Surprise billing interim final rule gets mixed reaction from industry

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The Biden Administration released an interim final rule on surprise medical billing this week, and it's getting a mixed reaction among players in the industry. 

"Today's rule is a windfall for insurers," the American Hospital Association said by statement. "The rule unfairly favors insurers to the detriment of hospitals and physicians who actually care for patients. These consumer protections need to be implemented in the right way, and this misses the mark."

While the No Surprises Act has protections that are strongly supported by hospitals and health systems, the interim final rule "has moved away from Congressional intent" and floats proposals that Congress had rejected, the AHA said.
Meanwhile, AHIP, which represents insurers, struck a different tone, saying the independent dispute resolution process in the interim final rule should encourage more providers to join health plan networks.

AHIP CEO and president Matt Eyles said, "The Administration's approach signals a strong commitment to consumer affordability and lower healthcare spending through an independent dispute resolution process that should encourage more providers to join health plan networks.

"We are particularly encouraged to see the rules conform to the intent of the No Surprises Act and direct that arbitration awards must begin with a presumption that the appropriate out-of-network reimbursement is the qualified payment amount. This is the right approach to encourage hospitals, healthcare providers, and health insurance providers to work together and negotiate in good faith."

The Blue Cross Blue Shield Association called it a "win for patients" and a step toward a more affordable and equitable health system.

"We commend the administration for protecting patients and using an independent resolution process that focuses on affordability," said Justine Handelman, BCBSA senior vice president of the Office of Policy and Representation. "This was Congress's intent, and we will continue to work with Congress and the administration to create a more transparent, affordable and equitable health system." 

The interim final rule, announced Thursday, introduces a dispute resolution process for self-pay patients and the uninsured, as well as protections in the external review process so that individuals with job-based or individual health plans can dispute denied payment for certain claims.

It's meant to be a part of the No Surprises Act, a bipartisan consumer protection law, which the administration directed the Department of Health and Human Services to prioritize and implement as part of the Executive Order on Promoting Competition in the American Economy.

The final rule also drew positive reaction from the Coalition Against Surprise Medical Billing, though the organization said it is still reviewing the details. In particular, CASMB said the rules reinforce the statute that calls for the qualifying payment amount to be the primary and overriding consideration for final payment determinations as part of the independent dispute resolution (IDR) process.

"For patients to be protected from abuse and misuse of IDR and to achieve the full cost-savings projected by the Congressional Budget Office, it is essential that the final rules maintain limits on arbitration," the organization wrote in a statement. "We look forward to working with the Administration and Congress to ensure that millions of Americans are safeguarded from surprise medical bills and out-of-network charges moving forward."

CASMB had sent a letter to the U.S. Department of Labor in July saying that IDR should be limited, and only used as a last resort for payment disputes, saying that in cases where the arbitration process is more expansive in scope and reach, as in New York, "consumers have faced significantly higher costs as a result of out-of-network providers misusing the system to achieve higher reimbursement."

The organization also said that the IDR process should not be used to address clinical, coverage or plan administration denials, and that its outcomes should not serve as precedent. CASMB added that IDR rules should prevent the automation of disputes, while allowing limited, efficient "batching" of claims to minimize administrative costs and prevent misuse of the process.

WHAT'S THE IMPACT?

The Departments of Health and Human Services, Labor, Treasury and the Office of Personnel Management will certify independent dispute resolution entities to conduct payment determinations on a rolling basis. Entities interested in becoming certified by January 1, 2022 can submit their applications by November 1.

The departments are also releasing the Calendar Year 2022 Fee Guidance for the Federal Independent Dispute Resolution Process Under the No Surprises Act. The guidance provides the allowable fees certified independent dispute resolution entities will be able to charge in 2022, as well as the administrative fee that parties to a dispute must pay to access the process.

THE LARGER TREND

Congress passed the No Surprises Act in December 2020, which prohibits most surprise out-of-network billing for plan years beginning in 2022. Specifically, it requires plans to apply in-network cost sharing and prohibits out-of-network providers from balance billing on surprise medical bills. 

The act, however, does not apply to bills from ambulances – which is important, because as many as 1.5 million privately insured patients are brought to an emergency room by an ambulance and may be at risk of getting a surprise medical bill each year, according to Kaiser Family Foundation. 

Although the No Surprises Act doesn't address surprise ambulance bills, it does require that a federal advisory committee convene to review and recommend options to protect patients from them.
 

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com