Surprise billing rule angers providers over insurer-friendly policies

Providers are crying foul over a Biden administration settlement that sets out the process they can use to settle out-of-network billing disputes with payers.

The rule, released Thursday by the Centers for Medicare and Medicaid Services, is the next step in its implementation of the surprise billing ban passed by Congress last year.

Payers hailed the regulation as the “right approach”, while providers were quick to denounce it as a “mistake” arbitrarily favoring insurers. At issue is the part of the regulations that defines the independent dispute resolution process used in the event of a disagreement between providers and payers over the fair price of an out-of-network service.

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In the IDR process, the insurer and provider tell an arbitrator what they think is the appropriate rate for an out-of-network service. CMS directs the arbitrator to assume that the “eligible payment amount”, which is usually an insurer’s median contracted rate for the same service in a geographic area, is the “appropriate” rate and to choose the highest offer. closer to that.

In the minds of providers, this gives too much weight to insurers.

“It goes far beyond protecting patients. It protects insurance companies and lends paramount credibility to their perspective and their data,” said Chip Kahn, CEO of the Federation of American Hospitals. The FHA is a trade group that represents for-profit hospitals.

For the arbitrator to deviate from the offer closest to the QPA, a supplier must “clearly demonstrate” why the value is “materially different”. Arbitrators are also permitted to consider certain information submitted by providers, including patient acuity and a provider’s level of experience.

But Kahn said he interprets the law to mean that all of these factors should be considered equally and that there should be no “presumption” that the QPA is the appropriate amount, especially since it is based on the data of the insurer.

The median rate is just a starting point to begin deliberations, said Kevin Lucia, a research professor at Georgetown University’s Center for Health Insurance Reforms. He pointed out that the provider and insurer can submit more information to the arbitrator to try to change what is ultimately paid.

“It is possible to be deflected from the amount of the qualified payment – above and below – if the information presented is convincing,” said Lucia.

The rule discourages insurers and providers from entering into contracts with each other because providers would ultimately get contracted rates paid even if they remained out of the network, said group partner Amanda Hayes-Kibreab. King & Spalding Healthcare and Life Sciences. The benefits of contracts go beyond tariffs, she said. Suppliers get assured and timely payments and an agreed dispute resolution process.

According to Claire Ernst, director of government affairs for the Medical Group Management Association, the regulations place a burden on providers because the presumption is that the QPA is the fair rate and providers must prove otherwise.

“We are concerned that this will disadvantage practices in the process and create difficulties,” she said, saying the APQ does not reflect costs because all contracts are different.

The rule prohibits the use of billed fees or providers’ out-of-network fees in arbitration, reducing the likelihood of the law unsurprisingly inflating the cost of services, Lucia said. States like Texas, Florida, and New York have surprise billing laws that rely on billing fees or usual and customary rates, which ultimately drives up costs and, if insurers pay closer to fees charged, premiums, he said.

“What we saw in this settlement was what Congress intended,” Lucia said. “They didn’t want the downstream impact of higher prices and higher premiums. The way they did it was in line with that vision.”

Some health policy researchers have resisted portraying the news as good for insurers and bad for providers. Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy, said insurers would have passed on any cost increases to members anyway, so they are only marginally affected by the outcome.

The real winners are consumers, patients and employers, who will be protected from surprise bills now that 100% of emergency care is treated as in-network, Adler said.

“There’s a really nice peace of mind that all consumers can take here, that’s a big win no matter where the costs end up in the system,” he said.

Meanwhile, insurers have applauded the interim final rule as the correct interpretation of the law that will protect patients.

“We commend the administration for protecting patients and employing an independent resolution process focused on affordability,” said Justine Handelman, senior vice president of the Blue Cross Office of Policy and Advocacy. Blue Shield Association, in a statement.

It’s the next chapter in the saga of surprise medical bills, which has been a two-year long fight on both sides of the Capitol Hill aisle.

As Congress tried to find a solution to balance billing that kept patients harmless in situations beyond their control, providers and insurers argued over how much insurers should pay for out-of-network charges.

Providers fought hard against a “benchmark” approach favored by insurers that would essentially allow the federal government to determine prices for certain out-of-network services.

Legislation passed in December allowed an independent arbitrator to settle disputes between payers and providers, a solution that appeared to appease all sides of the debate.

By law, providers cannot bill patients for out-of-network emergency services or non-emergency services performed by an out-of-network physician at an in-network facility. HHS released rules implementing this part of the law earlier this summer with a Jan. 1 start date.

If an insurer and provider cannot reach an agreement on how much the insurer should pay for this service within 30 days, they can enter the independent dispute resolution process as set out in the settlement by CMS on Thursday. .

While vendor groups said the rule “misinterprets” Congressional intent, it was hailed by two Democratic leaders who helped draft the legislation.

“Today’s rule implements the law with no surprises as we expected and is an important new protection for families across the country that will save countless patients from having to foot the medical bill. care that they thought was covered by their insurance,” said Senator Patty. Murray (D-Wash.), chairman of the Senate Health Committee and Rep. Frank Pallone (DN.J.), chairman of the House Energy and Commerce Committee.

Meanwhile, some doctors in Congress, who know all too well the impacts of regulation on physician payment, are unhappy.

“HHS’s second rule on surprise billing is a disaster for patient access,” Rep. Brad Wenstrup (R-Ohio), chair of the GOP Doctors Caucus, said Friday. “Congress was very clear that we did not intend to create a de facto benchmark for negotiations when creating the arbitration process in the historic, bipartisan No Surprises Act…Unfortunately, this rule does not meet our intent.”

He argued that the rule would discourage insurance companies from keeping providers in their networks.

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