FAH: Surprise billing arbitration process has to be more flexible on timing, batching of claims

Medical bill
Hospitals and insurers are bracing for proposed regulations on what an independent dispute resolution process will look like for out-of-network charges. (Getty/seksan mongkhonkhamsao)

A major hospital group is imploring the Biden administration to not tilt a dispute resolution process for handling surprise medical bills in favor of insurers.

The Federation of American Hospitals (FAH) wrote to three cabinet members Thursday outlining its requests for an independent dispute resolution (IDR) to fairly resolve payment disputes for out-of-network charges. Congress called for the independent arbitration process in a law passed late last year that bans surprise medical bills.

“It is imperative that the implementing regulations and IDR process advance and actively maintain that fairness so as to not inappropriately advantage health plans at the expense of patients and their healthcare providers,” according to the group’s letter to the heads of Health and Human Services (HHS), Labor and Treasury departments.

The letter underscores how both providers and payers are lobbying to frame the dispute resolution process that the Biden administration must finalize by Dec. 27 and goes into effect on Jan. 1, 2022. The three agencies issued proposed regulations last month but did not address how the IDR will be created or operate.

With the proposed regulations for the IDR imminent, FAH said that it was important to give some flexibility to providers and payers, especially when it comes to the timelines.

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Under the No Surprises Act, an out-of-network provider can’t balance bill a patient for more than the in-network rate. That balance between the in- and out-of-network charge must be negotiated between the payer and the provider under an IDR.

If after 30 days, the payer and provider can’t come to an agreement on that charge, an independent arbiter will decide on the amount.

But the statute does give HHS discretion to modify the timelines. FAH called the timelines outlined in the law “very limited,” the letter said.

FAH wants the Biden administration to give payers and providers 30 days, instead of the four days outlined in the statute, to trigger the IDR process after the initial 30-day negotiation period.

FAH also wants more time to choose an IDR entity as the original three-day time frame in the law is too short.

“Flexibility in the IDR timelines would promote a fair and efficient process that achieves the most appropriate result and would not impact the patient,” FAH said.

FAH also wants more flexibility for batching medical claims together related to the treatment of a similar condition.

“The statutory reference to ‘treatment of a similar condition’ should be broadly construed to allow batching of a wide range of clinical scenarios and payment methodologies,” FAH said. “The statutory language does not indicate that Congress intends to restrict bundling based on the diagnosis code or similar distinctions.”

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More of this flexibility can help head off any IDR backlogs and minimize excessive IDR initiations.

The entity that decides the charge too must have no conflicts of interest. The federal government also needs to monitor the process over time to ensure that “IDR entities have the appropriate expertise and sufficient staffing, are free from conflicts of interest and maintain the confidentiality of information disclosed in IDR,” FAH said.

The letter underscores how vital the IDR process itself will be for both the payer and provider industries.

Payers initially fought to not use arbitration at all and favored a benchmark rate for any out-of-network charges. However, providers won out in the final law.