Healthcare industry groups representing providers are upset with the latest surprise billing regulation detailing the independent dispute resolution process.
The American Medical Association (AMA) is calling the latest in a series of surprise billing regulations “an undeserved gift to the insurance industry that will reduce [healthcare] options for patients.”
The statement comes as the Biden-Harris Administration seeks to button up implementation of the No Surprises Act by the end of the year. The Act prohibits surprise medical billing in most situations by making it illegal for providers to bills patients more than the in-network cost-sharing amount for care.
The latest regulation seeking to implement the ban on surprise billing detailed the independent despite resolution (IDR) process by which payers and providers will settle reimbursement rates for out-of-network care that would have resulted in a surprise bill for patients.
The regulation released late last week included details, such as a required 30-day “open negotiation” process that must occur prior to the IDR process and how IDR entities will determine out-of-network rates. The entities will consider rates proposed by both payers and providers, as well as supporting documentation, and select a rate that takes into account the payer’s median contracted rate for the same or similar service in a given area.
Payers and providers will also be subject to an administrative fee for engaging the IDR process, according to the regulation.
Healthcare industry groups representing healthcare providers generally favor the IDR process over the proposed alternative, which was to set reimbursement rates for out-of-network services based on factors like Medicare prices. However, the AMA said the regulation is not in the spirit of the IDR process Congress thought of when passing the No Surprises Act.
The regulation “ignores congressional intent and flies in the face of the Biden Administration’s stated concerns about consolidation in the health care marketplace,” Gerald A. Harmon, MD, president of the AMA, said publicly.
“It disregards the insurance industry’s role in creating the problem of surprise billing at the expense of independent physician practices whose ability to negotiate provider network contracts continues to erode,” Harmon continued in the statement.
The statement comes on the heels of an AMA analysis that found nearly three-quarters of all metropolitan statistical areas are highly concentrated for payers. Additionally, more than nine of ten markets had one payer holding at least 30 percent of the market share. About half of markets had one insurer holding 50 percent of the market share.
Highly concentrated health payer markets stifle competition, leaving patients with higher premiums and narrower provider networks, the AMA said. The latter being a root cause of surprise medical bills.
“Congress appreciated the negative consequences of national price setting for health care services and spent considerable time and effort developing a robust independent dispute resolution process to maintain market balance and preserve access to care, which the Administration apparently ignored,” Harmon said. “It also is apparent that the Administration failed to appreciate the importance of creating an accessible and impartial dispute resolution processes as a backstop against even greater insurer abuses.”
The American Hospital Association (AHA), which applauded the passage of the No Surprises Act last year, was also disappointed with the latest regulation detailing the IDR process.
“Disappointingly, the Administration’s rule has moved away from Congressional intent and brought new life to harmful proposals that Congress deliberately rejected,” Stacey Hughes, executive vice president of the AHA, said in a statement on Sept. 30.
Hughes stated that the “rule is a windfall for insurers. The rule unfairly favors insurers to the detriment of hospitals and physicians who actually care for patients. These consumer protections need to be implemented in the right way, and this misses the mark.”
The Federation of American Hospitals (FAH) also criticized the Administration’s regulation, calling it a “total miscue.”
“It inserts a government standard pricing scheme arbitrarily favoring insurers,” said Chip Kahn, president and CEO of FAH. “For two years, hospitals and other stakeholders stood shoulder to shoulder with lawmakers to develop legislation that would protect patients from surprise medical bills, and last December, Congress passed a bill with a fair and balanced payment dispute resolution process. This regulation discards all of that hard work misreads Congressional intent, and essentially puts a thumb on the scale benefiting insurers against providers and will over time reduce patient access.”