A broad range of employers, unions and other groups are urging the Biden administration to write rules implementing surprise medical billing protections that provide comprehensive protections for patients and lower health care costs for employers, employees and their families.
Nearly 50 organizations, including the ERISA Industry Committee (ERIC) and the American Benefits Council (ABC, which also filed its own comments), sent comments to the Departments of Health and Human Services, Labor, and Treasury that applaud the law’s removal of patients from the center of billing disputes. The groups cautioned however, that there are several provisions of the law that could, depending on how they are implemented, cause higher costs for employers and patients.
The surprise medical billing legislation enacted in last December’s year-end spending package (the Consolidated Appropriations Act, 2021), is generally effective January 1, 2022. Out-of-network health care providers will then be barred from billing patients for more than the in-network cost-sharing due under patients’ group health plan or insurance policy for (i) out-of-network emergency care, (ii) certain ancillary services provided by out-of-network providers at in-network facilities, (iii) other out-of-network care provided at in-network facilities without the patient’s informed consent, and (iv) air (but not ground) ambulances.
Plans or insurers and out-of-network providers are encouraged to negotiate payment amounts. If, however, after a 30-day open negotiation period the parties are unable to reach an agreement, the parties may initiate a binding arbitration process – referred to as Independent Dispute Resolution (IDR) – in which the arbitrator must select between the final offers submitted by the parties (this is often referred to as ‘baseball-style arbitration’). The arbitrator will take into consideration several factors including the plan’s historical median in-network rate for similar services, but cannot consider the provider’s billed charges or public payer (e.g., Medicare and Medicaid) rates.
In their comments, the groups urge regulators to minimize administrative costs associated with the arbitration process, make the process transparent, and encourage providers to resolve payment disputes before pursuing arbitration.
The groups also stress the importance of defining the “qualifying payment amount” (QPA) under the law, which will play a central role for both the arbitration process and setting patient cost sharing for out-of-network services. How regulators define the QPA is vitally important to lowering costs and supporting employer plans and their provider networks, they note. In addition, while the metrics that determine the QPA are complex, the groups caution that “[f]ailure to enact regulations that ensure the QPA is not inflated would mean higher out-of-pocket costs for millions of families in 2022 and beyond.”
Making sure that patients are fully protected from surprise out-of-network bills should be a top priority for regulators, the groups say. Their comment letter emphasizes that new rules “must ensure” that patient notice and consent requirements “do not allow any loopholes for non-emergency providers to balance bill vulnerable patients.”
Part 1 of the regulations is expected by July 1, and will be issued as an interim final rule, which circumvents the need for a formal comment period before final rules are released. Stakeholders will still be able to comment on the rules, and regulators could potentially make changes by the time the law goes into effect on January 1. Part 2 of regulations, which will also be issued as an interim final rule and will delve into the IDR process, is expected by October 1.
ABC’s comment letter notes that “given the complexities involved, and given the near-term effective date, we urge the Departments to provide a good faith compliance standard at least through 2023”, which would be consistent with good faith standards provided by the Departments in similar contexts.