Three employer groups are asking the 9th U.S. Circuit Court of Appeals to let the insurers and employers involved in No Surprises Act claim disputes sue over what they believe to be outrageous awards.
The groups — the American Benefits Council, the ERISA Industry Committee and the Business Group on Health — are urging the appeals court to overturn a federal district court ruling in favor of HaloMD and against Elevance Health’s Anthem Blue Cross subsidiary.
HaloMD is a company that helps doctors and hospitals handle billing disputes with health insurers, self-insured employer health plans and other payers. Anthem sued HaloMD, arguing that the company had increased provider awards by abusing the No Surprises Act independent dispute resolution system.
A judge at the U.S. District Court for the Central District of California ruled in April that the federal courts have no authority to review challenges to No Surprises Act entity payment awards.
“That ruling, if affirmed, would eliminate the only viable recourse available to plans and employers victimized by bad-faith IDR conduct,” the employer groups write in a brief filed with the appeals court last week.
The No Surprises Act system handles three kinds of disputes involving commercial health insurance: disputes over insured patients’ use of emergency air ambulance services; disputes over insured patients’ use of emergency services at out-of-network hospitals; and insured patients’ unintentional use of out-of-network providers at in-network hospitals.
The IDR entities rule in favor of the providers 85% of the time, even when the cases are not eligible for the No Surprises Act IDR system, and IDR entity awards to the providers “often bear no rational relationship to the value of services rendered,” the groups say.
In one case, the groups say, an IDR entity awarded $128,00 to an assistant surgeon for a procedure, even though Medicare would have paid just $207 for the procedure.
In another case, the groups report, an IDR entity awarded $26,800 for a service with a typical Medicare payment rate of $4,049.75.
“These are not isolated incidents attributable to clerical error,” the groups say. “Rather, they reflect the routine operation of a process that selects provider offers without meaningful scrutiny of whether those offers bear any relationship to prevailing market rates, the value of the services rendered, or any objective payment benchmark.”
“Unregulated intermediaries should not be permitted to manipulate the IDR process with impunity,” the groups say.
Providers, HaloMD and others have argued that the No Surprises Act rules are supposed to keep parties from suing over the IDR entity awards; that payers are analyzing the IDR system outcomes data in a misleading way; and that the payers can, and do, ward off No Surprises Act disputes by entering into provider payment rate arrangements with more in-network and out-of-network providers.
The backdrop: The employers are filing the brief at a time when insurers and plan sponsors are facing challenges in the federal appeals courts.
Federal appeals courts usually have a three-judge panel decide cases.
The 5th U.S. Circuit Court of Appeals recently brought all judges on the court together to rule “en banc” on a No Surprises Act case involving the Texas Medical Association and the federal officials in charge of running the No Surprises Act IDR system.
The court argued that the system regulators developed for calculating provider payment estimates is unfair to the providers.
The ruling could make the IDR award amounts that providers are getting higher, payer groups say.