Hospitals want the Biden administration to take its proposed overhaul of reimbursement disputes a step further with more insight into how payers are calculating their starting point for negotiations as well as greater oversight of payers who delay payouts after a dispute has been settled.
Last October, the administration released a proposed rule with several new requirements for payers, providers and third-party arbitrators settling out-of-network billing disputes under the No Surprises Act's independent dispute resolution (IDR) process.
The potential changes followed implementation complaints from nearly all corners of the healthcare industry and a string of successful legal challenges from provider groups that convinced the court certain portions of the No Surprises Act's IDR process favored payers and disincentivized dispute initiation.
In comments submitted this week, the American Hospital Association (AHA) said it is “pleased” with and supports several of the proposed rule’s changes. These include permission to include multiple items and services associated with a patient encounter within a single dispute (known as batching), additional documentation of negotiations and requirements that payers share more information relevant to claim eligibility with providers.
Among its several concerns, however, “of greatest importance” to the AHA was that the proposal doesn’t include new requirements that payers share how they arrive at a qualifying payment amount (QPA), which serves as the basis for determining individual cost sharing under the No Surprises Act. Because third-party arbitrators are statutorily mandated to factor the QPA into their decision, “QPA accuracy and transparency is fundamental to a functioning and efficient IDR process,” the AHA wrote.
Behind that, the AHA noted that the administration’s proposed rule doesn’t outline how federal departments plan to conduct oversight of scenarios in which payers don’t pay a provider after an IDR determination has been reached.
The group said hospitals and health systems have seen payers “consistently” ignore the determinations. It pointed to a testimony Wellstar Health System Chief Financial Officer Jim Budzinski gave Congress last year in which the executive said the system has only received payments in a third of the disputes it won, leaving an outstanding balance of $40 million.
Little oversight has so far allowed payers “to take advantage" of the No Surprises Act and “enrich themselves” at the expense of providers and consumers alike, the group wrote.
“This behavior cannot persist,” the AHA wrote. “The delay or loss of millions of dollars in reimbursement only harms patients by starving providers of the resources they need to deliver care. Indeed, the loss described above has contributed to this health system operating with negative margins.”
The AHA’s letter also pointed to three of the administration’s other proposals that “are inadequate to substantially improve the IDR process.” These are proposals to limit batched claims to 25 line items, to bar providers from batching claims for self-insured employers by third-party administrators and to charge “high fees” that for non-initiating parties are only reduced when the claim is found to be ineligible.
Public comments on the proposed rule from AHIP, which were submitted about a month ago and represent the payer side of the industry, acknowledged that parties “deserve clarity about what is being reported as a QPA.” However, AHIP pushed back on some of the additional items to be disclosed during the initial payment notice or notice of denial of payment as “duplicative” and would require at least a year for plans to integrate into their processes.
AHIP also supported a 25-line-item cap on batched claims, with the exception for when the items encompass a single episode of care; shifting the responsibility of the administrative fee to the initiating party; and other measures to address the “extraordinarily high volume of disputes,” particularly those initiated in bad faith.