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Press Release

Disclosures: Healio was unable to determine relevant financial disclosures at the time of publication.
January 05, 2022
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No Surprises Act faces multiple lawsuits against billing dispute provision

Source:

Press Release

Disclosures: Healio was unable to determine relevant financial disclosures at the time of publication.
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The No Surprises Act, which officially took effect Jan. 1 as a way to protect patients from unexpected medical bills, already faces several lawsuits from health care organizations.

The bill was passed by Congress in 2020 as part of the coronavirus relief package. It was designed to safeguard patients against surprise out-of-network care costs.

"[It] will have a negative impact on the availability and access to care across the board." Gerald E. Harmon, MD

According to an analysis of health care claims from the Peterson-Kaiser Family Foundation, about one in five emergency claims and one in six in-network hospitalizations in 2017 resulted in at least one out-of-network charge, some ranging from hundreds to thousands of dollars.

Under the No Surprises Act, patients will only be responsible for the costs they would have paid toward their bill for in-network care, or, for uninsured patients, what they were quoted in a “good faith estimate” prior to care, according to a government press release. Any remaining balance must be settled between insurers and providers directly.

Litigation underway

However, the American Hospital Association, AMA, Renown Health, UMass Memorial Health Care Inc. and two physicians based in North Carolina jointly filed suit against HHS, the Office of Personnel Management and the departments of Labor and Treasury due to a federal rule that was created to implement the new law.

In a separate complaint, the American Society of Anesthesiologists, American College of Emergency Physicians and American College of Radiology also filed suit against these departments. Moreover, the American Academy of Orthopaedic Surgeons issued a formal letter to HHS and the departments of Labor and Treasury.

In a statement issued on behalf of its organization and the American Hospital Association, the AMA announced that they are challenging a specific federal rule that “ignores requirements specified in the No Surprises Act and would result in reduced access to care for patients.” These organizations, which assisted in efforts to pass the No Surprises Act, said they support the law but not how it is executed.

The provision under speculation, created by the federal regulatory bodies after the bill was passed, mandates an independent dispute resolution process that presumes the median in-network rate set by insurers is the appropriate out-of-network rate that physicians and hospitals may charge. The American Hospital Association and AMA argued that this provision does not consider the training or quality of care provided.

“The skewed process will ultimately reduce access to care by discouraging meaningful contracting negotiations, reducing provider networks, and encouraging unsustainable compensation for teaching hospitals, physician practices, and other providers that significantly benefit patients and communities,” the organizations stated in the press release.

The qualified payment amount determined by insurers “sets an artificially low benchmark payment, for all care — whether in network or not, which may not support wider access to care — particularly in underserved areas,” the American College of Emergency Physicians said in a press release.

AMA President Gerald E. Harmon, MD, told Healio that keeping the provision in place is not sustainable for providers and may result in narrower networks for insured and uninsured patients, especially in rural and underserved areas.

“I think we're really at risk for losing more physicians, and more independent practices and smaller rural hospitals are at risk for closing their doors,” he said.

The dispute resolution process as it currently stands allows insurance companies to set the standard lower than the cost of delivering care, according to Harmon.

“It just boggles my mind. I cannot imagine what they were thinking when they interpreted the regulation this way,” he added.

Lawmaker support

On Nov. 5, 2021, 152 members of Congress wrote a letter seeking a revision of the provision.

“[The provision] is contrary to statute and could incentivize insurance companies to set artificially low payment rates, which would narrow provider networks and jeopardize patient access to care — the exact opposite of the goal of the law,” the lawmakers wrote. “It could also have a broad impact on reimbursement for in-network services, which could exacerbate existing health disparities and patient access issues in rural and urban underserved communities.”

The American Academy of Orthopaedic Surgeons also found fault with the good faith estimate provision and requested clarity on the provider-patient dispute resolution process for uninsured patients in circumstances where the total medical bill owed exceeds the good faith estimate initially provided.

No revision to the bill’s federal rule has yet been issued. When contacted for a comment, HHS and CMS spokespeople directed Healio to the government press release. The law will “work to promote competition in health care and other sections of the American economy,” according to the release, which did not mention the ongoing lawsuits.

“The No Surprises Act is the most critical consumer protection law since the Affordable Care Act,” Xavier Becerra, JD, HHS secretary, said in the release. “After years of bipartisan effort, we are finally providing hardworking Americans with the federal guardrails needed to shield them from surprise medical bills. We are taking patients out of the middle of the food fight between insurers and providers and ensuring they aren’t met with eye-popping, bankruptcy-inducing medical bills.”

Laura Wooster

However, changes made to the law during the implementation process “undermine the overall goal of protecting patients,” Laura Wooster, senior vice president for advocacy at the American College of Emergency Physicians, told Healio.

“Unless it is modified, this law will further embolden health plans to cut or cancel existing contracts and push even more emergency physicians out-of-network, making it harder for patients to access emergency care,” she said, adding that physicians are already facing burnout over work and increasing financial strain.

If left unchanged, the dispute resolution process provision “will have a negative impact on the availability and access to care across the board,” Harmon said.

References:

AAOS on consequences and misalignment of regulations with the No Surprises Act. https://www.aaos.org/aaos-home/newsroom/press-releases/aaos-on-consequences-and-misalignment--of-regulations-with-the-no-surprises-act/. Published Dec. 7, 2021. Accessed Jan. 4, 2022.

AMA and AHA file lawsuit over No Surprises Act final rule. https://www.ama-assn.org/press-center/press-releases/ama-and-aha-file-lawsuit-over-no-surprises-act-final-rule. Published Dec. 9, 2021. Accessed Jan. 3, 2022.

American College of Emergency Physicians, American College of Radiology, and American Society of Anesthesiologists, file lawsuit against the federal government’s implementation rules for ‘No Surprises Act’. https://www.emergencyphysicians.org/press-releases/2021/12-22-21-american-college-of-emergency-physicians-american-college-of-radiology-and-american-society-of-anesthesiologists-file-lawsuit-against-the-federal-governments-implementation-rules-for-no-surprises-act. Published Dec. 22, 2021. Accessed Jan. 3, 2022.

Here's what the new ban on surprise medical billing means for you. https://www.npr.org/sections/health-shots/2021/10/14/1045828215/ban-on-surprise-medical-bills. Published Dec. 30, 2021. Accessed Jan. 3, 2022.

HHS kicks off new year with new protections from surprise medical bills. https://www.cms.gov/newsroom/press-releases/hhs-kicks-new-year-new-protections-surprise-medical-bills. Published Jan. 3, 2022. Accessed Jan. 3, 2022.

Patients celebrate important protections against surprise billing. https://newsroom.heart.org/news/patients-celebrate-important-protections-against-surprise-billing. Published Jan. 3, 2022. Accessed Jan. 2, 2022.

Wenstrup, Suozzi lead 150 members in demanding administration properly implement surprise billing legislation. https://wenstrup.house.gov/updates/documentsingle.aspx?DocumentID=405203. Published Nov. 5, 2021. Accessed Jan. 3, 2022.

An examination of surprise medical bills and proposals to protect consumers from them. https://www.healthsystemtracker.org/brief/an-examination-of-surprise-medical-bills-and-proposals-to-protect-consumers-from-them-3/. Published Feb. 10, 2020. Accessed Jan. 4, 2022.