Texas Medical Association sues federal government over surprise billing
The Texas Medical Association (TMA) challenge a federal law designed to protect patients from surprise medical bills, arguing in a new lawsuit that regulators have stacked the bridge against health care providers in their implementation of the No Surprises law.
Essentially, TMA is challenging the arbitration process for off-grid bill settlement, arguing that the regulation favors insurers over providers.
“This is a fight for the money,” said David Hyman, MD, JD, professor of health law and policy at Georgetown University Law Center, who studies the regulation and financing of health care . “Suppliers who could use off-grid billing strategies to obtain significant additional amounts are not very happy that laws and regulations are reducing their ability to do so much more severely than they thought.”
The No Surprises law, which is due to come into effect in January 2022, aims to ease the burden of unexpected patient bills. Surprise billing can occur if a patient ends up with an off-grid provider at a network hospital. The provider may receive only part of what they bill to the insurance and may pass the rest on to the patient.
Hyman said surprise billing (also known as “balance billing”) arose because doctors who provide one-time services learned they might be better off staying out of the network. “The patient will never return to this provider,” he said. “There is a great incentive to exploit your disparities in bargaining power, like [sending] a huge bill and billing the balance for it. “
In 2016, as much as 42.8% of emergency room visits resulted in an off-grid bill, and these got more expensive over time. According to a study, emergency physicians recouped a higher portion of what they billed for services for likely surprise bills compared to other cases. The Kaiser Family Foundation showed that two-thirds of Americans said they were concerned about unexpected medical bills.
Under the No Surprises Act, patients would only pay the amount they would have for a co-payment or deductible in the network. Then the supplier and the insurer must agree on the remainder of the cost. If they can’t agree on an amount, they can go to arbitration, where a third party – an “independent dispute resolution” or IDR entity – steps in to resolve the dispute for them. Each party must come up with an amount, and the arbitrator then determines which of the two is fairer for the insurer to compensate the off-grid provider.
But TMA is challenging HHS rules for IDR, which they say are different from what Congress intended when it passed the law. While TMA President E. Linda Villarreal, MD, said in a press release the organization “supports the patient-protection intent of the No Surprises Act,” their lawsuit argues that the HHS interim final rule gives insurers an unfair advantage, which would have disproportionate consequences for Texas providers .
In particular, they emphasize the use of a “rebuttable presumption” of the qualifying payment amount (QPA), or median contract insurance plan rates, to determine payment. That is, arbitrators should first assume that the insurance plan’s network median payment for a given medical service is appropriate.
In their lawsuit, the TMA says the law does not allow regulators to dictate how arbitrators decide cases. They add that the rules “will unfairly skew the results of the IDR in favor of payers, giving them a windfall they were unable to obtain in the legislative process.”
“This is a big change from the status quo, and it can be a financial loss for some practices,” said Erin Duffy, PhD, a researcher at the USC Schaeffer Center for Health Policy and Economics and an academic at USC -Brookings. Schaeffer Initiative for Health Policy. “So I’m not surprised to see legal challenges.”
The staff of the TMA General Counsel wrote in an email to Medpage today, via a public relations representative, “TMA’s claim in the lawsuit is that the court remove the rebuttable presumption from the rule and, instead, restore the fair and balanced dispute resolution process created by Congress. “
The TMA argues that independent arbitrators should take into account equally – instead of prioritizing the median rate – all factors that may influence the price of medical services. These include the level of training or expertise of the provider, the provider’s market share in the region, the “acuity” of the patient or difficulty in providing the service, the status of the establishment. who provided the service, and previous efforts by the provider to enter into a network agreement.
The lawsuit is a larger debate about the cost of health care and who should determine the price. With balance billing or surprise bills, providers can and do get paid more for a service than they would on the network, because the patient ends up covering the difference.
The new law, which takes the patient out of the equation, leaves providers to fight with insurers or resort to arbitration. The use of QPA to set prices marks “a substantial change in the landscape for the compensation of licensed practical and emergency physicians,” said Duffy.
Regulators argue that with a focus on QPA, off-grid tariffs will become more predictable over time, which will ultimately discourage recourse to the arbitration process. But the TMA says the rules “undermine the ability of providers to get adequate reimbursement for their services” at a time when they “face limited resources as they battle the virus.”
The TMA also argues that the focus on eligible payment amounts “will make it more difficult for patients to access care by lowering reimbursement rates and encouraging insurance companies to continue to restrict their networks.” .
In other words, they argue that because off-grid physicians could make less money, they would leave the workforce (or fewer enter), leaving fewer physicians for patients to access. “I haven’t seen quantitative evidence of surprise billing laws leading to a doctor shortage,” Duffy said, “but it’s a common concern that’s raised by medical associations.”
In states that have implemented their own surprise billing laws, such as New York, regulatory guidelines dictated that arbitrators prioritize not the QPA but the 80th percentile of fees, or the high end of the fee. what off-grid providers would normally ask for. An arrangement like this could mean a higher payment for emergency and auxiliary physicians.
The drop in payments for off-grid providers is exactly what TMA worries about, Hyman says. In the case of California, for example, which passed a surprise billing law that fixed reimbursement amounts based on average rates in the insurer’s network, “there was downward pressure on payments.” , Hyman said. “But, you know, if your baseline is, ‘I’m cheating you right now and I can’t do this anymore’, that’s exactly what you’re trying to do, thank you very much.”