Thu, 2 December 21

Look for New Patient Protections in Your Stocking This Holiday Season

December 2, 2021

By: Madeleine Richter-Atkinson, Jamie Dudensing

As we near the January 1, 2022 start date of the wildly popular new law to end the egregious practice of surprise medical bills, debate over the details has heated up. Following the release of interim final rules in October, the same physicians that initially fought to preserve the practice of sending patients unexpected bills are now complaining over the details of how they’ll be paid.

The rules lay out the independent dispute resolution process for arbitration when health care providers and insurers can’t reach an agreement on a fair price. Among other things, the rules require that an arbitrator must consider the median in-network contracted rate — an amount created through market negotiations — as the appropriate amount to be paid to the provider. Doing so keeps a balance of power between insurers and providers, who have already negotiated the fair in-network rate.

However, some medical providers who’ve profited by price gouging for unexpected out-of-network care now claim the rules are unfair. According to Kaiser Health News, in response, Health and Human Services Secretary Xavier Becerra stated “It’s not fair to say that we have to let someone gouge us in order for them to be in business.”

The bottom line of the No Surprises Act is protecting patients, and as the Commonwealth Fund notes, the rules are “designed to decrease the risk of higher prices and premiums for consumers.” Providers who take advantage of patients and charge extortionate rates for out-of-network services will have to face the consequences of their attempted manipulation and accept a fair price. Secretary Becerra further stated, “those who are overcharging either have to tighten their belt and do it better, or they don’t last in the business.”

Instead of the median in-network rate, providers propose much higher benchmarks like those already implemented in New York and New Jersey, where arbitration decisions are based on physician set billed charges created without market negotiation. In those states, arbitration decisions come in 8% higher than the billed charges benchmark.

Implementing this methodology nationally would result in rising costs of care for everyone, as health insurers would have to either pay high out-of-network arbitration rates or accept higher in-network rates with providers; costs that trickle down to businesses and families. Conversely, the arbitration process as it stands is expected to lower insurance premiums by 0.5% to 1% and fairly balances negotiated rates with consideration of a provider’s experience, the state of the market, and the complexity of the disputed case.

There has also been strong vocal support for maintaining the protections set in the rules. Two of the No Surprises Act’s authors, Representatives Scott and Foxx, wrote a letter noting the Act’s strong bipartisan support and remarked on how the rules fairly balance the interests of many stakeholders while also reducing administrative burdens and health care spending.

Additionally, more than 60 stakeholder groups joined forces to call out those who want to undermine the proposed protections, noting that the arbitration process in the rules is critical to protecting patients. The process “chooses patients over private equity and is a meaningful step towards lower health care costs for millions,” their letter to the Biden administration states. “It preserves the right of all parties to have their unique circumstances heard, recognizes nuances of health care pricing, More in-network care at more affordable rates for workers & families.”

Texas, one of the earliest adopters of protections against surprise billing, should look to this federal arbitration process as an example for creating a fairer, more efficient, and less costly state arbitration process. No one deserves to be price gouged for getting care they need. Eliminating the use of billed charges would lower health care costs in the state and would protect every Texan from manipulative and predatory business practices.

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