December 07, 2021
Area(s) of Interest: Out of Network Billing
The U.S. Departments of Health and Human Services, Labor, and Treasury in late September released an interim final rule to implement Part II of the federal surprise billing law, “The No Surprises Act” which takes effect on January 1, 2022. The law was Intended to protect patients from surprise medical bills and establish a balanced process for health plans and physicians to resolve out-of-network payment disputes. The California Medical Association (CMA) believes that as written it will increase health care costs and reduce access to care for patients.
The second regulation sets forth how the critical independent dispute resolution (IDR) process will be implemented. It includes a rebuttable presumption that the plan's median contracted rate (referred to as the “qualifying payment amount”) is the appropriate out-of-network payment rate in the IDR process, thereby establishing a de facto benchmark payment rate for all IDR cases. This provision is in direct conflict with the statute and clear congressional intent.
CMA is deeply concerned with the rule and recently submitted comments urging the Biden Administration to ensure a balanced independent dispute IDR process, as Congress intended, rather than one that favors an already powerful insurance industry.
CMA strongly supported Congress’ efforts to protect patients from unanticipated medical bills for out-of-network care, so patients are not afraid to seek treatment in medical emergencies.
CMA shared California’s experience, telling Congress it should not establish a benchmark payment rate in the law, similar to California’s AB 72, because in doing so it ultimately became the default payment rate out-of-network services and some in-network care. California’s health plans recognized that they could force physicians out-of-contract by paying the artificially low AB 72 benchmark payment rate. Because regulators were largely unwilling to oversee health plan network adequacy, these narrow networks jeopardized patient access to care. Small, independent physician practices could not remain financially viable and many consolidated with larger health systems so they could continue to care for patients in their communities. As numerous studies show, such consolidation substantially increases health care costs.
Congress listened to the California experience with AB 72, and the strong concerns expressed by physicians, hospitals and other providers across the nation, and ultimately rejected legislative proposals that established a benchmark payment rate because it would have tipped the balance of the IDR process heavily in favor of the for-profit health plans to determine out-of-network payment rates.
Congress instead adopted a balanced process that requires IDR entities to consider various factors equally when determining an appropriate payment rate. In implementing the law, regulators ignored the concerns of the nation’s physicians and hospitals and more than two years of bipartisan, bicameral legislative work. The interim final rule undermines the entire IDR process by requiring arbiters to greatly prioritize the artificially low median in-network rate set by insurance companies, rather than considering all factors in the set forth in the statute as passed by Congress.
This approach is sure to drive payment rates lower and encourage insurance companies to narrow their networks even further, which would make it harder for patients to get medical care. We now fear the viability of physician practices is at stake, and it will be harder for physicians to care for patients, particularly in rural and underserved communities. The administration’s interpretation of the legislation is far outside the bounds of what Congress passed into law with its No Surprises Act.
CMA will continue to fight to ensure the No Surprises Act is implemented consistent with the law and ensure a balanced IDR process as Congress intended rather than one that favors an already powerful insurance industry.
For more information, see CMA’s comments.
CMA to host webinar on No Surprises Act
CMA is hosting a webinar on Wednesday, January 19, 2022, that will address the impact of the No Surprises Act on physicians in California, including the interplay with AB 72 and other California-level surprise/balance billing protections.
The one-hour webinar – No Surprises Act - The New Federal Law and It's Impact on California Physicians – is free to members and their staff, and $99 for all other participants. Click here for more information and to register.