The No Surprises Act may have shielded patients from unexpected medical bills, but it’s left a bureaucratic mess, with providers and insurers fighting over who’ll cover the costs and Congress weighing whether to step back in.
The big picture: Almost a year and a half after it was enacted, the law is tied up in multiple court cases as providers push to change the process it set up to resolve billing disputes. Cases in arbitration are piling up, with more than 164,000 disputes filed from April through early December 2022.
- For now, all eyes are on the Biden administration, which twice tried to draft rules that providers say favored insurers and prompted lawsuits. Health and Human Services Secretary Xavier Becerra acknowledged at a House Ways and Means hearing last month that the arbitration process has been swamped, with many more claims filed than originally estimated.
Zoom in: The surprise billing law was passed at the end of 2020 after two years of laborious debate and costly lobbying by health insurers, hospitals, doctors and employers.
- It protects privately insured patients from getting stuck with unexpected, often huge bills stemming from disagreements over the cost of out-of-network care.
- But providers remain upset that the median in-network rate is used during the arbitration process to help determine how much they’re paid. They say it doesn’t result in fair reimbursement for out-of-network services and could result in doctors leaving the workforce.
- Insurers are content with the formula and charge that providers are overwhelming the arbitration process and abusing the system for financial gain.
What they’re saying: Being underpaid initially and then having to wait up to six months for a resolution has had a “substantial financial impact,” said Patrick Velliky, vice president of government affairs at Envision Healthcare, a large hospital staffing firm owned by private equity firm KKR.
- Some providers complain a $350 administrative fee HHS set to hear cases sometimes exceeds the amount in dispute, particularly for X-rays and some other radiology services.
- “I think a lot of this is going to be fixed by CMS issuing clearer guidance,” said Adam Beck, senior vice president for product commercial and employer policy at America’s Health Insurance Plans, adding the majority of hospitals and providers are accepting initial payments and that a small number of providers are responsible for the large majority of claims.
Between the lines: At first, nearly 70% of claims were deemed ineligible for the arbitration process.
- For example, only 17 of the 278 claims filed by the Atlantic Neurological Specialists been settled, Alexandra Archibald, the firm’s director of revenue cycle management, told Axios.
- Part of the administrative burden is having to file a claim based on medical service codes instead of for an entire procedure like a surgery, Archibald said.
- There is also variation across the 13 arbitration firms handling cases in how they process claims, and standardizing that could bring new efficiencies, AHIP’s Beck said.
What we’re watching: Lawmakers in the House and Senate said they’re planning to conduct oversight of the law, with Republicans focusing on how the Biden administration is implementing it.
- Senate health committee ranking member Bill Cassidy (R-La.) noted that “the courts continue to toss out the way that the administration has implemented [the law]. So, oversight hearings, we’re going to have some discussions in the HELP Committee. I think that’s all appropriate.”
- A federal judge in Texas has ruled in favor of providers in two of the lawsuits.
- Florida Republican Rep. Vern Buchanan, chair of the Ways and Means Health Subcommittee, said the committee would hold a hearing on the topic in June. A GOP committee aide said “the hearing schedule was fluid,” but given the bipartisan interest, “this is a strong potential topic” for a hearing.
Yes, but: When asked, lawmakers weren’t sure what Congress might be able to do to fix providers’ issues, though some are open to new legislation.
- “If their whole modus operandi is to continue with this absolute unilateral interpretation of the law, yeah, then we’ll have to put another law in,” said Rep. Greg Murphy (R-N.C.), a Health Subcommittee member and a co-chair of the GOP Doctors Caucus.
- Murphy even put a timeline on it, saying: “We’re playing a little bit of a waiting game for the next few months now that it’s being litigated again. But honestly, by mid-summer, if it’s not fixed, we’re gonna have to start over again [with new legislation]. It’s ridiculous.”