Biden Administration Releases Final Surprise Billing Rules

 The Biden Administration has released final surprise billing rules implementing the No Surprises Act, a federal law enacted in January 2021 that protects patients from out-of-network medical bills when they seek care at in-network facilities.

The new surprise billing rules detail the process for payers and providers to settle on payment for those out-of-network services. Previously, payers and providers would submit payment rates to an independent arbiter, selected by the government. The arbiter would choose the rate closest to the area’s median in-network payment for the services, otherwise known as the qualifying payment amount (QPA), while considering other factors, such as provider training and experience, the provider’s market share, and how difficult it was to provide the service, after the fact.

Provider groups have criticized the use of the QPA as the primary factor in an arbiter’s decision, arguing that the added weight to the QPA amount favors payers over providers.

Notably, the Texas Medical Association challenged the surprise billing arbitration process over the QPA issue and won. A district court vacated the requirement that arbiters select payment offers closest to the QPA unless the additional information warrants a closer review.

The American Hospital Association (AHA) and the American Medical Association (AMA) have also filed a lawsuit challenging the interim final rule implementing the dispute process, arguing that lawmakers did not intend for rules implementing the No Surprises Act to place that much emphasis on the QPA. The lawsuit is ongoing.

In light of the district court’s decision, the latest final surprise billing rules roll back the “rebuttable presumption” that favors the QPA. The rules state that arbiters are to consider the QPA “and then must consider all additional information submitted by a party to determine which offer best reflects the appropriate out-of-network rate.”

The final rules specify that arbiters “should select the offer that best represents the value of the item or service under dispute after considering the QPA and all permissible information submitted by the parties.”

The final rules also cover situations where payers have “downcoded” a claim. According to previous rulemaking, downcoding occurs when payers change service codes or change, add, or remove a modifier, which can lower the QPA for the service code or modifier billed by a provider.

The rules will create new requirements related to what information payers must share with providers when downcoding occurs. The information includes a statement that the service code or modifier was downcoded, an explanation of why the claim was downcoded, and the amount that would have been the QPA had the service code or modifier not been downcoded.

The Biden Administration—through the Departments of Labor, Health and Human Services, and Treasury, which officially released the final surprise billing rules—said that the rules “will help providers, facilities and air ambulance providers engage in more meaningful open negotiations with plans and issuers and will help inform the offers they submit to certified independent entities to resolve claim disputes.”

But whether the updated language is enough to tip the balance for providers remains to be seen. AHA said in a news release late last week that it is closely reviewing the final surprise billing rules.

New York judge dismisses surgeon’s lawsuit challenging surprise billing law

A New York federal judge on Wednesday dismissed a surgeon’s legal challenge that sought to roll back key pieces of a federal law that protects patients from surprise out-of-network bills.

Judge Ann Donnelly ruled against the surgeon, finding that the law is constitutional, and dismissed the case for lack of standing and dismissed the surgeon’s request for a preliminary injunction.

Katie Keith, a lawyer and health policy expert at Georgetown University who tracks surprise billing litigation, called the ruling good news for consumers.

The lawsuit threatened to once again expose millions of patients to surprise out-of-network bills, Keith previously said in a Health Affairs report on the litigation.

Daniel Haller, a surgeon, and his private practice filed suit in December against federal regulators alleging that the ban on surprise billing was unconstitutional along with the independent dispute resolution process, the way in which providers and payers are supposed to resolve payment disagreements.

Haller said the law deprives physicians the right to be paid a reasonable value for their services, according to the complaint.

Under the law, physicians and insurers can enter into an independent dispute resolution process to come to an agreement on the payment for services. The process was intended to keep patients out of the middle of these payment disputes.

Haller argued the process favored insurers — not providers.

However, a key part of that process was struck down by a Texas judge, who ruled in favor of providers in February.

Donnelly said Haller and his team did not show that they even went through the arbitration, or IDR, process, “much less that the IDR process resulted in a payment amount below the reasonable value,” according to Wednesday’s opinion.

“At the time of oral argument — almost six months after the Act went into effect — the plaintiffs could not say whether they had participated in the IDR process. They do not allege that the IDR process has caused any concrete harm, so their claims of constitutional injury are speculative,” Donnelly said.

Haller’s practice, Long Island Surgical, and its team of six physicians perform procedures on patients who are admitted after an emergency department visit.

Almost 80% of Long Island Surgical’s patients have an insurance plan that does not have a contractual relationship with the surgical group. In other words, Haller and his colleagues are almost always out-of-network, potentially putting patients at risk of a surprise medical bill.

The No Surprises Act tried to solve this problem, and it bans surprise billing in most cases.

The law aimed to tackle one of the most frustrating issues in healthcare, which could ensnare even savvy patients. Patients could be unknowingly treated by out-of-network providers, and then get bills their insurers refused to pay in full or part, leaving them stuck to pay the remaining balance.

No Surprises Act implementation includes telehealth

https://www.healthcarefinancenews.com/news/no-surprises-act-implementation-includes-telehealth

Independent physician groups, which include telehealth docs, must now accept a rate that someone else has negotiated, expert says. 

The No Surprises Act has providers scrambling to understand the implications of a law that went into effect earlier this month.

Under the law, patients treated by an out-of-network physician can only be billed at the in-network rate. It protects patients from receiving surprise medical bills from the ER or air ambulance providers or for non-emergency services from out-of-network physicians at in-network facilities.

Patients can no longer receive balance bills – the difference between what the provider charges and what the insurer pays – or be charged a larger cost-sharing amount.

The congressional intent was to save patients sometimes thousands of dollars in unexpected, or surprise, medical bills. But applying the No Surprises Act to clinical care is being left to providers to sort out. 

A big question is the definition of an emergency and the benchmark used to determine when it ends, according to Kyle Faget, a partner at Foley who is co-chair of the firm’s Health Care and Life Sciences Practice Groups. She asked: Does the emergency end when the patient is stabilized, or should another standard apply? This includes emergency services for mental health and substance-use disorders.

Another question is around pre-planned services. Patients have to be notified who is providing the care and whether the physician is in-network. If the physician is out-of-network, patients must provide consent. But that can be tricky, for instance, if a patient scheduled for a planned C-section gets an out-of-network doctor who was not scheduled at the time the appointment was made.

At some hospitals, a new layer of administration is needed to comply with the law, Faget said.

Another area not well understood is how the law affects telehealth consults in the ER.

TELEHEALTH AND THE NO SURPRISES ACT

The law states that if treated by a telehealth clinician, the patient can only be billed the in-network rate, said Faget, who specializes in telehealth law.

Telehealth is often used in the ER, according to Faget. Most ER visits require a physician consultation, with hands-on medical care provided by a clinician other than the physician.

Pre-COVID-19, providers were in the embryonic stage of providing virtual emergency care, she said. The pandemic, and a shortage of physicians, spurred virtual care in the ER. 

These telehealth providers often work on a contracted basis. They are likely credentialed at the hospital but are not hospital employees, Faget said.

This means they are not credentialed with the insurer. Under the No Surprises Act, they are now subject to the in-network rates negotiated by the hospital. 

Telehealth ER physicians could negotiate their own contracts with insurers, but as a small group, they are not likely to get the higher rates they had prior to the implementation of the No Surprises Act.

“It’s an arduous contracting process, and small-group bargaining power is low,” Faget said. “The big hospital system has bargaining power. Those groups providing telehealth services won’t necessarily have agreements in place and, by definition, are out-of-network.”

Independent physician groups, which include telehealth docs, must now accept a rate that someone else has negotiated, Faget said. This fact can be more of an issue than the lower rate they’re now being paid, she said.

“I think telehealth will adapt,” Faget said. “I think it will become the way of doing business.”

WHY THIS MATTERS

The bottom line is that the No Surprises Act is doing what it promised to do – saving patients from getting a large bill not covered by insurance.

Surprise bills are a moral and ethical issue, Faget said. Patients, at their most vulnerable in the ER, are sent home only to get a $5,000 bill they never saw coming.

“It’s like kicking a person when they’re down,” Faget said.

However, in the larger healthcare ecosystem, ending surprise medical bills will ultimately result in cost-shifting, she said. 

“Think about the system globally: somebody is paying for something somewhere,” Faget said. “At the end of the day, somebody’s going to have to pay.”

THE LARGER TREND

Providers have told her that the No Surprises Act incentivizes insurance companies to lower their payments, Faget said.

The American Society of Anesthesiologists has accused BlueCross BlueShield of North Carolina of doing this. A letter sent by BCBS of North Carolina to anesthesiology and other physician practices this past November threatens to terminate physicians’ in-network status unless they agree to payment reductions ranging from 10% to over 30%, according to ASA. 

The ASA saw this as proof of its prognostication to Congress upon passage of the No Surprises Act: that insurers would use loopholes in the law to leverage their market power.

The AHA and AMA have sued the Department of Health and Human Services  over implementation of a dispute-resolution process in the law they say favors the insurer. The arbitrator must select the offer closest to the qualifying payment amount. Under the rule, this amount is set by the insurer, giving the payer an unfair advantage, according to the lawsuit. 

Air Ambulance Costs Are Soaring

Air ambulance transport costs have skyrocketed in recent years, according to a new report from FAIR Health.

Notably, the average estimated in-network allowed amount for air ambulance transport increased 76.4%, from $8,855 in 2017 to $15,624 in 2020.

The jump was part of a general rise in costs for both airplane and helicopter air ambulance transport during this time period, FAIR Health said, which included increases in charge amounts (the amount charged to a patient who is uninsured or obtaining an out-of-network service), estimated in-network allowed amounts for privately insured patients (the total fee negotiated between an insurance plan and a provider for an in-network service), and Medicare reimbursement amounts.

The average charges associated with a fixed-wing air ambulance rose 27.6%, from $19,210 in 2017 to $24,507 in 2020, according to the report, and the average Medicare reimbursement amount increased by 4.7%, from $3,071 to $3,216.

For helicopter transport, the average charges associated with a rotary-wing air ambulance rose 22.2%, from $24,924 in 2017 to $30,446 in 2020. The average estimated in-network allowed amount increased 60.8%, from $11,608 to $18,668, and the average Medicare reimbursement amount again rose 4.7%, from $3,570 to $3,739.

Air ambulance services have been the subject of substantial policy focus,” said Robin Gelburd, president of FAIR Health, in a statement. “We hope that this study of air ambulance transport proves productive to policy makers, researchers, payors, providers, and consumers seeking to better understand this corner of the healthcare system.”

FAIR Health’s report also found that air ambulance claims increased 30% from 2016 to 2020 (0.7% to 0.9%) as a percentage of all ambulance (ground and air) claims.

In 2020, the most common diagnoses associated with fixed-wing air ambulance transport were chronic respiratory diseases, including chronic obstructive pulmonary disease and chronic respiratory failure, and the second most common was COVID-19, which accounted for 7% of fixed-wing air ambulance claims.

Because air ambulance transport is often used for patients in life-threatening situations, they generally have no control over type of transport or provider used, FAIR Health said. As a result, surprise bills occur frequently.

A number of states have made efforts to regulate air ambulance charges, but these attempts have been overturned by court rulings that state that such efforts are preempted by the Airline Deregulation Act of 1978, the report noted.

However, the federal No Surprises Act, signed into law in December 2020, contained provisions to protect consumers from surprise bills, including those from out-of-network air ambulance service providers.

On September 30, HHS held a press call on one of its surprise billing rules, which would require companies to give patients “good faith estimates” of charges upfront and to submit a dispute resolution for out-of-network surprise bills.

Asked by MedPage Today whether air ambulances would be included, a senior administration official responded, “Yes, air ambulances are covered by this rule. They will go through a very, very similar independent dispute resolution process [as other providers]. I think the only thing different about the air ambulance process is the list of allowable information that the parties can bring to be considered in addition to the qualifying amount.”

Setting the rules for settling “surprise bills”

https://mailchi.mp/a2cd96a48c9b/the-weekly-gist-october-1-2021?e=d1e747d2d8

Surprise Medical Bills: New Protections for Consumers Take Effect in 2022 |  KFF

On Thursday the Department of Health and Human Services (HHS), along with other federal agencies, released the long-awaited second half of its proposed regulations implementing the No Surprises Act, passed by Congress at the end of last year, which bans “surprise billing” of patients who unsuspectingly receive care from out-of-network providers.

The interim final rule, which will take effect on January 1st after a comment and review period, lays out a process for addressing disputed patient bills, first through a 30-day “open negotiation” between the patient’s insurer and the out-of-network provider, and then through a federally-managed arbitration process.

Of most interest to insurers and providers who have lobbied fiercely for months to ensure a favorable interpretation of the law, the new regulation specifies that the outsider arbitrator, to be agreed upon by both parties, must begin with the presumption that the median in-network rate for services in the local market is the correct one. The arbitrator can then modify that price based on the specific circumstances of the case.

That method was broadly favored by insurers, and AHIP strongly endorsed the proposed approach, saying in a press release that “this is the right approach to encourage hospitals, healthcare providers, and health insurance providers to work together and negotiate in good faith.” Predictably, the hospital lobby felt otherwise; the American Hospital Association reacted by calling the rule “a windfall for insurers”, saying that it “unfairly favors insurers to the detriment of hospitals and physicians who actually care for patients.” 

The ultimate winners here are patients, who will gain important new protections against the potentially crippling financial implications of surprise billing. We’d agree with HHS Secretary Xavier Becerra, who told the New York Times that the new rule would “[take] patients out of the middle of the food fight,” and provide “a clear road map on how you can resolve that food fight between the provider and the insurer.” It’s about time. 

Still unresolved: the high cost of out-of-network ambulance services, left out of the No Surprises Act altogether. Let’s hope Congress circles back to address that issue soon.