Surprise Billing Regulation Faces Pushback from Medical Groups
The American Medical Group Association (AMGA) letter called on CMS to revise the interim final rule implementing the No Surprises Act, completely changing ruling favouring insurers in the surprise billing federal independent dispute resolution (IDR) process.
The No Surprise Act was signed in December 2020 to protect patients from receiving surprise out-of-network medical bills. The interim final rule permits patients with an employer-sponsored or individual health plan to discuss refused payments for specific medical claims. The law goes into effect on Jan. 1, 2022.
Lawmakers created an attribution process detailed in the interim final rule that explains how providers and payers will decide out-of-network rates when surprise billing happens.
The rule provides payers and providers with 30 days to discuss the pricing of medical bills. If both parties cannot attain an agreement after 30 days, either party can start an independent dispute resolution process.
The IDR process calls for the parties to select a certified IDR entity to mediate the conflict. The entity will then issue a determination based on the payer’s median in-network rate for a similar service in the area.
Some people say that CMS should recognize the danger of effectively predetermining the result of the arbitration process. The process could influence how payers deal future contracts with providers by favouring a particular rate.
The organization representing over 170,000 physicians highlights the need of revising the IDR process to avoid undermining negotiations between payers and providers by disproportionately considering one factor, the qualifying payment amount (QPA).
AMGA inspires CMS to consider a variety of factors like a demonstration of good faith, market shares of both parties, patient acuity, level of training, quality of the clinician, services offered by the facility, and insurer median in-network rate during the IDR process to determine the more suitable and more appropriate pace.
CMS also requires providers to offer a reasonable faith estimate (GFE) of the cost of items and services provided to uninsured or self-pay patients as a part of the interim final rule. AMGA explains that GFEs will create more mess for uninsured and self-pay patients, lead to inaccuracies, and overcome provider’s administration and non-clinical staff.
Some people said that The GFE is not a contract but only an estimate. All of this will make a mess and additional frustration for patients, which is precisely the opposite of what the No Surprise Act planned.
For the GFE to be helpful, the patients must be detailed and precise about all the requested services. It is unreasonable to assume patients will have the knowledge needed to provide the information for non-clinical staff to code through lots of CPT and diagnosis codes for a meaningful estimate.
AMGA encourages CMS to stop the implementation of the upcoming GFE requirement. However, the organization notes that they are not alone regarding the IDR process.
Doctors are mad about surprise billing rules.
High priced doctors and other medical providers who can’t charge a reasonable rate for their services could be put out of business when new rules against surprise medical bills occur in January.
The proposed rules represent the Biden administration’s plan to carry out the No Surprises Act, which Congress passed to limit patients from the high bills they get when one or more of their providers suddenly turn out to be outside their insurance plan’s network.
The law — protects patients from those bills, requiring providers and insurers to work out how much the doctors or hospitals should be paid, first through negotiation and then if they can’t agree, arbitration.
However, doctor groups and some medical associations have whipped out at HHS revealed interim final rules last month, saying they favour insurance firms in the arbitration phase. That’s because although the rules tell judges to take many factors into account, they are instructed to start with a benchmark largely determined by insurers: the median rate negotiated for similar services among in-network providers.
The doctor groups say that giving the insurers the upper hand will drive payment rates down and potentially force doctors out of networks or even out of business, reducing access to medical care.
But, HHS Secretary Xavier Becerra says the bottom line is protecting patients. Medical providers who have taken advantage of a complex system to charge unreasonable rates will have to bear their share of the cost or close if they can’t.
Nonetheless, Becerra says he does not expect a wave of closures or diminished access for consumers. Instead, he suggests that a competitive, market-driven process will find a balance, especially when consumers know what they are paying better.
The sticking point: How high bills are negotiated and arbitrated.
A report on surprise medical bills – the HHS was provided in advance, highlighting the impacts of negotiation and arbitration laws already in effect in 18 states.
The report, which aggregates previous research, found people getting hit with surprise bills averaging $1,219 for anesthesiologists, $2,633 for surgical assistants, $744 for childbirth and north of $24,000 for air ambulances.
In the states that use benchmarks similar to what doctors are suggesting HHS use instead of the agency’s current proposal — such as New York and New Jersey — the report found costs rising. New York, for example, has a system in which the judge chooses between the offers presented by the provider and the insurer. However, the judge is told to consider the request closest to 80% of the charges. Since providers charge is typically much higher than the actual negotiated rate, this approach risks significantly higher overall costs. In New Jersey, billed charges or regular and day-to-day rates are considered.
The Congressional Budget Office estimates the system chosen by the Biden administration is expected to push insurance premiums down by 0.5% to 1%.
While the administration chose a benchmark that physician and hospital groups don’t like, the law does specify that other factors should be considered in fixing the price for a medical procedure or service, like a provider’s experience, the market and the complexity of a case.
The interim final rules were published on Oct. 7, giving stakeholders 60 days to comment and seek changes. More than 150 members of Congress, many of them doctors, have asked HHS and other relevant federal agencies to reconsider before the law takes effect on Jan. 1. These lawmakers charge that the administration is not attaching to the spirit of the concessions Congress made in passing the law.
The HHS report also notes that the law requires extensive monthly and annual reporting to regulators and Congress, once it takes effect, to determine if the regulations are out of whack or have undesirable consequences like those the physicians are warning.
A letter of protest signed by 152 legislators
Nearly half of the 152 lawmakers who signed the letter were Democrats and many of the physicians serving in the House signed.
The lawmakers’ letter noted that the law forbids arbitrators explicitly from favouring a specific benchmark to determine what providers should be paid. Expressly excluded are the rates paid to Medicare and Medicaid, which tend to be lower than insurance firm rates, and the average rates that doctor’s bill tend to be much higher.
Mediators would be instructed to consider the median in-network rates for services as one of several factors in determining a fair payment. They would also have to view items such as a physician’s training and quality of outcomes, local market share of the parties involved where one side may have outsize leverage, the patient’s understanding and complexity of the services, and history.
But the proposed rule doesn’t instruct judges to weigh those factors equally. Instead, it requires them to start with what’s known as the qualifying payment amount, which is defined as the median rate that the insurer pays in-network providers for similar services in the area.
If a physician thinks they deserve a better rate, they can point to the other factors permitted under the law, which the medical practitioners in Congress believe is contrary to the bill they wrote.
The results, competitors of the rule argue, would be a process favouring insurers over doctors and pushing prices too low. They also say it would harm networks, especially in rural and underserved areas, because it motivates insurers to push down their pay rates to in-network providers. If the in-network rates are lower, then the default rate in arbitration is also lower.