The surprise billing arbitration process has gotten off to a rocky start.
Insurers are accusing providers of submitting every possible claim, even when they know some cases are not eligible for mediation. Providers allege insurers are holding up the federal dispute process by delaying submissions of clear and complete information. The recently published final rule on the process from the Health and Human Services, Labor and Treasury departments likely will not resolve all these problems.
“I'm a generally optimistic person. But I'm not so optimistic,” said Dr. Lisa Maurer, a physician at Emergency Medicine Specialists in Milwaukee and chief medical officer for medical management services organization ConsensioHealth.
The No Surprises Act, which took effect Jan. 1, requires insurers and providers that fail to agree on rates for out-of-network care to engage in independent dispute resolutions overseen by arbiters. The Centers for Medicare and Medicaid Services unveiled the federal mediation portal in April.
Mediators decided just 1,200 out of 46,000 disputes submitted to the portal as of Aug. 11, according to the most recent federal data. CMS received “substantially more” cases to review than initially expected, the agency reported this month. Three of the 11 independent dispute resolution entities are no longer accepting new cases, according to CMS.
“If all of that potential revenue is just being delayed six months, nine months, who knows—that really does affect the bottom line,” Maurer said. Emergency Medicine Specialists has not felt much financial pressure from arbitration delays because of its low volume of out-of-network services, she said.
Under the final rule, mediators must consider insurers’ median in-network payment rates for services but can also consider other qualitative factors in determining the correct sums, such as where patients were treated, the severity of their conditions and the level of their doctors' experience. The median rate, called the qualifying payment amount, is often so low that providers feel forced to enter the independent dispute resolution process, said Manuel Bonilla, chief advocacy officer for the American Society of Anesthesiologists.
Time spent determining how many of these cases qualify for federal arbitration has been the primary cause of delays, CMS reported in a notice this month. Insurers and providers that did not initiate disputes have challenged the eligibility of mediation for more than 21,000 cases, and arbiters tossed out 7,000 more.
Providers are unclear if disputes should be decided by federal or state mediators because insurers are not disclosing the types of plans the patients have, which is one reason they are submitting some ineligible cases to the federal system, said Ed Gaines, vice president of regulatory affairs and industry liaisons at revenue cycle management firm Zotec Partners.
"[Mediators] need more resources, they need more [independent dispute resolution entities], they need more training and they need more clarity around their rules and regulations,” said Gaines, who is a member of the reimbursement committee at the American College of Emergency Physicians.
The additional factors mediators can consider will likely spur more arbitration requests from providers looking to increase reimbursements, said Loren Adler, associate director of the University of Southern California-Brookings Schaeffer Initiative for Health Policy. Every example the final rule provides mediators on how to decide disputes uses the qualified payment amount as the starting point for upward negotiations, he said.
“The final rule means that you do likely get somewhat higher expected average outcomes in arbitration. In turn, providers get paid a little bit more, consumers pay a little bit more in premiums and federal deficits go up a little bit,” Adler said. “There's just a lot more uncertainty injected into this process and we're gonna have even more claims go to arbitration after the already tens of thousands that have gone in.”
Another factor that will increase costs: Policymakers issued guidance alongside the final rule that clarifies that insurers cannot use “ghost rates” to calculate the median in-network rate for specialty services.
Anesthesiologists, radiologists and emergency clinicians argue that insurers manipulated qualified payment amounts for specialists by using these so-called ghost rates for primary care services that were never negotiated, may never be provided by specialists and may never be paid. This can artificially reduce the rates submitted to arbiters, said American Society of Anesthesiologists President Dr. Randall Clark. “We really need to have the federal government put in place a robust audit system to make sure that these calculations are done appropriately,” he said.
The statute requires CMS to issue quarterly reports on how many cases go through the arbitration process and how they were resolved.
Because a Texas Medical Association lawsuit challenging the independent dispute resolution process delayed the portal's launch, CMS does not have data to report for the first quarter but will “produce quarterly reports for subsequent quarters and are committed to transparency in this process,” an agency spokesperson wrote in an email. In the meantime, the agency has given providers and insurers information about how to ask for extended deadlines for federal arbitration, the spokesperson wrote. “We will continue to publish additional guidance to help independent dispute resolution entities and disputing parties resolve disputes expeditiously,” the spokesperson wrote.
The final rule’s requirement that arbiters must consider the qualified payment amount, while also considering other factors, could open the policy up to legal challenges arguing the rule still inappropriately prioritizes insurers' median rates, Gaines said. “We are all wondering whether or not [HHS, Labor and Treasury] have threaded the needle sufficiently to avoid having this rule vacated as well,” he said. “It's a close question.”
The American Society of Anesthesiologists, the American College of Emergency Physicians and the American College of Radiology sued the federal government over the final rule. The anesthesiology organization is evaluating whether and how to continue legal actions over arbitration regulations, Clark said.
But these lawsuits may not stand now that the rule has been finalized. “I don't think there's anything in the law that will support giving primary weight to the alternative information coming in,” said Helaine Fingold, a lawyer at Epstein Becker & Green who represents insurers and providers.