February 5, 2024

Are Insurers Ignoring Orders to Pay Surprise Billing Disputes?

In the ongoing battle against surprise medical bills, a new concern has arisen as doctors and healthcare providers claim that insurance companies disregard official orders to settle surprise billing disputes.

The No Surprises Act, crafted to mitigate unexpected out-of-network medical expenses, established an arbitration mechanism for insurers and healthcare providers to resolve billing disputes, keeping patients out of the process. However, the recent complaints from providers add to a series of issues faced by the arbitration system, which was implemented last year. This system's effectiveness is now being questioned as healthcare providers voice concerns about insurers failing to comply with arbitration decisions and, in some cases, withholding total payments as mandated by federal surprise billing regulations.

Let's delve further into the situation and explore the perspectives of different stakeholders.

What Doctors Have to Say?

A survey conducted by Americans for Fair Health Care, involving over 48,000 physicians across 45 states and various specialties, paints a concerning picture. It turns out that 33% of all claims weren't paid correctly, and 52% of the payment amounts determined through arbitration never made it to the providers. 

Another Emergency Department Practice Management Association study further underscores these worries, revealing that 91% of filed claims remain unresolved and have not yet been settled.

Many healthcare providers report that insurers refuse to honor arbitration awards, citing them as unenforceable and non-binding. Even leading medical trade groups have voiced concerns about their members not receiving these arbitration awards, which undermines the intended balance of the No Surprises Act and places further financial strain on healthcare providers.

Envision Health, a private equity-backed physician staffing company, has faced delays in receiving payments, with over 1,800 arbitration awards in their favor remaining unpaid past the mandated 30-day period. Having filed for bankruptcy, the company now waits an average of 135 days after an arbitrator's decision and over 340 days for its oldest award.

What Insurers Have to Say?

Insurers have expressed their concerns about how the arbitration system is operating. They argue that healthcare providers sometimes overload the process with what they consider unnecessary challenges to billing decisions. They say this can slow things down and make the system less efficient.

They're also unhappy with how arbitrators sometimes group multiple decisions, which, according to insurers, can lead to administrative delays. Insurers argue that things can get held up without detailed itemization of payment determinations.

In their view, it's essential to streamline the arbitration process, guarantee that all parties possess the required information, and establish a fair and transparent system that reasonably represents the interests of patients, providers, and insurers.

What Regulatory Agencies Have to Say?

The Centers for Medicare and Medicaid Services (CMS) and other regulatory bodies overseeing surprise billing, including the Department of Labor, the Department of the Treasury, and the Office of Personnel Management, have acknowledged receiving multiple complaints about delayed payments following arbitration.

A spokesperson for CMS confirmed that they are actively investigating these complaints and reiterated that the arbitration process is legally binding unless there is evidence of fraud. The investigations have revealed that late payments stem from various factors, including an unexpectedly high volume of payment determinations and missing information in payment determination letters issued by certified independent dispute resolution entities.

What Lies Ahead?

CMS has proposed a rule to adjust the fees associated with surprise billing arbitration. Under this proposal, the administrative fee to enter arbitration would increase from $50 to $150 per dispute.

Furthermore, CMS is considering expanding the range within which arbitrators can set their fees, allowing for a 20% increase for individual determinations and a 25% increase for bundled determinations. If all goes as planned, this proposal will likely be implemented for disputes initiated on or after January 1, 2024, or when the final rule takes effect, depending on the later date.

The Texas Medical Association (TMA) and several healthcare providers have taken legal action to challenge various regulations within the No Surprises Act (NSA). In December, CMS attempted to raise the fee for the independent dispute resolution (IDR) process, proposing an increase from $50 to $350. However, in August, a federal judge in Texas invalidated this proposal due to procedural concerns.

These legal challenges led to the temporary suspension of certain aspects of the federal IDR process. Nevertheless, on September 5, CMS instructed arbitrators to recommence eligibility and conflict of interest determinations for disputes submitted on or before August 3, 2023 and encouraged disputing parties to continue their negotiations.

GlaceRCM/EMR - Billing Service For Private Practice

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