番茄社区

In late 2021, 番茄社区 wrote about the Texas Medical Association suing the federal government over its interpretation of the No Surprises Act, a law aimed at resolving out-of-network provider payment disputes. In this report, we update readers on what has happened since then and how the act is playing out so far.

The No Surprises Act, passed by Congress in 2020, was designed to take patients out of the middle when it came to resolving disputes over billing for out-of-network care. The law aimed to get rid of the "surprise bills" that patients sometimes received when they went to an in-network healthcare facility for care, only to discover afterward that the particular provider they used was out of network, leaving them responsible for a much larger bill than they thought they'd have to cover.

While all sides agreed that the purpose of the bill was a noble one, its implementation proved to be contentious. The bill specified that patients who went to in-network facilities would only ever be responsible for paying in-network rates for services; any disputes involving out-of-network provider payments would need to be settled between providers and payers. And if the payer and provider could not agree on a payment amount, the parties could then go to an independent arbiter to settle their claim.

The Process Is Broken

The trouble, observers say, is that the dispute resolution process is already broken, less than a year after the bill's arbitration provision went into effect. "It's even difficult to figure out where to start," Jeffrey Davis, MS, director of regulatory and external affairs at the American College of Emergency Physicians, said in a phone interview. "There are issues with every stage of the dispute resolution process."

To begin with, it's not always straightforward to figure out which claims are eligible for dispute resolution. "In order for a claim to go through the federal independent dispute resolution (IDR) process, there cannot be a state law that relates to balance billing," because that state law would take precedence, Davis said. However, that's not true for employees of companies that are self-insured, because state law doesn't apply to self-insured companies' health plans, which are instead regulated by the federal government under the Employee Retirement Income Security Act (ERISA).

"Many people have no idea whether they're in an ERISA plan to begin with, so that's a problem," he said. "Health plans are supposed to be providing this information, but they're not." As a result, arbiters are spending an inordinate amount of time just figuring out whether a claim that is filed with them is eligible for the IDR process.

"It's so bad that CMS [the Centers for Medicare & Medicaid Services] that because arbiters are working so hard to make that determination ... they're increasing the arbitration fees," allowing arbiters to charge up to 40% more than they had been, said Davis. "That's making it more expensive to go to arbitration." That eligibility determination is also adding to a backlog the arbiters already face, he added; although CMS expected plans and providers to file a little more than 17,000 claims each year in total, that figure has already surpassed 90,000 in 2022, he said.

The federal government will likely keep on certifying more arbiters and eventually reduce that backlog, said Loren Adler, MS, associate director of the USC-Brookings Schaeffer Initiative for Health Policy. "Almost half the [claims] they looked at aren't eligible ... but there are some issues there because it takes the arbiter time [to figure that out] and they're not getting paid for that. I suspect they'll change the fee structure for arbiters at some point to adjust for that."

What's in a Payment Rate?

Once the arbiter has determined that a claim is eligible to be heard, the arbiter then works on determining a fair payment amount. In its original implementing regulation, CMS said arbiters must first consider the "qualifying payment amount" (QPA), which is the insurance plan's median contracted rates, to determine payment. That is, arbiters should presume first that the insurance plan's median in-network payment for a given medical service is appropriate.

That interpretation prompted the Texas Medical Association (TMA) to sue the federal government in November 2021. The TMA argued that using the QPA as a starting point "will unfairly skew IDR results in the payors' favor, granting them a windfall they were unable to obtain in the legislative process." In February 2022, a federal district court ruled in TMA's favor, prompting CMS to revise its rule (ACEP joined two other physician groups against the government, but that suit was eventually dropped, Davis said).

Under the new rule, along with the QPA, independent dispute resolution entities will consider additional information that providers submit, including the relevant history of the provider or facility -- their level of training and experience, quality and outcome measurements; the market share of the service provided; patient "acuity" or the complexity of the service; the teaching status and scope of services offered; any record of an effort to enter into a network agreement with the insurer; and the historical contracted rates with the insurer or plan.

However, said Davis, "they throw in a curveball where they say, 'We're not going to double-count certain factors that could be incorporated into QPA already'" such as acuity and complexity ... The arbiter has to consider whether any of those additional factors already are incorporated in the QPA -- the plan often says they are. That prompted the TMA to sue the federal government again in September. "The agencies have now doubled down by issuing a new final rule that replaces the earlier presumption with a new set of requirements that give health insurers the same advantage," the association . "Each of the challenged requirements in the federal agencies' final rule unlawfully tie arbitrators' hands and place an unmistakable thumb on the scale for the [health plans' QPA]."

Creative Workarounds

Hospitals, health plans, and providers are also now finding creative ways around the IDR process, Paul DeMuro, PhD, an attorney with the Austin, Texas-based law firm Nossaman LLP, told 番茄社区 in a phone interview. "I've seen situations where groups will settle with the plan, and the plan will make periodic payments that aren't part of the rates," he said. "Say it's a pathology group, and they're out of network, and the plan thinks they should pay them $100 for X [service], but the out-of-network full charge they would have paid is $300."

Through arbitration, they all agree the charge going forward should be $150, but the plan will also make a calculation and pay the pathologists periodically a certain additional amount for each procedure, say $50. But that payment "wouldn't get into whatever the qualifying payment amount was"; instead, it would be separate from it, said Munro. Another example is when a health plan would prefer that all of a particular hospital's doctors were in-network so that they can have a lower "standard rate" in the doctors' contracts, but "what they can do is, if it's a hospital-based physician contract, the health plan can pay the hospital more money and the hospital can pay a 'subsidy' or 'guarantee' to the physician group" outside of the contract, he said.

"It's like the Wizard of Oz," said Munro. "There's all these things going on behind the screen ... That's why this is so complicated" and makes it difficult to figure out what the true QPA is. He added, "We're in a situation of incredible inflation around the world and in this country. And the cost of healthcare and the fragmented nature of the health system is so bad, I don't think [the IDR process] is really going to bend the needle too much."

There are some areas of surprise billing in healthcare that aren't addressed in the law, Adler noted. "Ground ambulances and physician office laboratories are probably the two biggest gaps," he said. "Urgent care is another gap." Adler is on a committee -- set up under the No Surprises Act -- that will examine surprise billing as it applies to ground ambulances; the group, which also includes stakeholders and government agency representatives, will start meeting in January, he said.

Adler is also co-author of a soon-to-be published article discussing the price differences between ambulances owned by the public sector and those owned by private equity firms. "Most ground ambulances are public sector -- they're owned by the municipality or county," while some are owned by independent companies and others by private equity firms, he said. "So we're looking at the differences in prices between what [publicly owned ambulances] are charging and what the independent private companies, and then the handful of private equity companies, are charging in the ground ambulance market." He said he wasn't able to reveal the results of their analysis, although the article likely will be published in conjunction with the committee starting its work.

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