Fri, 6 August 21

Don’t Be Surprised: Texas Should Follow the Example of the First No Surprises Act

August 6, 2021

By: Madeleine Richter-Atkinson, Jamie Dudensing

Last month, the Biden administration released an interim rule on the No Surprises Act, which was adopted in December to provide patient protections against surprise billing.

Surprise billing is a pervasive issue affecting the affordability of health care. It drives up the cost of insurance premiums and leaves many patients with medical debt. These bills can stick patients with tens of thousands of dollars in unexpected bills after they unknowingly or inadvertently receive care from an out-of-network provider or facility. In some cases, patients have been treated by an in-network doctor or surgeon but also receive care from an out-of-network nurse or anesthesiologist. In other cases, patients may be misled to believe that a facility they are visiting is in-network but learn that the facility was never in-network once they receive their bill. In emergency cases, patients may be taken to an emergency room that is not in-network or may be transported by an ambulance service that is not in-network. In the past year, many patients received surprise bills for COVID-19 testing — a service that’s meant to be free.

Added Protections

While the No Surprises Act provided the framework for patient protections, the final interim rules issued by the Centers for Medicare and Medicaid Services (CMS) will provide clearer and more detailed guidance and requirements to implement those protections. The rule issued last month strengthens and adds protections beyond those from the ACA by:

  • prohibiting surprise billing of emergency services and for the provision of air ambulances,
  • requiring care from out-of-network providers at in-network facilities to be billed as in-network services unless the patient is notified by and gives consent to the provider,
  • adding notice and consent standards for waivers,
  • limiting cost-sharing,
  • creating complaints processes,
  • determining a calculation for qualifying payment amounts (QPAs) that does not consider inflated billed charges,
  • and much more.

Texas Should Embrace the Federal Arbitration Process

Particularly important in the Act and this rule is the use of QPAs, which relate to benchmarking for the Federal arbitration process. Benchmarking “works by using regional price data to determine the appropriate price for a service” and is a fairer, simpler, system for solving payment disputes than the solution implemented in Texas: arbitration based on inflated billed charges.

Benchmarking recognizes that surprise bills are often based on overly inflated billed charges and instead creates a standard for determining fair payment based on negotiated prices, which brings down wasteful health care costs that stem from surprise billing. The Texas arbitration process, on the other hand, considers providers’ over-inflated billed charges a reasonable payment and a potential final price, creates further burden through administrative costs, and establishes a subjective determination of “fair” prices that can vary wildly from arbitrator to arbitrator.

Since its implementation, Texas’ arbitration process has proven to be inefficient at solving disputes, created more administrative burden, and increased costs in the state’s health care system.

According to the Texas Department of Insurance (TDI), dispute resolution requests from the first six months of 2021 already far exceed the number of requests in all of 2020 by 9,047 requests. This demonstrates a disturbing trend of Texas providers using the expensive dispute resolution to continue to price gouge Texans. TDI’s midyear report further shows that the arbitration system only incentivizes providers to inflate billed charges and furthering their practice of price gouging, with the average billed amount in the first six months of 2021 at almost 300% the amount in 2020.

Embracing practices outlined in the No Surprises Act and eliminating the use of billed charges as a factor is a sizable step in the right direction for Texas to lower the ever-increasing cost of health care and coverage.

An expected additional two rules providing further protections and guidelines will be issued before the No Surprises Act goes into effect on January 1, 2022. In the meantime, stakeholders have until August 12 to submit comments on the model notice and disclosure forms and until September 7 to submit comments on this first final rule.

Learn More at Texas Covered

Facilities, providers, and payers must all be prepared to be in full compliance with the No Surprises Act by the end of the year. TAHP is highlighting the No Surprises Act rules in a panel at our annual conference, held this year November 8-10 in Austin, to make sure no one is surprised when these rules take effect. See more details about the panel below. For more information on the conference and to register, visit the Texas Covered website.

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