Surprise bills, be gone!
Spooky season may be over, but the holiday season is here, and we still hope there’s some magic left in the air to rid patients of surprise bills after a surgery or other medical experience.
These happen when a patient receives care from a doctor or hospital that is not “in-network” with the patient’s insurance company. Often, insurers will cover far less of a medical bill, sometimes nothing at all, if a provider is out-of-network.
Okay, so it must be easy to tell who is in-network or out-of-network, right? Wrong. Insurers contract with physician groups and hospitals differently, at different times of year, and can change up your network mid-year with little more notice than a letter in the mail.
As a result, patients often unwittingly receive out-of-network care. Congress recognized that this situation didn’t make sense – the insurance company and the hospital needed to work out the billing situation, not the patient.
Magically, that just might happen when the No Surprises Act takes effect on January 1, 2022. The new regulation attempts to keep patients from getting stuck in the middle when payors and providers can’t work things out.
The No Surprises Act states that patients will only pay what they would have owed if the doctor was in-network, leaving any remaining balances to be negotiated between the insurance company and the doctor or hospital within 30 days. That negotiation is called an arbitration process.
Great. But is the Biden administration playing favorites? When it comes to issues between insurers and providers, it certainly feels like it.
When the law was passed, it seemed like Congress had found a good solution. Insurance companies had to pay in-network rates, and a dispute resolution process was outlined to consider each situation and ensure all factors are accounted for in the arbitration.
But a new rule dropped on October 1. And in the words of the American Medical Association, the No Surprises Act is “an undeserved gift to the insurance industry.”
Now, both sides put forth their best offer, and the new rule requires the arbiter to “pick the amount closest to the median in-network rate negotiated by insurers for that type of care.”
It’s basically a numbers tug-of-war, and it might weight the scale toward insurance companies.
Prices range for a variety of reasons, including experience of provider, type of hospital, and complexity of case. While these factors are allowed to be considered in the arbitration, they are not given “equal weight.”
Proponents say this is a good thing, because it keeps providers from over-charging. Even so, the article also acknowledges that relying on the median in-network price will likely cut payments to many doctors and hospitals.
In an attempt to solve one problem, Congress may have created another: the rule gives insurers the incentive to push higher-paid providers out-of-network to drive down that median rate, which could lead to everyone getting paid less.
Does this give insurers the incentive – and now the leverage – to manipulate the market? Guess we’ll just have to wait and see.