Surprise medical billing is a problem that needs a solution. My own preference is for a Federal Trade Commission (FTC) solution. Senator Bill Cassidy (R-La.) has an arbitration solution that is almost as good. The Senate Labor Committee, by contrast, wants to engage in price fixing.

Alert: I haven’t delved into all the details of the congressional legislation—details that may change anyway. What follows is an analysis of the principles involved.

The Problem. In the latest survey, 43 percent of all emergency department visits and 42 percent of all hospital admissions resulted in out-of-network charges. They averaged $628 and $2,040, respectively. In some cases the bills were horrendous, including a $50,000 allergy test and a $500,000 dialysis bill.

In most cases patients are completely unaware that some of the care being delivered is not in their insurer’s network—assuming that when they go to an in-network hospital, all the services will be in-network. Hospitals usually do nothing to alert patients before the final bill is presented.