By Jayesh Shah, MD, MSc, UHM, ABPM, CWSP, FAPWCA, FCCWS, FACHM, FUHM, FACP

What Every Physician Needs to Know About the ‘No Surprise Billing’ Act

By Jayesh Shah, MD, MSc, UHM ABPM, CWSP, FAPWCA, FCCWS, FACHM FUHM, FACP

Let me start by sharing a story of a patient to help your understanding of surprise medical billing. The patient was a young diabetic male. He developed a wound on his foot, which became infected, and had to go to the emergency room. Then, he was admitted to an inpatient facility. He required various services from a variety of physicians during his hospitalization including surgical, hospitalist, specialist, anesthesia, pathology and radiology services. He ended up having his toe amputated during his hospitalization and was then discharged home. The patient was happy with the medical outcome, as he only lost his toe and was able to save his foot. But in the next 30 days, he started receiving large, unexpected medical bills. Upon checking with his insurance, he was told that some of the services he received were out of network, so he was responsible for the balance of those bills.

Surprise medical billing generally happens when a patient receives out-of-network emergency care or receives care from an out-of-network physician or provider at an in-network facility. In these situations, the patient can get caught in between the provider and the insurance company. Some patients incurring surprise medical bills end up losing their savings, and some have faced unnecessary hardships trying to pay these surprise bills.

These surprise medical bills also happen because many insurance companies have narrow networks. A narrow network means insurance companies do not contract with enough physicians, providers and facilities, which also causes a problem for the patient with access to more affordable care.

Congress stepped in to protect patients by prohibiting balance billing in these scenarios (with certain exceptions) and removing the patient from these surprise medical billing disputes. When Congress passed the No Surprises Act, it sought to promote fairness in surprise medical billing payment disputes between insurance companies and providers. The Act also specified various factors that should be considered during the independent dispute resolution (IDR) process.

The IDR process that was approved by Congress incentivized both insurance companies and providers to act in good faith and resolve disputes amongst themselves, keeping patients out of these discussions. The IDR process must be overseen by an independent and neutral arbiter who must consider several factors in deciding whether to select the provider’s or payer’s offer. Factors the arbiter examines include: • the “qualifying payment amount” for comparable items or services furnished in the same geographic area; • prior contracted rates during the previous four plan years; • market share of both parties involved; • provider’s training and experience; • patient’s acuity/complexity of furnishing the item or service; • if the provider is a facility, teaching status, case-mix and scope of services; • demonstration of good faith efforts by providers and facilities to enter into a network agreement.

But on September 30, 2021, the U.S. Department of Health and Human Services (HHS) and other agencies departed from the language passed by Congress, which was designed to create a balanced IDR process. The interim final rule benefits commercial health insurance companies. According to the process under the rule, arbiters under the

IDR must rebuttably presume that the qualifying payment amount (an amount that is supposed to be the median in-network rate under the law but is deflated based upon the rulemaking methodology) is the appropriate out-of-network rate. The Texas Medical Association (TMA) was the first to file a lawsuit challenging this rebuttable presumption, which gives outsized weight to the “qualifying payment amount.” This is a narrow but critical provision of the rule issued on September 30, 2021 by HHS and other agencies. After a few weeks, the American Hospital Association (AHA) and the American Medical Association (AMA) separately filed another lawsuit. There were many other associations and independent physicians who also have filed a lawsuit. Currently, the matter is in court.

The AMA and TMA strongly support protecting patients from unanticipated medical bills. But a problematic IDR process can reduce access to care by discouraging meaningful contracting negotiations and reducing physician networks. The good news is that the legal challenge does not prevent the laws’ core patient protections from moving forward. It seeks only to align the IDR factor language with the law to promote a more meaningful method of resolving disputes between health care providers and insurance companies.

Several applaud Congress for seeking to protect patients from surprise medical bills. Physicians will need to be familiar with the new law, which is generally effective January 1, 2022.

Among other things, the new law: • bans balance billing (i.e., billing beyond an allowed cost-sharing amount) for emergency services; • bans balance billing (i.e., billing beyond an allowed cost-sharing amount) for out-of-network services performed at in-network facilities with certain exceptions; • generally limits cost-sharing for the services referenced above (where balance billing prohibitions apply) to the in-network cost-sharing for these services; • requires that health care providers and facilities give the patient an

easy-to-understand notice explaining the applicable billing protections, who to contact for any concerns when a provider or facility has violated the protections, and patient consent is required to waive certain billing protections (i.e., the patient must receive notice of and consent to being balance billed by an out-of-network provider); and • imposes certain good faith estimate requirements.

For more information on the law and its implementing rules, please visit https://www.texmed.org/uploadedFiles/Current/2016_Practice_Help/Insurance/Commercial_Insurance/311042_Update_Surprise_Billing_white_paper.pdf.

Hopefully, a legal challenge will bring a balance so patients can receive the best care that is affordable and accessible. Several would like to see the triple aim of health care achieved in the United States of improving the experience of care, improving the health of populations and reducing per capita costs achieved in the United States.

References 1. Centers for Medicare and Medicaid Services. Ending surprise medical bills. https://www.cms.gov/nosurprises 2. Harris PA. AMA says surprise billing proposal in Congress is a step forward. American Medical Association. https://www.amaassn.org/press-center/press-releases/ama-says-surprise-billing-proposal-congress-step-forward . Published May 23, 2019. 3. Texas Medical Association. TMA moves for victory in challenge to unfair arbitration rule. https://www.texmed.org/Template.aspx?id= 58365&terms=Surprise%20medical%20billing. Published Dec. 13, 2021. 4. Texas Medical Association. TMA sues feds over unfair rule for surprise billing law. https://www.texmed.org/Template.aspx?id =58062& terms=Surprise%20medical%20billing . Published Oct. 29, 2021. 5. Robeznieks A. Federal action on surprise medical bills: what doctors should know. American Medical Association. https://www.amaassn.org/delivering-care/patient-support-advocacy/federal-action-surp rise-medical-bills-what-doctors-should?utm_medium=ppc&utm_ campaign=pe-digital-ads-surprise-billing&gclid=CjwKCAiAxJSPBhAoEiwAeO_fP_R_2xDIVRQl02oMWi3tUf2IvgU0fK07SSEoVSqI WNzemAy9eM1zXRoCYusQAvD_BwE . Published Jan. 26, 2021.

Jayesh Shah, MD, MSc, UHM, ABPM, CWSP, FAPWCA, FCCWS, FACHM, FUHM, FACP is Immediate Past president of the American College of Hyperbaric Medicine and serves as medical director for two wound centers based in San Antonio. In addition, he is president of South Texas Wound Associates, San Antonio. He is also the past president of both the American Association of Physicians of the Indian Origin and the Bexar County Medical Society and is a current member of the Board of Trustees of the Texas Medical Association.