Aug 22, 2022 - Health

Surprise billing rule gets new rules for working out disputes

Illustration of an opened envelope with a billing statement inside and confetti spilling out.
Illustration: Aïda Amer/Axios

A year and a half after Congress protected patients from surprise medical bills, the Biden administration has finalized the process for deciding who'll actually pick up the tab.

Why it matters: Billions of dollars are at stake — either for providers or for insurers and employers.

The big picture: It's the latest chapter in efforts to protect patients from facing unexpected charges from doctors who are not in their insurance networks.

  • Except the final rules issued late Friday issued could trigger new skirmishes over how to resolve billing differences while holding the patient harmless.

Details: The rules from the Labor Department, the Health and Human Services Department and the IRS define the factors arbitrators have to weigh in settling disputes over out-of-network care.

  • For some context, the administration had already made one attempt at working out the process.
  • But providers successfully challenged it in court saying it unfairly favored insurers by telling arbiters to select the rate closest to the health plans' median in-network rates for the same or similar services in the geographic region — and preventing meaningful negotiation.
  • In a move that tips the scales toward making the rule more provider-friendly, HHS said arbiters no longer have to start with that median in-network rate and must consider "all additional permissible information submitted by each party to determine which offer best reflects the appropriate out-of-network rate."
  • Arbiters "should select the offer that best represents the value of the item or service under dispute after considering the [qualifying payment amount] and all permissible information submitted by the parties."

Keep in mind: Many of the doctors involved in the surprise billing fight are employed by private equity-backed companies. Studies have shown that the doctors that tend to send the most surprise bills tend to get paid more than other specialties.

What they're saying: The feds "watered down" the surprise billing law, according to the ERISA Industry Committee, or ERIC, which represents large employers that provide health plans.

  • "Instead of adhering to Congress's original intent, the administration back-tracked on limiting out-of-network payments to reasonable market-driven rates," said Annette Guarisco Fildes, CEO of ERIC.

On the other side: "This moves more in the direction of the original intent of the legislation," said Chip Kahn, CEO of the Federation of American Hospitals. "The proof will be how this works in practice."

What we're watching: How arbitrators apply the new rules and weigh the evidence each side submits — and whether the process establishes a measure of predictability in health costs.

The bottom line: We may be getting closer but this likely isn't the final word on surprise billing. When it comes to payment rates, there will always be winners and losers.

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