Most physicians, especially those that work in hospital settings, have heard about the No Surprises Act. Many healthcare organizations, including the American Hospital Organization and American Medical Association, initially supported the government’s attempts to limit surprise out-of-network billing. However, a lot has changed.
What started out as a consumer-focused initiative to limit surprise medical billing has evolved into a system that heavily favors payers and insurance companies over specialists, providers, and patients. In this article, our physician and medical practice attorneys provide a comprehensive No Surprises Act summary to help doctors understand how this Act may impact them.
Balance Billing: The Truth Behind Surprise Medical Bills
Balance billing, where out-of-network physicians bill patients when their insurance does not cover their entire bill, became a popular rallying point for consumer advocates. The media has highlighted stories where patients got thousands of dollars in unexpected medical bills, increasing balance billing backlash.
However, there is another issue at play that is often missed by the media: insurers often reimburse unreasonably low amounts to providers or deny claims entirely, paying nothing. While there is a minority of providers who use balance billing to maximize their profits, most out-of-network physicians simply cannot afford to accept in-network reimbursement rates.
Unfortunately, the economic realities that underpin most cases of balance billing never received much attention from lawmakers. Congress instead focused on protecting consumers, eliminating unwanted, surprise medical bills.
The No Surprises Act: What the Law Says
The No Surprises Act was signed into law on December 27, 2020, and went into effect on January 1, 2022. Its stated goal is to reduce healthcare consumers’ surprise medical bills and out-of-network balance billing—which can be financially catastrophic for patients. The law attempts to do this by requiring most out-of-network providers to adopt in-network rates and cost-sharing agreements.
It applies to many physicians’ and specialists’ services, including:
- Emergency facility and professional services
- Out-of-network services delivered at in-network facilities, such as care by out-of-network specialists
- Post-stabilization care
- Emergency and non-emergency air ambulance transport
Under the No Surprises Act, healthcare insurers and self-insured plans must treat all covered services as if they were in-network when applying patient cost sharing, deductibles, and out-of-pocket limits.
However, there are situations when in-network rates might be insufficient—and Congress has acknowledged that providers and payers might have legitimate disputes about reimbursement rates.
When disputes arise under the No Surprises Act, providers and payers participate in the law’s independent dispute resolution process (IDR). During this binding form of arbitration, the provider and payer both submit the final offer that they will accept, and the arbitrator picks one of these reimbursement rates. The losing party must also pay the IDR fees.
The Act outlines a series of factors that arbitrators were supposed to consider when evaluating each side’s final offer:
- Qualifying payment amount (QPA): a geographic area’s median in-network rate for similar medical services or procedures
- The provider’s level of training, teaching status, and case mix
- The provider’s market share
- The quality and outcomes typically delivered
- The complexity and scope of services
- The acuity of the patient
- Whether the provider made a good faith effort to enter into a network agreement
- Other information and circumstances
The arbitrator, however, cannot consider public payer rates, such as those from the Centers for Medicare & Medicaid Services, or usual and customary charges.
At these early stages, most healthcare organizations, like the AMA, supported the efforts to reduce surprise billing.
- RELATED ARTICLE: Do You Understand Your Healthcare Payer Contracts?
Interim Final Rules Make Substantial Changes to the No Surprises Act, Harming Physicians and Helping Health Plans
In 2021, the Departments of Health and Human Services (HHS), Labor, and Treasury issued a series of interim final rules, outlining how the agencies would implement the law and resolve disputes between providers and payers. This is where things became complicated. What started as a pro-consumer bill took another turn.
When the federal government issues “interim final rules,” they can skip a formal notice and comment process, making it difficult for stakeholders (like providers) to voice concerns or suggest changes before the rules become effective.
In this case, the Departments of Health and Human Services, Labor, and Treasury’s collective rules made an important change to the law, primarily to the IDR process. Instead of weighing all the factors listed in the No Surprises Act, arbitrators would often be bound by the QPA.
This solution neither served patients nor providers, but it was a win for insurance companies and other payers.
Healthcare Professionals Challenge the Act’s IDR Rules
By September 2021, the American Medical Association, American Hospital Association, and others issued statements that the No Surprises Act’s rules heavily favored insurance companies and self-insured plans, not healthcare consumers. Surprise billing certainly has a damaging effect on patients who unknowingly work with out-of-network physicians and providers.
Media coverage of these issues, however, often fail to address that insurers often reimburse unreasonably low amounts to providers and providers are limited in how they can pursue reimbursement for claim denials. Most out-of-network physicians cannot afford to accept in-network reimbursement rates.
When the rules gave QPA presumptive weight over all the act’s other factors, it made it virtually impossible to appeal a claim, giving insurance companies incredible leverage and power over providers.
It was not long before providers began filing lawsuits. As of January 2022, the American Hospital Association, American Medical Association, Renown Health, UMass Memorial Health Care, American Society of Anesthesiologists, American College of Emergency Physicians, American College of Radiology, Texas Medical Association, and two North Carolina doctors have all filed lawsuits that challenge the No Surprises Act’s rules.
Who Will Be Most Affected by the No Surprises Act?
The interim final rules will have the deepest effect on doctors and medical practices that provide in-facility and specialist care in a hospital setting. This might include out-of-network providers who deliver emergency services, radiology, pathology, and obstetrics.
While some physician practice groups have the resources to double-check QPAs, research the median rates for “similar” services, and retain skilled legal counsel, many smaller practices will be at a significant disadvantage. Many healthcare advocates are concerned that independent private practices, rural specialists, and other niche providers will be unduly harmed by surprise billing legislation—and might decide to walk away from their practices.
- RELATED ARTICLE: 5 Ways Your Healthcare Organization Can Reduce Payer Denials
Need Help With Your Medical Practice’s Revenue Cycle? Bryant Legal Group is Here to Help
The No Surprises Act is still evolving, and our healthcare attorneys are carefully monitoring the situation. We represent medical practices and physician groups across the country, helping them improve their revenue cycles and resolve their payer disputes.
If you have questions about the No Surprises Act, lawsuits about its final interim rules, or a complex provider-payer issue, we would love to help you find the answers you need. Simply call our office at 312-561-3010 or complete our online form to schedule your free consultation.