With five months before the surprise billing ban takes effect, the Biden administration hasn't released many of the most important details about how the No Surprises Act will work, leaving providers and insurers little time to plan for the changes.
CMS' first rule outlawing balance billing contained expected patient protections against surprise billing and high cost-sharing for out-of-network care, as outlined in the December law.
But providers and insurers are still in the dark about the independent dispute resolution process and how regulators will define key terms for arbitrators or calculate median in-network rates.
"It's not really what providers or payers were looking for," Avalere Health consultant Tim Epple said. "I don't think there is anything that we've seen that differed meaningfully from the legislative text or the intent of the statute."
Healthcare executives could start to get antsy as the Biden administration approaches its self-imposed October 1 deadline to wrap up the rulemaking process, he said. Without more information about how regulators will define geographic regions, immediate in-network rate comparison and other aspects of the law, providers could struggle to figure out their risk exposure and strategy for dealing with the surprise billing ban.
"If they wait until October, that's a pretty tight time crunch for what is going to be a fair bit of change," Epple said.
The patient protections will have the greatest effect on consumers, and will ultimately affect insurers' health plan documents during open enrollment this fall, Manatt Health partner Michael Kolber said.
But later rules will squarely address provider-payer business relationships. Congress didn't give the Biden administration much wiggle room to determine the so-called "qualifying payment amount," which the law defines as an insurer's historical median in-network rate for a given service. Arbitrators will use that information to help settle payment disputes among providers and insurers and, in turn, decide how much consumers must pay out-of-pocket for related services.
"It will force providers and payers to agree on a price," Waller Lansden Dortch & Davis partner Patsy Powers said.
Both providers and payers have strong incentives to bill and pay reasonable rates from the outset because the surprise billing ban leans on an insurer's median, rather than average, historical in-network rate. Neither side is likely to get much out of arbitration in most cases.
Several provider groups lobbied regulators to base the qualifying payment amount on a median of historical claims data, which would have allowed some large providers to keep charging higher rates, said Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy. But the Biden administration followed a more straightforward interpretation of the law instead.
The new rule forces plans to jump through more hoops if they want to deny claims for emergency services. They have to make those decisions based on the patient's symptoms, not diagnosis codes alone.
Among people with commercial health coverage, an estimated 1 in 5 emergency claims and 1 in 6 in-network hospitalizations result in at least one out-of-network bill, according to the Petersen Center on Healthcare and Kaiser Family Foundation.
"We are pleased that federal policymakers recognize ongoing attempts by insurers to retroactively deny coverage of emergency care and that this rule would add additional patient protections. This reaffirmation of the prudent layperson standard helps ensure that patients no longer need to hesitate or delay seeking emergency care over uncertainty about their insurance coverage," the American College of Emergency Physicians said in a statement.
The Congressional Budget Office estimates that the No Surprise Act will lower commercial premiums between 0.5% and 1%, saving taxpayers about $17 billion over a decade. Consumers could save another $34 billion or so thanks to lower premiums and cost-sharing, according to the USC-Brookings Schaeffer Initiative for Health Policy.
The ban on surprise billing could cost providers more than $50 billion over 10 years. Some of those losses will come from the pockets of private equity companies rather than doctors themselves, Adler said in an email.
Providers could still take the battle over surprise billing back to the states to get more favorable terms, Kolber said. The new rule defers to states that have surprise billing rules on the books, allowing them to create and enforce their own rules instead of federal rules created under the No Surprises Act. However, it's unclear whether providers will pursue that strategy, given the surprise billing ban's popularity among the public.