By Thomas LaGreca
The No Surprises Act (NSA) was one of the best recent examples of bipartisan legislation. Both Democrats and Republicans came together toward the end of 2020 ad passed the legislation as part of an omnibus spending bill between Christmas and New Year’s of that year, with President Trump signing it into law shortly thereafter. Both sides of the aisle could readily agree that patients, who never made a conscious, educated decision to be treated on an out-of-network (OON) basis should not be subject to OON coinsurances and balance bills. Indeed, patients treated in the ER by OON surgeons and facilities historically had the potential to go bankrupt by medical bills far exceeding their ability to pay. Where the parties departed company, however, was in the reimbursement scheme envisioned in the law.
The NSA contemplated that the patient would be treated as if the OON encounter was actually in-network (INN) and would be left out of the dispute between the carrier and the medical provider, and the medical provider would have the opportunity to arbitrate against the carrier. It seems there were two camps on what the standard of reimbursement should be for the medical community in the arbitration process established by the NSA. It seems there was general agreement that it would be baseball-style arbitration, which serves to bring the parties positions in the arbitration closer together, because the arbitrator must choose one side or the other with no compromising. This incentivizes parties to be less aggressive and ambitious in the arbitration because losing is absolute. A carrier paying too little or a medical provider demanding too much could find themselves at a complete loss. But the two camps separated as to the standard to be applied by the arbitrators.
One camp, apparently prioritizing the reduction of health care costs, preferred the California state “Surprise Bill” (SBL) model, which was based on a percentage of Medicare. The other camp preferred the New York state SBL model, which was based the “usual, customary, and reasonable” rates (UCR) applicable to the geographic area of treatment. It is not a coincidence that this is the same dichotomy we see in patient health plans where the reimbursement provisions in the better, more expensive plans pay OON medical providers at UCR and the cheaper, less beneficial plans pay OON providers a percentage of Medicare. The two positions were broadly divided on party lines, with the Democrats siding with the insurance industry in favor of a Medicare percentage for reimbursement, and the Republicans siding with the medical community in favor of a UCR-based reimbursement. The reason for this alignment likely is a result of the fact that 75%-80% of the physicians in Congress are Republicans.
So, how will the 2024 election results affect the NSA and how it is being implanted? In light of the Republican control of the Senate, the House, and the Presidency resulting from the 2024 election, I think it safe to say, that the outcome of the election bodes well for the medical community.
In addition to the party line differences noted above that surfaced during the deliberations, the rules promulgated by CMS to implement the NSA, rules that were declared on several occasions to be unduly favorable to the insurance industry and inconsistent with the NSA, were promulgated by Democratic-controlled regulators. Indeed, a federal district court in Texas, and, in large part, the 5Th Circuit Court of Appeals, on several occasions vacated the CMS rules. It is safe to say the Democratic-controlled Health & Humas Services Department, under which CMS operates, was no friend to the medical community during the first two years of the NSA. Clearly, 2024 is proving to be much more favorable to the medical community under the NSA due to the Texas courts and not CMS. Also, the most vocal critics of CMS during the 2022 and 2023 period, when hearings were conducted regarding the pervasive delays in resolutions under the NSA, were Republicans.
Though it is far from certain, the appointment of Robert F. Kennedy, Jr., albeit a Democrat, to head HHS, and Dr. Oz, a Republican, to head CMS, seems to bode well for the NSA being improved to make it more fair and equitable for the medical industry.
I might be a bit optimistic, but, based on all of the above, I expect the federal government to take up the issue of the NSA and its implementation, with the hope that the following shortcomings will be addressed:
- A mandate that CMS add whatever resources are necessary to enable the arbitrating bodies (IDRE’s) to render decisions consistent with the tight timelines required by the NSA.
- Enactment of an effective enforcement mechanism in the NSA that penalizes carriers for not paying awards within 30 days, and a provision that enables the dispute to be re-opened in the event the carrier defaulted and has a legitimate reason for the default.
- Enactment of a provision that expands the Independent Dispute Resolution (IDR) process to include medical denials of claims involving OON providers, which are excluded from the process currently.
- Enactment of a provision clarifying whether OON primary surgeon claims involving surgeries conducted at INN facilities are eligible for this process, whether or not the good faith estimates and disclosures called for under the law were conducted.
These are very important additions and clarifications that would go a long way toward improving the implementation of a law aimed at protecting patients from OON balance bills and at securing and maintaining an effective and properly compensated medical industry.