Conflicting opioids of the Surprise Billing Act emerge right before it takes effect.
A ban on surprise billing is set to take effective beginning January 1, 2022. The measure was passed after years of it initial being written and is meant to ensure that patients don’t receive high bills. Former President Donald Trump signed the measure in 2020, but the Biden administration wrote the rules around how it will be implemented.
Now, a year after it was introduced, the American Medical Association (AMA), the American Hospital Association (AHA) and other plaintiffs have filed a lawsuit. The plaintiffs have indicated that lawmakers and the Biden administration misread the law’s language to the injustice of billers.
The new suit could influence contract negotiations between insurance companies and the providers they serve, thus affecting the price for end consumers as well. Providers are still spending millions of dollars to adjust the bill’s fine print to be more in their favor. Money is being spent on aggressive ad campaigns, lobbying efforts, and in the court system.
“This is probably one of the most significant overhauls in the health system since the [Affordable Care Act],” said a spokesperson for the Coalition Against Surprise Medical Billing, which represents the consumer advocacy groups, employers, insurance companies that support the measure. “We certainly don’t see any end in sight in terms of the battle in making sure that these regs are implemented.”
The most debated part of the bill is the portion that describes factors for arbitration. The Biden administration’s interim final rule indicates that arbitrators should reply on one factor, which is the “median in-network rate in a geographic area,” when settling disputes. A senior health department official, who asked to remain anonymous, said the agency “isn’t surprised by the level of advocacy on the issue, given the stakes.” He added, “These rules are fixing this broken system and there’s a lot of money on the table.”
Provider groups contend the billing rules by the Department of Health and Human Services side with insurers. Hospitals and physicians allege the Biden administration’s decision to emphasize the median in-network rate gives large insurance companies a huge advantage as they’re incentivized to keep in-network rates lower to avoid paying more to out-of-network providers.
“Being out-of-network is really the physicians’ only control over how their contracts look,” said Randall Clark, the president of the American Society of Anesthesiologists. “If the insurance companies can treat us the same whether we’re in-network or out-of-network, there is no impetus on the part of the insurance companies to negotiate fair contracts.”
Insurers have pushed back saying that using the median in-network rate is optimal because “it takes into account actual medical costs and local market dynamics,” said Kris Haltmeyer, the vice president of policy analysis at the Blue Cross Blue Shield Association, adding, “The figure reflects the payment that similar providers who chose to contract are paid for those same services in that market.”
Trade groups representing providers say the law lists several other factors that should be equally weighted. There has also been strong pushback from air ambulance providers. The American Heart Association, AFL-CIO and Families USA have also sided with the Biden administration’s interpretation of the law.
“The fact that the current system pays drastically different amounts for the same exact service in the same exact area with no regard to quality – that’s not a benefit of the system, right?” said James Gelfand, executive vice president of public affairs at the ERISA Industry Committee. “And so, they’re complaining that we’re making changes to it? I mean, cry me a river.”
The senior HHS official said, “Some of the things that are being asserted in those conversations or just generally on the issue are kind of outrageous.”