Last December, Congress passed the “No Surprises Act” to shield patients from unexpected bills incurred when they receive medical treatment from providers outside their insurance networks. The bipartisan bill was applauded by groups like the American Hospitals Association,1 as well as consumers frustrated with the long history of “balance billing” in the United States — a process in which out-of-network providers bill individuals for the charges not covered by their insurance plans. The “No Surprises Act” attempts to remove patients from the center of these conflicts by establishing an independent dispute resolution process between insurers and providers.2 But as Congress finalizes the details of the implementation of the No Surprises Act, many providers are protesting new guidelines they argue will benefit insurers at the expense of patients and providers.3
Patients often encounter surprise bills in emergency settings, when they go to (or are taken to) a facility without consideration of their insurance plan due to a focus on quickly receiving definite care. A 2017 study found that patients who received surprise bills for emergency care paid ten times as much as those who did not, and that roughly 18 percent of emergency visits resulted in at least one out-of-network bill.4 But surprise bills can also appear when patients go to an in-network facility but receive care from an out-of-network provider, such as an anesthesiologist, surgical assistant, or ambulatory service.2 Roughly one in five privately insured patients undergoing an elective surgery at in-network hospitals received such a bill, according to a 2020 study. This was often attributed to anesthesiology expenses, with an average out-of-network bill of $1,219 in the study.4
According to a new rule of the No Surprises Act, a particular benchmark — the qualifying payment amount (QPA) — should serve as a “starting point” in making payment determinations, as this number is “generally the plan or issuer’s median contracted rate for the same or similar service in the specific geographic area,” according to the Centers for Medicare and Medicaid Services (CMS).2 Parties can submit additional information if they wish to make an offer that deviates from the QPA-based offer, but it “must clearly demonstrate that the value of the item or service is materially different from the QPA,” according to the CMS.2
Now, members of Congress are arguing that prioritizing the QPA over other considerations (physician’s training, quality of outcomes, local market share of the parties involved, etc.), will give insurers in upper hand in the dispute resolution process. Relying on the QPA may incentivize insurers to set artificially low payment rates, putting pressure on small practices, like anesthesiology practices, and limiting patients’ access to care. Over 150 lawmakers — nearly half of them Democrats, and some of them doctors themselves — signed a letter citing their opposition to the new rule.3
Also speaking out against the rule are leading physician societies, including the American Society of Anesthesiologists (ASA). These societies argue that the QPA is calculated by the insurance companies “without meaningful oversight or transparency,” and therefore can be manipulated in their favor without reflecting actual payment rates, thereby undermining the spirit of the legislation, which emphasizes information sharing and the equal consideration of multiple factors.5 For this reason, some health care experts have emphasized that “rule makers should prioritize, strengthen, and highlight full historical context for arbiters and emphasize this information-sharing provision in final rulemaking for the arbitration process.”6
Already, the ASA is protesting actions believed to be driven by insurers’ desires to maintain the upper hand in forthcoming disputes. According to the ASA, Blue Cross Blue Shield of North Carolina threatened in a letter to anesthesiology and physician practices that their contract and in-network status would be terminated unless they immediately agreed to payment reductions ranging from 10% to over 30%, with the No Surprises Act cited as driving the reduction. To many, this shows how the new rule may allow insurance companies to leverage their market power to prioritize their finances, pushing providers out of insurance networks or forcing them to accept lower rates along the way.7 It may particularly harm networks in rural and underserved areas by incentivizing insurers to push down the rates they pay to in-network providers.3
Still, in some areas, a united group of providers may be stronger than the insurers in the market, allowing them to take the upper hand. The Congressional Budget Office also reports that patients may enjoy lower premiums, reduced by an estimated 1%, as a result of the act.3 If the act is passed with these provisions, it ultimately remains to be seen what effect it will have.
References
- Detailed summary of No Surprises Act. (2021, January 14). American Hospitals Association. https://www.aha.org/advisory/2021-01-14-detailed-summary-no-surprises-act
- Requirements Related to Surprise Billing; Part II interim final rule with comment period. (2021, September 30). Centers for Medicare and Medicaid Services. https://www.cms.gov/newsroom/fact-sheets/requirements-related-surprise-billing-part-ii-interim-final-rule-comment-period
- McAuliff, M. (2021, November 17). Congressional doctors lead bipartisan revolt over policy on surprise medical bills. Kaiser Health News. https://khn.org/news/article/surprise-medical-bills-policy-congressional-doctors-backlash/
- Office of the Assistant Secretary for Planning and Evaluation. (2021, November 22). Evidence on Surprise Billing: Protecting Consumers with the No Surprises Act. U.S. Department of Health and Human Services. https://aspe.hhs.gov/sites/default/files/documents/acfa063998d25b3b4eb82ae159163575/no-surprises-act-brief.pdf
- Nation’s frontline physicians denounce regulators’ implementation of key rule in No Surprises Act. (2021, October 1). American Society of Anesthesiologists. https://www.asahq.org/about-asa/newsroom/news-releases/2021/10/nations-frontline-physicians-denounce-regulators-implementation-of–key-rule-in-no-surprises-act
- Koski-Vacirca, R., & Venkatesh, A. (2021, November 2). Rulemaking for health care affordability: Implementing the No Surprises Act. Health Affairs. https://www.healthaffairs.org/do/10.1377/hblog20211028.424036/full/
- Lagasse, J. (2021, November 23). American Society of Anesthesiologists accuses BCBSNC of abusing No Surprises Act. Healthcare Finance News. https://www.healthcarefinancenews.com/news/american-society-anesthesiologists-accuses-bcbs-north-carolina-abusing-no-surprises-act