Accounting and Financial Reporting

Provider responses to prospective compromise on surprise billing range from concerns to opposition

December 21, 2020 4:43 pm
  • In legislation to address surprise billing, out-of-network rates would be determined through either direct negotiations or an independent dispute resolution (IDR) process.
  • Hospitals are urging tweaks, such as for the IDR process to exclude consideration of any public health-plan rates.
  • Physician advocates have greater concerns and are pushing to stop looming approval to allow for more changes.

A bipartisan, bicameral group of congressional healthcare committees is urging fast passage of a “compromise” to address surprise medical bills, but provider advocates are very concerned about it.

Three House committees and the Senate Health, Education, Labor and Pensions Committee recently announced an agreement on the No Surprises Act and pressed for leaders to include it in an end-of-the-year funding package.

Major provisions of the legislation include:

  • Holding patients harmless from surprise medical bills, including from air ambulance providers
  • Prohibiting certain out-of-network providers from balance-billing patients without giving patients notice of their network status, providing an estimate of charges 72 hours prior to service delivery and getting patient consent for out-of-network care
  • Requiring providers and health plans to resolve payment disputes without involving patients
  • Determining payments through either direct negotiations or an independent dispute resolution (IDR) process
  • Excluding a minimum payment threshold for entering IDR
  • Allowing claims to be batched together

If both a provider and health plan choose to use the IDR process, each party would submit an offer. The arbiter would be required to consider the median in-network rate, information related to the training and experience of the provider, the market share of the parties, previous contracting history between the parties, complexity of the services provided and any other information submitted by the parties.

For 90 days after an IDR determination, the party that initiated the dispute may not take the same party to arbitration for the same item or service. All claims that occur during the 90-day period are eligible for IDR after the 90-day moratorium ends.

When health plans change provider networks, the legislation requires a transition of care for people with complex care needs along with giving patients the right to appeal the change.

The required estimate of charges must describe which providers will deliver treatment to the patient, the cost of services and the provider network status.

Hospitals offer conditional support

The American Hospital Association (AHA) offered initial support for the thrust of the legislation.

“We strongly support provisions to protect the patient from surprise medical bills. Once the patient is protected, hospitals and health systems should be permitted to work with health plans to determine appropriate reimbursement, as is provided for in your bill,” Rick Pollack, president and CEO of AHA, wrote in a letter to the committees. “As you know, we strongly oppose approaches that would impose arbitrary rates on providers, which could have significant consequences far beyond the scope of surprise medical bills and impact access to hospital care, particularly in rural communities.”

Changes AHA says are needed include:

  • Dropping consideration during the IDR process of Medicare, Medicaid and other public health-plan rates
  • Allowing up to a year for batching of claims
  • Designating the initial payment for out-of-network services from the health plan as its offer for the purposes of IDR
  • Clarifying states’ role in enforcement of surprise medical billing violations
  • Establishing penalties for plans that fail to pay providers for out-of-network care or that provide false or inaccurate information on their median contracted rate
  • Clarifying that the out-of-network provider — whether the professional or facility — is responsible for managing their own notice-and-consent process and forms

The call for changes was echoed by the Federation of American Hospitals (FAH).

“The legislation needs further improvement to assure it is operationally practical and does not add undue burden, and we appreciate the openness of policymakers taking the time to assess useful changes,” Chip Kahn, president and CEO of FAH, said in a written statement.

Many physician advocates oppose the bill

The bill has drawn stronger opposition from national physician and medical practice groups.

For instance, the American Medical Association has launched a national grassroots push to prevent Congress from adding the bill to an end-of-the-year government funding package.

“Unfortunately, this legislation leaves many questions unanswered, including concerns that it could lead to drastic reductions to in-network payments,” AMA wrote on its member advocacy page.

The Medical Group Management Association (MGMA) wrote congressional leaders this week and urged them to hold off on adding the bill to the year-end funding package.

“We urge you to allow additional time for MGMA and other stakeholders to work with Congress to address concerns with certain aspects of the legislative language,” wrote Anders Gilberg, a senior vice president for MGMA.

MGMA’s issues with the bill include the 90-day timeline for providing patients with an adjudicated bill for medical services. That would require practitioners to transmit adjudicated bills to patients within 30 days of receiving an adjudicated claim from the patient’s health plan, or else the patient would not be required to pay. Noncompliance would result in civil monetary penalties of $10,000 per violation.

“It is unclear what problem this provision seeks to solve,” Gilberg wrote. “We are concerned that it has the potential to create a new kind of surprise bill if patients receive potentially incomplete or inaccurate bills.”


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