Higher Health Costs Foreseen From Revamped Billing Disputes

Health insurers, employers, and consumers could see higher costs in the wake of Biden administration guidance on settling payment disputes for emergency and out-of-network care, an official with a consumer group said.

But a medical group applauded the March 17 directive by three federal agencies to revamp instructions to arbitrators after a federal court ruled previous guidance was not in accordance with the No Surprises Act, which bars providers from billing patients for higher fees in those situations.

Medical provider groups have been grappling with consumer groups, employers, and health insurers over how payment disputes are settled in the arbitration process created under the law. High payments to out-of-network doctors, such as emergency room physicians and anesthesiologists, could result in bigger health premiums as well as greater out-of-pocket costs for consumers.

The guidance was issued by the departments of Health and Human Services, Labor, and the Treasury.

“This is the guidance that was forced on us by a Texas court decision,” Patricia Kelmar, senior director of health-care campaigns for the US Public Interest Research Group, a consumer advocacy organization, said Monday in an interview. She called the new guidance “disappointing.”

Unlike previous guidance that was overruled Feb. 6 by the US District Court for the Eastern District of Texas, the new guidance instructs arbitrators to consider the “qualifying payment amount,” or median contract network rates, along with other factors listed in the No Surprises Act, such as the level of training of a provider or how severe a patient’s condition is.

It also allows both providers and health plans to submit any other information they think is relevant in deciding payment rates. Previous guidance had instructed arbitrators to give greater weight to the qualifying payment amount.

Factors ‘Random’

“These factors seem quite random, and they will be likely inflationary,” causing insurers to pay more as well as consumers who may have to pay a percentage of the bill through coinsurance, Kelmar said.

“Are we going to say now that the Ivy League-trained medical doctor gets to put in for a higher rate of reimbursement than the one who went to their state medical college?” or will doctors with more experience convince arbitrators they should be paid higher rates, she asked.

Medical codes that are used to bill for care already include payments for higher medical severity, and considering that as a separate factor could lead to double-counting, Kelmar said.

“For sure the premiums will go up if these IDR entities keep going above the qualified payment amount,” Kelmar said, referring to independent dispute resolution entities, or arbitrators.

Moreover, if medical providers find that they can get higher payments through the arbitration process, it may lead to fewer of them joining insurer networks, she said.

Praise From ER Doctors

But Jeffrey Davis, director of regulatory and external affairs for the American College of Emergency Physicians, which supported the Texas Medical Association’s lawsuit against the administration’s arbitration rules, said in a statement that his group is “pleased that CMS is taking steps to address some of the significant concerns” expressed by medical groups that typically work on an out-of-network basis in hospitals, such as emergency physicians, radiologists, and anesthesiologists.

“This is a major step forward the reflects ACEP efforts to make the arbitration process more fair and balanced,” Davis said.

The new guidance “matches the statute insofar as that all factors must be considered,” Christopher Sheeron, president of Action for Health, a group that supports providers on arbitration issues, said in an interview.

In addition to ranking the qualifying payment amount equally with other factors, the new guidance makes it easier for medical providers to include other claims in an arbitration case rather than having to file each case separately, Sheeron said.

A number of lawsuits have been filed by medical providers against the administration’s rules implementing the No Surprises Act, including a lawsuit challenging higher fees imposed to file arbitration cases. The groups argue the fee increase, from $50 to $350, makes it prohibitive for many providers to challenge payments by insurers.

The administration raised the fees to try to curb the number of arbitration cases being filed. Between April 15 and Sept. 30, 2022, more than 90,000 disputes between health-care providers and insurance plans were initiated, according to a December 2022 report from the Centers for Medicare & Medicaid Services. The agencies enforcing the law had initially estimated about 17,000 cases would be filed for all of 2022. Only 3,576 disputes had been settled, the report said.