Regulators must follow Congress to promote fairness in surprise billing dispute resolution
For years, the threat of surprise medical bills loomed large over patients plaguing them with the possibility that an unexpected crisis could suddenly plunge them into financial ruin. There has long been consensus that patients should be protected from the financial burden of surprise bills. How physicians and insurers should resolve payment disputes has been much less clear.
Congress appeared to end this lengthy debate after two years of intense negotiation when it passed the bipartisan No Surprises Act in December 2020. Legislators had considered a variety of policy proposals, carefully weighing the costs and benefits of each. To ensure fairness to both physicians and insurers, the law clearly states that median in-network billing rates, which enjoy overwhelming insurance industry support, are only one of many factors that arbiters should consider when resolving a billing dispute.
Unfortunately, federal regulators now want to walk back that bipartisan agreement, giving insurance companies another opportunity to increase their profits while reducing access to care for patients. If adopted, these changes will allow the insurance industry to continue to reduce their physician networks, hurting patients who need frontline physicians when an emergency strikes.
The No Surprises Act was a compromise forged after lengthy deliberation and negotiation. The deal reached last year was designed to respect the interests of patients, physicians and insurers. It requires that payment disputes between physicians and insurance companies be settled by an independent, third-party arbiter and specifies that a variety of factors—including but not limited to median in-network rates—should be taken into account. These additional factors include prior contracted rates for the medical service, the provider’s training and experience, the patient’s acuity, and the facility’s case mix and teaching status, among others. It is only by considering this multitude of factors, Congress decided, that arbiters can fairly resolve payment disputes.
The interim final rule by three federal agencies defies congressional intent. Instead, the rule only allows independent dispute resolution entities to deviate from the median-in-network rate in cases where there is “credible information about additional circumstances [that] clearly demonstrates that the [median in-network] rate is materially different from the appropriate out-of-network rate.” This standard heavily tips the scale in favor of the median in-network rate—and the insurance industry that advocated for it. In a notable display of bipartisanship, the chairman and ranking member of the House Ways & Means committee recently called on regulators to fix the rule so it conforms with congressional intent.
If allowed to go into effect, the rule would have disastrous effects for physicians and patients. Instead of promoting fairness, it would create an artificial ceiling for resolving disputes. It would not consider the actual cost of medical services and would embolden insurers to avoid entering contracts with doctors. The rule’s use of exceedingly low in-network rates would bring median in-network rates down even further. This race to the bottom simply isn’t winnable for physicians in independent practice and the patients they serve. It would accelerate healthcare consolidation, raise costs, and jeopardize patient access to emergency and on-call physicians. This scenario is neither hypothetical nor alarmist. It’s already playing out in California, where physician markets face major challenges thanks to the state’s reliance on an arbitrary, government-mandated benchmark to resolve surprise billing disputes.
The passage of the No Surprises Act was not easy and a long time in coming. It represents an enormous, bipartisan investment of time and resources to reach the fairest and most effective solution for all parties. Patients can literally not afford to relive the battles of the last two years. Regulators in the departments of Health and Human Services, Labor, and Treasury must do their duty by ensuring the final rule matches the No Surprises Act more closely, as Congress intended. Failure to do so would be an affront to our nation’s policymaking process and the citizens it is supposed to serve.
Dustin Corcoran is president of the Physicians Advocacy Institute and chief executive officer of the California Medical Association.