The Biden administration’s first rule implementing a landmark 2020 law aimed at protecting patients against high hospital and doctor bills in emergencies and other situations will lower costs for patients, a group that represents large employers said.
But hospitals are worried the No Surprises Act’s rules won’t get at the real problem driving surprise billing—inadequate health-care networks—and they also say the law’s implementation date—Jan. 1, 2022—is too soon to get procedures into place.
The way the interim final rule (RIN 0938-AU63) for the law, published July 13, defines how the qualifying payment amount is calculated is the basis on which a patient’s share of a bill is calculated.
The amount will be based on rates averaged at the contract level, lowering lower costs for patients, the ERISA Industry Committee (ERIC) said this month in a comment letter. ERIC represents large employers’ interests as sponsors of employee benefit plans.
Employer groups, which cover about 150 million Americans, were generally happy with the first rule the Health and Human Services Department issued to implement the law that passed as part of appropriations legislation (H.R. 133) in December 2020. But the most important rule, determining how rate disputes between health plans and health-care providers are to be settled, isn’t due until Dec. 27.
The interim final rule was issued by the HHS, the departments of Labor and Treasury, and the Office of Personnel Management.
ERIC warned that billing disputes shouldn’t be used as chances to ramp up costs.
Under the law, doctors and hospitals are barred from billing patients more than they would pay for in-network care in emergencies and when patients receive treatment from out-of-network providers at in-network facilities.
If a billing dispute between health-care providers and payers goes to arbitration, ERIC said, the qualifying payment amount should be the primary consideration for arbitrators when determining final payment for out-of-network care.
The independent dispute resolution process (IDR) for resolving disputed bills should not become “an opportunity for inflating costs,” ERIC said.
“Rampant misuse of the IDR process in states such as New York, Texas, and New Jersey, shows how bad actors take advantage of the IDR process to bolster bottom lines at the patients’ expense,” it said.
Hospitals, meanwhile, are concerned that the law’s rules won’t do enough to ensure the adequacy of health-care networks—central to avoiding out-of-network billing in the first place.
Provider networks could be disrupted “if plans and issuers are able to pay less for services under the provisions of the No Surprises Act than by contracting at commercially reasonable rates with providers and facilities,” the American Hospital Association said in a letter to top officials at OPM, the IRS, and the departments of HHS, Labor, and Treasury.
Already, gaps in network adequacy standards have contributed to plans and insurers excluding providers from networks, pushing costs onto patients and making it harder to access and coordinate care, the AHA said.
Large, self-insured employer-sponsored health plans regulated under the Employee Retirement Income Security Act (ERISA) already aren’t subject to network adequacy rules, and requirements for fully insured health plans sold directly by insurers often don’t address some providers, such as anesthesiologists, radiologists, and laboratories, the AHA argued.
Those groups are often the groups that have been sending surprise bills to patients for out-of-network services—even when a procedure is held at an in-network facility.
Such risks “will continue to exist even once the No Surprises Act provisions go into effect,” the AHA wrote.
“The law does not address every instance of out-of-network care, nor does it address instances where plans or issuers label a provider as `in-network’ but then fail to cover medically-necessary services delivered by that provider, a form of network inadequacy not fully accounted for in existing rules,” it said.
Others point to concerns about applying the new law’s rules, no matter how far they do or don’t go.
“It’s going to be an operational nightmare” given differing laws in many states” that address surprise billing, Isabel Bonilla-Mathe, an associate with Phelps Dunbar LLP, said in an interview. Bonilla-Mathe represents hospitals and individual health-care practitioners.
The implementation deadline will be difficult to meet, Bonilla-Mathe said. The major rule that specifies how billing disputes will be resolved isn’t due until the end of this year, and it isn’t clear how that rule will work with the interim final rule, she said.
Time is also needed to educate staff and set up patient communications about bills that are required by the law, Bonilla-Mathe said.
Hospitals are concerned about how the qualifying payment amount is calculated, Amanda Hayes-Kibreab, a partner at King Spalding who represents hospitals and providers, said in an interview.
Part of the concern is “what contracts are being used for the median calculation” that arbitrators must use to settle disputes, Hayes-Kibreab said. The departments have focused on network agreements, she said.
“There are a lot of agreements that might have rates for services that are not necessarily network agreements, and how might those be used,” she said. “There’s some more clarity that’s needed there.”
Those can include agreements between providers and payers that may cover a single service or emergency services not in the insurers’ networks, Hayes-Kibreab said.