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.
As the healthcare industry gears up to fall under the requirements of the No Surprises Act that bans balance billing, hospitals and insurers said they need more time and information to abide by the requirements.
Payers are asking for a safe harbor until 2023 calling the Jan. 1 start day is too soon for plans to determine payment amounts to out-of-network providers and as it seeks clarification on the resolution process.
Safety net hospitals represented by America’s Essential Hospitals want implementation to be delayed until six months after the public health emergency for COVID-19 ends, saying staff and resources are spread too thin dealing with the pandemic and especially the spread of the delta variant.
HHS released the first interim final rule to implement the No Surprises Act in June — one of multiple expected to be released this year — including those from the Departments of Treasury and Labor.
A major and much-debated aspect of the law is how qualifying payment amounts — the amount paid to providers who are not in network but are providing care at an in-network facility — are calculated.
Later rules are expected to provide more detail on the key issue of how the independent dispute resolution process will be conducted.
Payers and providers both argued in their comments that without more information on that process, it is hard to prepare.
The ERISA Industry Committee, which lobbies for large employers, said that as the resolution process is developed, deviation from QPAs “should be limited to extenuating circumstances.” That’s in direct contrast to the American Hospital Association, which requested the department not overly weigh the QPA as a factor in consideration.
When Congress debated a ban on surprise billing, whether a dispute resolution process would be used or whether rates for out-of-network providers would be based on a set rate was perhaps the most hotly contested aspect. In the end, providers got the win with the arbitration clause.
In comments on the rule, both AHA and payer lobby AHIP called for a multi-stakeholder group to advise on issues such as what provisions fall under state and federal jurisdiction and other operational challenges.
The hospital lobby requested clarification on a number of aspects of the rule, such as how good faith estimates of costs should be calculated on consent forms patients may sign to waive balance billing protections and when a provider can bill a patient if their claim is denied by the plan.
In multiple instances, the group asked the department to confirm that the initial payment should not be the QPA unless both the plan and provider agree to that circumstance.
The country’s largest hospital lobby is also concerned that the act won’t do enough to ensure network adequacy from insurers and will not institute enough oversight on plans’ compliance.
AHA said it is “deeply concerned that the existing oversight mechanisms are insufficient to monitor plan and issuer behavior and a more robust structure is needed to enforce the QPA requirements.”
The Federation of American Hospitals expressed similar concerns, particular regarding “abusive plan practices” like inappropriate claims denials and downcoding. The group urged the departments “to expand their oversight of plans and issuers to prevent and address unlawful and abusive plan practices.”
AEH, meanwhile, asked for assurances that administrative burdens like the notice and consent documentation would be fairly split with insurers.
Under the rule, the QPA is to be decided by a plan’s median in-network contracted rate for a geographic area. It must have a minimum of three contracted rates to use this method. If that is not available, the payer can use an independent claims database.
FAH, in particular, asked that the rule strengthen conflict of interest regulations for these databases and have their eligibility determined by the departments instead of the insurers themselves.
AHIP’s most immediate concern is the timeline for implementation. It asked for the good faith safe harbor request to develop QPA methodologies, create the infrastructure to transmit notice and consent forms with providers and for it to receive the forthcoming information on the arbitration process.
“Health plans and issuers have responsibility for developing work streams; updating information technology; creating forms, notices, and other communications; training employees; and other operational measures necessary to effectuate obligations” in the rule, the group wrote.
From the largest global meat producer to a major gas pipeline company, cyberattacks have been on the rise everywhere—and with copious amounts of valuable patient data, healthcare organizations have become a prime target.
The graphic above outlines the recent wave of data attacks plaguing the sector. Healthcare data breaches reached an all-time high in 2020, and hacking is now the most common type of breach, tripling from 2018 to 2020. This year is already on pace to break last year’s record, with nearly a third more data breaches during the first half of the year, compared to the same period last year.
Recovering from ransomware attacks is expensive for any business, but healthcare organizations have the highest average recovery costs, driven by the “life and death” nature of healthcare data, and need to quickly restore patient records. A single healthcare record can command up to $250 on the black market, 50 times as much as a credit card, the next highest-value record. Healthcare organizations are also slower to identify and contain data breaches, further driving up recovery costs.
A new report from Fitch Ratings finds cyberattacks may soon threaten hospitals’ bottom lines, especially if they affect a hospital’s ability to bill patients when systems become locked or financial records are compromised. The rise in healthcare hacking is shining a light on many health systems’ lax cybersecurity systems, and use of outdated technology.
And as virtual delivery solutions expand, health systems must double down on performing continuous risk assessments to keep valuable data assets safe and avoid disruptions to care delivery.
A Cleveland Clinic-owned hospital system in Akron, Ohio, is paying the federal government $21.3 million to settle claims it illegally billed the Medicare program.
Akron General Health System allegedly overpaid physicians well above market value for referring physicians to the system, violating the Anti-Kickback Statute and Physician Self-Referral Law, and then billed Medicare for the improperly referred business, violating the False Claims Act, between August 2010 and March 2016.
Along with an AGHS whistleblower,the Cleveland Clinic Foundation, which acquired the system at the end of 2015, voluntarily disclosed to the federal government its concerns with the compensation arrangements, which were enacted by AGHS’ prior leadership, the Department of Justice said Friday.
The Anti-Kickback Statute forbids providers from paying for or otherwise soliciting other parties to get them to refer patients covered by federal programs like Medicare, while the Physician Self-Referral Law, otherwise known as the Stark Law, prohibits a hospital from billing for those services.Despite the laws and a bevy of other regulations resulting in a barrage of DOJ lawsuits and been a thorn in the side of providers for decades, fraud is still rampant in healthcare.
“Physicians must make referrals and other medical decisions based on what is best for patients, not to serve profit-boosting business arrangements,” HHS Office of Inspector General Special Agent in Charge Lamont Pugh said in a statement on the AGHS settlement.
Cleveland Clinic struck a deal with AGHS in 2014, agreeing to pay $100 million for minority ownership in the system. The agreement gave the clinic the option to fully acquire AGHS after a year, which it exercised as soon as that period expired in August 2015.
The settlement stems from a whistleblower suit brought by AGHS’s former Director of Internal Audit Beverly Brouse, who will receive a portion of the settlement, the DOJ said. The False Claims Act allows whistleblowers to share in the proceeds of a suit.
As fraud has increased in healthcare over the past decade — the DOJ reported 247 new matters for potential investigation in 2000, 427 in 2010 and 505 in 2019 — the federal government has renewed its efforts to crack down on illegal schemes. That’s resulted in the formation of groups like the Medicare Fraud Strike Force in 2007 and the Opioid Fraud and Abuse Detection Unit in 2017, which has in turn resulted in the DOJ recovering huge sums in stings, settlements and guilty verdicts.
Some of the biggest settlements reach into the hundreds of millions, and involve billions in false claims.
In 2018, DOJ charged more than 600 people for falsely billing federal programs more than $2 billion; last year federal agencies charged almost 350 people for submitting more than $6 billion in false claims. That last case led to creation of a rapid response strike force to investigate fraud involving major providers in multiple geographies.
Other large settlements include Walgreens’ $270 million fine in 2019 to settle lawsuits accusing the pharmacy giant of improperly billing Medicare and Medicaid for drug reimbursements; hospital operator UHS’ $122 million settlement last summer finalizing a fraudulent billing case with the DOJ after being accused of fraudulently billing Medicare and Medicaid for services at its behavioral healthcare facilities; and West Virginia’s oldest hospital, nonprofit Wheeling Hospital, agreeing in September to pay $50 million to settle allegations it systematically violated the laws against physician kickbacks, improper referrals and false billing.
EHR vendor eClinicalWorks paid $155 million to settle False Claims Act allegations around misrepresentation of software capabilities in 2017, while Florida-based EHR vendor Greenway Health was hit with a $57.3 million fine in 2019 to to settle allegations the vendor caused users to submit false claims to the EHR Incentives Program.
This week, the Supreme Court declined to hear an appeal challenging Medicare’s 2019 regulation calling for “site-neutral payment” for services provided by hospitals in outpatient settings, clearing the way for the rule’s implementation. The appeal was filed by the American Hospital Association (AHA), along with numerous hospitals and health systems, after a lower court ruling last year upheld the change to Medicare’s reimbursement policies.
The rule aims to level the playing field betweenindependent providers and hospital-owned clinics by curtailing hospitals’ ability to charge higher “facility fees” for services provided in locations they own. Site-neutral payment has been a longstanding target of criticism by health economists and policymakers, who cite the pricing advantage as a driver of consolidation in the industry, which has tended to push the cost of care upward.
The AHA expressed disappointment in the Court’s decision not to hear the appeal,saying that the changes to payment policy “directly undercut the clear intent of Congress to protect them because of the many real and crucial differences between them and other sites of care.” The primary difference, of course, is hospitals’ need to fully allocate their costs across all the services they bill for, making care in lower-acuity settings more expensive than similar care delivered by practices that don’t have to subsidize inpatient hospitals and other costly assets.
Over the years that legitimate business need has turned into adeliberate business model—purchasing independent practices in order to take advantage of higher hospital pricing. As Medicare looks to manage Baby Boomer-driven cost growth, and employers and consumers grapple with rising health spending, expect increasingly rigorous efforts to push back against these kinds of pricing strategies.
A California hospital was properly dismissed from a lawsuit alleging it violated state consumer protection laws by failing to disclose emergency room visit fees before treatment, a state appellate court ruled June 29.
Joshua Yebba filed the lawsuit against AHMC Anaheim (Calif.) Regional Medical Center, alleging the hospital violated California’s Unfair Competition Law and Consumer Legal Remedies Act when it did not disclose a separate fee for an emergency room visit before treating him. Mr. Yebba claimed he would have gone to a different ER if he knew about the fee. He sued on behalf of himself and others who allegedly were charged the separate ER fee without knowing about it.
The lawsuit centered on whether the hospital had a duty to disclose the ER fee to patients before treating them and whether the hospital violated the consumer protection laws by not disclosing them.
The hospital argued that it fulfilled any duty to disclose the fee because it has a written or electronic copy of its chargemaster available. However, Mr. Yebba contended that Anaheim Regional had a duty to tell him personally while checking in or to at least post a sign about the fees in the ER.
A lower court dismissed the case against the hospital on the grounds that Anaheim Regional had no duty to disclose the separate ER fee to Mr. Yebba before treating him and that the allegations didn’t violate the consumer protection acts.
The California Court of Appeals 4th District affirmed the dismissal, saying that California lawmakers have determined what pricing information hospitals must disclose to patients and when, and a court decision increasing the requirements “upsets the legislative balance between the consumers’ right to information and the hospitals’ burden of providing it.”
Ballad Health, a not-for-profit health system operating in Virginia and Tennessee, announced this week that it had reached an agreement with RIP Medical Debt, a charity that uses donations to relieve debt created by healthcare bills, to pay off $287M of outstanding debt owed by its patients.
According to a report in the Wall Street Journal, the purchase will eliminate the debt of 82,000 low-income patients, many of whom qualified for Ballad’s charity care program but did not take advantage of it. The terms of the purchase were not disclosed, but RIP Medical Debt, which says it has relieved over $4.5B in medical debt nationally, typically pays between one and 1.25 percent of the owed amount for recent debt, and as little as 0.03 percent for older debt. That’s similar to what typical debt-purchasing businesses pay. But unlike those businesses, however, RIP Medical Debt says its debt eradication service has no tax consequences for recipients, effectively wiping away large sums that patients might have owed for years.
Since its creation as the result of a 2018 merger, Ballad has faced a mandate to increase the financial aid it provides to low-income patients, but has still come under criticism for aggressive collection practices, including the use of lawsuits against patients who owe the system. The deal with RIP Medical Debt is intended to reduce the amount of debt outstanding—as Ballad CEO Alan Levine told the Journal, “We’re wiping the slate clean.”
As a recent analysis by Axios and Johns Hopkins University showed,most nonprofit hospital systems have tried to reduce aggressive collections in recent years, with just 10 hospitals accounting for 97 percent of court actions against patients between 2018 and 2020. While it’s shocking to hear of a private charity having to step in to relieve patients of crippling medical debt in our nation’s $3.6T healthcare industry, absent larger structural solutions to the broken reimbursement system, it’s at least heartening to know that such services are available. But it’s a Band-Aid solution—more radical treatment remains undelivered.