Patients are months away from having to worry about most surprise medical bills – those added costs that can run into the hundreds or thousands of dollars when people are unknowingly treated by an out-of-network doctor or hospital.
What is unclear is whether the changes to the law made by the No Surprises Act, which takes effect on January 1, will have the unintended consequences of changing costs and leading to higher insurance premiums.
Probably not, many policy experts told KHN. Some predict that it may slow premium growth slightly.
The reason, said Katie Keith, a member of the Georgetown University Health Insurance Reform Center research faculty, is than a rule published on September 30 Biden’s administration appears to “put a thumb on the scale” to discourage settlements for amounts greater than what most insurers typically pay for in-network care.
That rule sparked immediate opposition from physician and hospital groups, with the American Medical Association calling it “an undeserved gift to the insurance industry,” while the American College of Radiology said it “does not reflect pay rates for the insurance industry. real world “and cautioned that relying on it so strongly” will cause large image cuts and reduce patient access to care. “
Such tough talk echoes comments made while Congress was drafting the law.
The most recent guide is the third issued to implement the law, which happened in late 2020 after a battle of years. It was signed by then-President Donald Trump.
The No Surprises Act targets a common practice: sending large, unexpected “balance bills” to insured patients for services such as emergency treatment at out-of-network hospitals or through air ambulance companies. Some patients are billed even after using in-network facilities because they receive care from a physician who has not enrolled in an insurer’s network.
Patients were caught in the middle and were responsible for the difference between what their insurer paid for the bill and the often exorbitant charges they received from the provider.
Once the law takes effect next year, patients will pay only what they would have had if their care had been provided in-network, leaving any balances to settle between insurers and out-of-network medical providers. The law also gives insurers and providers 30 days to resolve discrepancies.
After that, the outstanding invoices can enter a “baseball style” arbitration, in which both parties present their best offer and an arbitrator chooses one, and the loser pays the cost of arbitration, which the rule establishes for the next year between $ 200 and $ 500.
Uninsured patients who are billed more than $ 400 over an initial estimate of the cost of their care can also take cases to arbitration for a $ 25 administrative fee.
Businesses, such as government utility companies or those that review coverage disputes, can now begin applying for certification as arbitrators. The rule estimates that about 50 will be selected by the three agencies that oversee the program, the Departments of Health and Human Services, Labor and the Treasury, after demonstrating “experience in arbitration, experience in health care claims, managed care, billing and coding, and health care laws. ” . “The rule also states that either party can oppose a referee chosen, and the one selected cannot be associated with an insurer or medical provider.
But what price to choose in arbitration?
The new rule specifies that the arbitrator generally must choose the amount closest to the median in-network rate negotiated by insurers for that type of care. Other factors, such as the provider’s experience, type of hospital, or complexity of treatment, can be considered in some circumstances, but are not given equal weight.
In contrast, some of the more than a dozen state laws targeting surprise bills allow arbitrators to consider higher fees, such as billed charges set by hospitals or doctors, rather than negotiated fees. that potentially increase spending.
A recent studyFor example, it found that in New Jersey, which has different arbitration rules than those being established for the federal program, cases were resolved at a median 5.7 times higher than in-network rates for the same services. .
Unlike New Jersey, the federal government specifically prohibits consideration of the highest amounts (billed charges) and the lowest payment amounts, including those from the Medicaid and Medicare programs.
“This is likely to lower premiums as well as protect patients from surprise bills,” said Loren Adler, associate director of the Brookings Schaeffer Initiative for Health Policy at the University of Southern California-Brookings, a co-author of the New Jersey study. .
Still, the law’s impact on premiums is open to debate. Keith doubts they will change either way, although Adler believes the slowdown in premium growth would be small.
Even the final rule says that “there is uncertainty about how premiums will ultimately be affected,” and much depends on how often disputed invoices are submitted to arbitration.
The last rule cited a Congressional Budget Office estimate that the provisions of the No Surprises Act could reduce premium growth by 0.5-1% in most years, but also pointed to an estimate from the Centers for Medicare & Medicaid Services that premiums could increase slightly. None of the studies isolated the effect of the arbitration guidelines from the rest of the statute.
Adler noted that relying heavily on in-network median price probably means lower payments compared to other measures, but still, “by definition, a median is what half of doctors are paid, so that in theory this could increase that for the other helped. “
What’s likely, health policy experts said, is that the new law will prompt more providers to join insurance networks.
Some physicians, most often emergency room physicians, anesthesiologists, and radiologists, have avoided signing contracts with insurance companies. Instead, they generally set charges above the insurers’ reimbursement level and send surprise bills to patients for the difference.
The rule undermines the incentive to use this business model.
It makes it “pretty clear” that hospitals, doctors, air ambulances and other medical professionals “shouldn’t count on staying out of the network and then trying to use the federal process to get a higher reimbursement,” Keith said.
Some medical societies and advocacy groups predicted that the law could have the opposite effect.
Insurers will use the disputes to “reduce the down payment to the point where it is no longer feasible for many providers to take that, or any insurance,” Katie Keysor, senior director of economic policy at the American College of Radiology, warned in an email. . statement.
Adler said that argument does not fly when the experience of states with similar laws is analyzed. (Those state rules don’t apply to many types of work-based health insurance, but the federal rule will.)
“Every surprise billing debate has done the opposite and pushed more people online,” he said.
If a group signs a contract with an insurer it may import less in the future, he said.
Once the law takes effect, “it is completely irrelevant whether an emergency room doctor is in the network or not,” he said. “For all intents and purposes, that doctor is on the network. The patient will pay the in-network cost sharing and there is a price that the provider must accept and the insurer must pay. “
Kaiser Health News is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation that is not affiliated with Kaiser Permanente.