-network payments at $750 with an option to negotiate a higher rate in arbitration.
BuzzFeed News reported at the time that while some lawmakers remained wary of the bill and special interests were waiting for the slightest sign of weakness to pounce, the bill’s chief co-sponsors were confident that it would pass both houses of Congress and head to President Donald Trump’s desk to be signed.
Then Neal, who had only a nominal jurisdiction over the bill (his committee generally does not deal with regulating the health care industry), released a counter-proposal that made it clear that the bill as written could not proceed without changes. His alternative, originally just one page long, was more favorable to out-of-network doctors and their backers because it scrapped the $750 cap on out-of-network payments.
“There’s no question that Chairman Neal’s movement very late in the process to assert his very, very narrow jurisdiction over this issue created uncertainty and slowed things down at the end of the last session.”
- Frederick Isasi, Families USA
Proponents of the bill, inside and outside the halls of Congress, were furious, blaming Neal for tanking the prospects of a resolution in 2019.
“There’s no question that Chairman Neal’s movement very late in the process to assert his very, very narrow jurisdiction over this issue created uncertainty and slowed things down at the end of the last session,” Frederick Isasi, executive director of the nonpartisan patient advocacy group Families USA, told HuffPost in April.
Other critics accused Neal of being swayed by the private equity firm Blackstone, which owns TeamHealth, one of the country’s largest physician staffing companies.
Neal had not received donations from Blackstone in the previous three election cycles. Then, in 2019, he began receiving hefty donations from the firm’s top officers that would total nearly $32,000. Blackstone President Jonathan Gray contributed $5,600, the combined maximum for the primary and general elections. And Neil Simpkins, a senior executive who oversaw Blackstone’s acquisition of TeamHealth in 2016, gave Neal $2,800.
At the time that he scuttled the bill, Neal said that the process had been too rushed. He later expressed concern that the Alexander-Pallone-Waldman bill would have jeopardized the health of hospitals in Massachusetts’ 1st Congressional District.
It’s an argument that echoes what Dr. Mark Keroack, CEO of Baystate Health, the parent company of a major hospital in Springfield, wrote in a MassLive op-ed praising Neal a few weeks after he killed the bill. (Keroack also contributed $1,000 to Neal’s campaign this past March.)
Keroack, who co-wrote the op-ed with the head of a local physicians’ trade group, called for insulating patients from harm while preventing “undue government interference in private contracts” that would jeopardize “patient access to healthcare services.”
Without a system for capping out-of-network costs, experts like Adler of the Brooking Institution fear that providers could continue to charge exorbitant prices and insurers would simply pass the higher costs onto patients in the form of higher premiums and other fees.
What’s more, it’s hard to believe that hospitals are so financially precarious that they need the savings provided by surprise billing in order to thrive. Baystate Health reported profits of more than $68 million in fiscal year 2017.
Since the onset of the COVID-19 pandemic, Baystate Health has also received over $32 million from a hospital assistance fund in the Coronavirus Aid, Relief, and Economic Security Act, which Neal frequently claims credit for helping write. Despite the aid that the hospital system received, top executives at Baystate encouraged managers to furlough employees and force them to use up their paid time off, according to a report by the investigative news site Sludge.
“That’s the tactic that hospitals have used against reform forever: That anything that cuts one dollar is suddenly going to drive them all out of business,” Adler said.
Putting Neal On The Defensive
From the moment that Neal stopped the bipartisan deal to end surprise billing in December, Morse (his progressive challenger) jumped on it as an example of the 16-term incumbent’s closeness to corporate America. “It’s evident who Congressman Neal is working for. He’s certainly not working for the people,” Morse told BuzzFeed News at the time.
Morse and his allies knew they had found a politically potent issue when Data for Progress, a progressive think tank and polling firm that consults for Justice Democrats, a left-wing group backing Morse, found strong responses to the issue among voters in Massachusetts’ 1st District. Almost three-quarters of respondents to a March poll said that a statement claiming that Neal had “tanked” the surprise billing legislation after receiving $680,000 in contributions from insurance and pharmaceutical companies would be a “convincing” argument to vote against him.
The Morse campaign has hit Neal on the issue in campaign mailers, digital ads and a 1-minute TV spot running in the final week of the campaign.
Neal’s “gotten more and more power, but hasn’t used it to help us,” Morse says in the ad. “Instead, Neal has used his power to help big corporations ― like when he killed a bill that would protect people from getting surprise medical bills.”
But Morse has had the leeway to devote some of his earlier TV ads to other themes thanks to the work of Fight Corporate Monopolies, which raised the issue’s profile for him. The group is a political arm of anti-monopoly think tank American Economic Liberties Project.
Fight Corporate Monopolies decided that highlighting the connection between the campaign cash that Neal had received from Blackstone and his veto of surprise billing reform would be the perfect case study for shaming a politician engaging in legalized corruption. The group spent $325,000 on a TV ad blasting Neal for his conduct based on the principles at stake. The 30-second spot, which aired on network television in Springfield starting in early July, managed to succinctly explain the concept of surprise billing, Neal’s role in derailing a bipartisan resolution to it, and his connection to the private equity industry.
“Corporate power is corrupting democracy and Richie Neal is part of the problem,” the ad concludes.
“I want to believe in a different way.”
- Pam Thompson, a voter in the district
Morse has also personalized the issue by elevating the voices of district residents who have been hit with surprise medical bills, including Pam Thompson, a writer from Worthington, who spoke at a virtual press conference convened by the Morse campaign in July.
In the summer of 2019, Thompson’s daughter, an undergraduate at Northwestern University outside Chicago, was referred to a hospital emergency room because she was experiencing sharp stomach pains. The emergency room personnel ran tests and scans but never managed to diagnose the mystery ailment. Thompson’s daughter’s stomach pain eventually subsided on its own.
A few months later, in September 2019, the Thompsons received a bill for $15,000 for the emergency room visit. The family of four was especially shocked by the price because they already pay $19,000 a year on a state-regulated health insurance plan available for families earning less than 300% of the federal poverty level.
What followed was an agonizing ordeal. Pam put in an estimated 120 hours of work over the course of more than four months using every means at her disposal to waive the bill, get it reduced, or receive some kind of subsidy.
In February when the bill went into collection, Thompson reached out to all of her state and federal elected officials and received direct responses from all of their offices except Neal’s. (Neal campaign spokesperson Kate Norton said the congressman’s Pittsfield office was in touch with Thompson’s state representative about the matter.)
Whether it was thanks to the behind-the-scenes help of elected officials or Thompson’s threat of a publicity campaign, the hospital finally caved and dismissed the bill.
Thompson, whose trying experience reaffirmed her support for “Medicare for All,” was more dismayed by Neal’s role in derailing surprise billing reform than the lack of outreach from his office.
“Richie Neal represents this old kind of politics where it’s really pay to play ― that’s what he is,” Thompson said. “And I want to believe in a different way.”
Will It Matter?
Neal has responded to stories like Thompson’s and the barrage of related attacks from Morse and groups like Fight Corporate Monopolies by turning the tables on his critics.
In an August debate with Morse, Neal argued that he was the more genuine opponent of surprise billing since he is siding with hospitals and doctors against health insurance companies.
“The insurance industry is opposed to my bill,” Neal said in a moment that he later circulated video of on social media. “You know who supports my bill? The providers, the hospitals, the health care centers.”
Neal’s characterization of the two bills is misleading. Insurers supported the Alexander-Pallone-Walden bill that was tougher on providers mostly because of the positive public relations value it offered them, according to the Brookings Institution’s Adler. In the end, they are fine with either outcome, because they can always shift additional costs of payments to out-of-network providers onto patients.
“Insurers have a lot less to gain than consumers do.”
- Loren Adler, Brookings Institution
“Insurers have a lot less to gain than consumers do,” Adler said.
Whether Neal’s talking point succeeds in muddying the debate or not, the health care providers he is happy to count as allies have come through for him in his time of need. The American Hospital Association, a powerful Washington lobbying group, has poured $500,000 into a super PAC blanketing the airwaves with pro-Neal TV ads. Trade groups representing various medical specialties ― including radiology, neurology, plastic surgery, podiatrists and chiropractic care ― have also rushed last-minute donations to Neal’s campaign in the days before the election.
In the most recent public poll of the race, Neal was ahead of Morse by 9 percentage points. Several voters in the district, including Morse supporters, told HuffPost they were unfamiliar with the issue and motivated by other factors.
Whether Neal wins or loses though, Shakir believes that Fight Corporate Monopolies and other opponents of corporate influence in politics can take heart in knowing that corruption became a dominant theme in a race that many observers never thought would be as competitive.
“When we boil it down to wins and losses, they obfuscate the advances that have been made,” he said. “You’ve taken a very powerful member of Congress, educated the people in this district, and changed the narrative in a major way.”