J. Scott Applewhite / AP
Patients are months away from having to worry about most surprise medical bills – those additional costs that can run into the hundreds or thousands of dollars when people are unknowingly being treated by a doctor or doctor. off-grid hospital.
The No Surprises Law – which goes into effect Jan. 1 – typically prohibits insurers from waiving those bills to patients and, instead, requires healthcare providers and insurers to make a deal between themselves.
Some observers have speculated that the law would have the unintended consequence of shifting costs and leading to higher insurance premiums.
Many political experts told KHN that in fact, the opposite could happen: it could slow premium growth slightly.
The reason, said Katie Keith, a research faculty member at the Center on Health Insurance Reforms at Georgetown University, is that a new rule released on September 30 by the Biden administration appears to “put a thumbs up on the issue. balance “to discourage settlements at amounts greater than what most insurers typically pay for networked care.
The rule, which provides more details on how these off-grid disputes will be resolved under the No Surprises Act, drew immediate opposition from hospital and doctor groups. The American Medical Association called it an “undeserved gift to the insurance industry”, while the American College of Radiology said it “does not reflect real world payment rates” and has warned that using it so heavily “will cause significant imaging cuts and reduce patients’ access to care.”
Such a harsh speech echoed comments made while Congress was drafting the law.
Here’s how the law will work and how it could affect insurance premiums and the health care industry.
Sending unpaid invoices to arbitration
The No Surprises Act targets a common practice: large and unexpected “pay tickets” are sent to insured patients for services such as emergency care at off-grid hospitals or via air ambulance companies. Some patients receive bills even after using network facilities because they are receiving treatment there from a doctor who has not joined an insurer’s network.
Patients were caught in the middle and responsible for the difference between what their insurer paid for the bill and the often exorbitant fees they received from the provider.
Once the law comes into force next year, patients will only pay what they would have had if their care had been delivered over the network, leaving any balances to be settled between insurers and out-of-network medical providers. The law also gives insurers and providers 30 days to settle discrepancies.
After that, the unpaid bills can enter a “baseball-style” arbitration in which both parties present their best offer and an umpire chooses one, with the loser paying the arbitration fee, which the rule sets for the year. next to $ 200 to $ 500.
Uninsured patients who are billed more than $ 400 on an initial estimate of the cost of their care may also submit cases to arbitration for an administrative fee of $ 25.
Businesses, such as government service companies or those reviewing coverage disputes, can start seeking certification as arbitrators now. The new rule estimates that around fifty of them will be selected by the three agencies overseeing the program (the departments of Health and Social Services, Labor and the Treasury) after having demonstrated “expertise in arbitration, experience in health care claims, managed care, billing and coding, and health care law. ”
The rule also specifies that either party can object to a chosen arbitrator and that the selected one cannot be associated with an insurer or health care provider.
Drive up prices in the middle
But here’s how it all could end up affecting insurance premiums. In the arbitration process, a decision must be made on which price to choose.
The new rule specifies that the arbitrator should generally choose the amount closest to the network median rate negotiated by insurers for this type of care. Other factors, such as the experience of the provider, the type of hospital or the complexity of the treatment, may be taken into account in certain circumstances, but without giving them the same weight.
In contrast, some of the more than a dozen state laws dealing with surprise bills allow arbitrators to consider higher rates, such as the fees billed by hospitals or physicians, rather than negotiated rates, which which could increase expenses.
A recent study, for example, found that in New Jersey – which has different arbitration rules than those put in place for the federal program – cases were settled at a median 5.7 times higher than rates in network for the same services.
Unlike New Jersey, the federal government specifically prohibits taking into account the highest amounts – the fees charged – and the lowest payment amounts, including those from the Medicaid and Medicare programs.
“This seems likely to lower premiums in addition to protecting patients from surprise bills,” said Loren Adler, associate director of the University of Southern California-Brookings Schaeffer Initiative for Health Policy, who co-wrote the New Jersey study.
However, the impact of the law on bonuses is subject to debate. Keith doubts they’ll change one way or the other, although Adler thinks the slowdown in premium growth would be small.
Even the rule says “there is uncertainty as to how the premiums will ultimately be affected”, largely depending on how often disputed bills are submitted to arbitration.
He cited an estimate from the Congressional Budget Office that the provisions of the No Surprises Act could reduce premium growth from 0.5% to 1% in most years, but also noted an estimate from the Centers for Medicare & Medicaid Services. that premiums may increase slightly. Neither study isolated the effect of the arbitration guidelines from the rest of the law.
Adler noted that relying heavily on the network’s median price likely means lower payments compared to other metrics, but, nonetheless, “by definition, a median is half of what physicians are paid, so it could. , in theory, increase that for the other half. “
Encourage service providers to join insurance networks
What is likely, according to health policy experts, is that the new law will encourage more providers to join insurance networks.
Some doctors, most often emergency physicians, anesthetists and radiologists, have avoided signing contracts with insurers. Instead, they typically set fees above insurers’ reimbursement level and sent surprise bills to patients for the difference.
The rule undermines the incentive to use this business model.
It states “quite clearly” that hospitals, doctors, air ambulances and other medical professionals “should not rely on staying out of the network and then trying to use the federal process to get a higher reimbursement”, Keith said.
Some medical companies and advocacy groups have predicted that the law could have the opposite effect.
Insurers will use disputes to “reduce payments to the point where it is no longer possible for many providers to purchase this insurance, nor any insurance,” warned Katie Keysor, senior director of economic policy at American College of Radiology, in an email statement.
Adler said this argument ignores the experience of states with similar laws. (These state rules do not apply to many types of employment-based health insurance, but the federal rule will apply.)
“Every debate over surprise billing has done the opposite and pushed more people into the network,” he said.
Whether a group signs a contract with an insurer may be less important in the future, he said.
Once the law comes into force, “it is absolutely irrelevant whether an emergency doctor is networked or not,” he said. “For all intents and purposes, this doctor is networked. The patient will pay the network cost sharing and there is a price the provider has to accept and the insurer has to pay.”
KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues. It is an independent operating program of KFF (Kaiser Family Foundation).