Provider groups are urging the Biden administration to walk back several provisions in a surprise billing rule, including requirements for providers to offer good-faith estimates to certain patients and what they deem a flawed process for determining out-of-network charges.
Providers and payers submitted comments on the interim final rule released back in October. The rule is the second regulation intended to implement the No Surprises Act passed by Congress late last year that bans balance billing.
But comments in the rule underscore major problems providers have with how the Biden administration chose to solve disputes on out-of-network charges, with some groups already taking the administration to court over the process.
The No Surprises Act calls for the creation of an independent arbitration process in case payers and providers cannot come to terms on an out-of-network charge. Under the law, a third-party arbiter chooses between amounts offered by the payer and provider.
But providers claim that the Biden administration gravely misconstrues congressional intent in how the arbiter should choose which offer. They point to language in the rule that calls for the arbiter to primarily consider which amount is closest to the “qualifying payment amount” that is the insurer’s median in-network rate for a specific region.
“This process limits the ability of providers to make a case to the [independent dispute resolution] entity for a fair out-of-network payment and removes the incentive for health plans to negotiate fair contracts and to include providers in their networks,” wrote the American Association of Medical Colleges (AAMC) in comments to the rule.
Providers say the rule should be changed to include other factors such as market shares for both payers and providers as well as the patient acuity. It is on providers to submit information on such factors to the arbiter.
"What was supposed to be an independent check on both parties is gone," wrote the American Hospital Association in comments. "In short, the departments have forfeited this important restraint with respect to plans and issuers, while creating an insurmountable set of conditions for providers."
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They were also concerned that favoring the qualifying payment amount could “encourage payers to artificially lower payment rates, knowing that the IDR process would effectively default to the [qualifying payment amount],” wrote the American Medical Group Association (AMGA) in comments.
The union National Nurses United also was concerned that the rule can favor “large, well-resourced, repeat players over small entities and increases the overall cost of the health care system by creating an expensive new process,” according to its comments.
Payer groups, on the other hand, lauded the rule’s interpretation of the arbitration process.
“The interim final rules go a long way toward addressing the underlying market failure and will help achieve the predicted premium savings intended by the No Surprises Act,” said America's Health Insurance Plans, the leading insurance lobbying group, in its comments.
The Federation of American Hospitals wants the federal government to include measures such as minimum claims thresholds that would have reduced the need for the dispute process.
The group also said plans may be discouraged from even trying to hammer out an agreement with a provider in the 30-day period before arbitration can be considered if they know that the qualifying payment amount will be the main factor in the talks.
Payers and providers waged a similar battle when lobbying Congress over how to handle surprise medical bills, with payers arguing that disputed out-of-network rates should be resolved via a benchmark rate and providers pressing for arbitration.
Changing good faith estimates
The rule also said providers must submit such estimates of the costs of items and services given to uninsured patients or those who self-pay. But groups say the estimates could cause confusion for patients.
“For the [estimate] to be useful the patients will need to be specific and accurate about all the services they are requesting,” the AMGA wrote. “It is unreasonable to assume patients will have the knowledge needed to provide the information for non-clinical staff to cypher through tens of thousands of … diagnosis codes for a meaningful estimate.”
The AAMC added that the Biden administration should allow providers to use online price estimators and other information they must create as part of a separate requirement for hospitals to post certain payer-negotiated rates.
The rule also should clarify that providers must only give a good faith estimate when there is a scheduled appointment or a patient requests it.
The Biden administration noted that more regulations are forthcoming on how to provide a good faith estimate for people with other types of insurance. The AMGA said the agency needs to hold off implementing the requirement until it can develop a “procedure that offers clear, accurate and timely information for all patients.”
The Department of Health and Human Services also needs to further analyze which uninsured patients should get a good faith estimate, according to comments from America’s Essential Hospitals, a group that represents safety net hospitals.
“Nearly all essential hospitals have a financial assistance policy or a sliding scale fee schedule for patients with low income,” the group’s comments said. “In other cases, patients with low incomes are required to pay a set copay for certain service areas, such as a doctor’s visit or an inpatient stay, regardless of specific diagnoses and procedures. In both cases, a good faith estimate is needless.”
The concerns from providers come as a legal fight over the rules loom.
The Texas Hospital Association and the Association of Air Medical Services (AAMS), which represents air ambulance providers, both have sued in federal court to overturn controversial provisions in the rule.
AAMS’ lawsuit claims that the interim final rule is not what Congress intended because of the heavy weight placed on the qualifying payment amount in the arbitration process.