Provider Groups Leery of New Surprise Billing Legislation

December 14, 2020 - A bipartisan group of Congressmembers has struck a deal over surprise billing protections for patients, but details of the draft legislation have some providers groups concerned about the bill’s “fair framework” for resolving payment disputes between hospitals and insurers.

Announced last Friday, the No Surprises Act would hold patients harmless from surprise medical bills for emergencies and non-emergency cases in which the patient cannot reasonably choose an in-network provider.

Patients would only have to pay the in-network cost-sharing responsibilities for the care, while payers and providers would negotiate payment for the rest of the bill.

And if the parties cannot agree on an out-of-network rate within 30 days, they can access an independent dispute resolution (IDR) process in which a third-party would consider the rates proposed by the payer and provider, the median in-network rate, and a number of other factors, including provider training and experience, patient acuity, complexity of furnishing the service, and the facility’s case mix and prior contracted rates.

There would be no minimum threshold to enter the IDR unlike previous versions of surprise billing legislation and claims can be batched together for resolution.

READ MORE: Surprise Billing Action Needed, But Hospitals Urge Congress to Wait

The bill would also apply to air ambulance providers and establish new price transparency and timely billing requirements, including requiring providers to give “good faith estimates” for all scheduled care, even if a patient does not request an estimate, and requiring providers to bill payers within 30 days after discharge or date of service.

Patients would not be required to pay if bills are sent more than 90 days after the service.

The proposed surprise billing solution will take patients “out of the middle” of payment disputes, leaders of the House Ways and Means Committee, House Energy and Commerce Committee, House Education and Labor Committee, and Senate Health, Education, Labor, and Pensions (HELP), said in a joint statement.

“We have reached a bipartisan, bicameral deal in principle to protect patients from surprise medical bills and promote fairness in payment disputes between insurers and providers, without increasing premiums for patients or interfering with strong, state-level solutions already on the books,” the bipartisan, bicameral Committee leaders said.

However, provider groups are voicing concerns with the proposed payment dispute resolution process, citing administrative burden worries.

READ MORE: Surprise Billing Price Controls Decreasing Care Quality in CA

“[W]e have significant concerns with several of the provisions that would attempt to implement unworkable billing processes and transparency provisions that are duplicative and costly without clear added benefit for patients,” the American Hospital Association (AHA) said in response to the Committee leaders.

The group specifically pointed to timely billing requirements, which do not account for how quickly health plans respond to billing.

“Delayed responses from plans could subject providers to penalties and prevent them from billing patients if they cannot provide patients their cost-sharing information within the required 90-day window. While we support the goal of expediting the billing process, we do not believe this provision accounts for the challenges providers face in receiving adjudicated claims back from insurers, and we urge you to remove these provisions,” wrote AHA.

The group also stated that, while it commends lawmakers for requiring third-party arbitrators to consider more than the proposed out-of-network rates, including median contracted rates, the bill should prohibit arbitrators from considering public payer rates when making a decision.

Public payers typically reimburse providers significantly less for services compared to commercial payers, and the payers are not implicated by the surprise billing provisions, AHA argued.

READ MORE: 20% of Elective Surgery Patients Receive a Surprise Medical Bill

Additionally, the group urged lawmakers to allow providers to batch up to a year of claims for the IDR, penalize health plans that do not adhere to surprise billing provisions, and clarify if out-of-network providers are responsible for managing their own notice and consent forms, as well as billing processes.

The Association of American Physicians & Surgeons, however, was more concerned about the overall solution proposed in the draft bill.

In an Action Alert sent to members, the group warned that the draft legislation is “really an insurance company protection bill.”

“Poised to be rushed through in the final days of the lame duck Congress, [it] is a surprise attack on patients’ access to independent physicians,” the group stated.

If approved, the bill would increase government control of healthcare by adding red tape for providers, creating a federal claims database “inimical” to patient privacy, and requiring independent physicians to submit claims for patients who have commercial insurance. “This provision has unclear and potentially harmful implications for the ability of patients and physicians to enter into third-party-free relationships,” the group stated.

Discussions among lawmakers about surprise billing have slowed after Ways & Means Chair Richard Neal (D-MA) refused to support previously proposed solutions, leaving a potential solution out of a year-end package last year.

House Speaker Nancy Pelosi (D-CA) recently pressured lawmakers to revive discussions and reach a consensus.

The No Surprises Act was seemingly approved by Committee leaders last week with new provider-friendly changes, including the exclusion of a benchmark rate-setting process, which provider groups have lobbied heavily against.

The bicameral, bipartisan group is now soliciting stakeholder feedback on the proposed surprise billing bill and expects to finalize the solution to include in end-of-year funding legislation.

UPDATE 12/14/2020: The Federation of American Hospitals (FAH) has issued the following statement on the No Surprises Act:

“It is time to put to rest surprise billing concerns for patients. The bipartisan effort in the House and Senate to protect patients from surprise medical billing has made significant progress in recent days.

“We appreciate the advances on this legislation which removes surprises for patients by defining and limiting their cost sharing, allows for payment disputes between payers and providers to be settled reasonably, and does not impose unnecessary, arbitrary rate setting. The legislation needs further improvement to assure it is operationally practical and does not add undue burden, and we appreciate the openness of policymakers taking the time to assess useful changes.

“No legislative measure is perfect, but the winners here – most importantly - are patients. 

“We look forward to continuing a productive dialogue with Congress as policymakers work to ensure these critically important protections for our patients become law, hopefully this year.”