March 3, 2024
The Biden administration appeased healthcare providers in finalizing a rule to limit costly "surprise billing" for patients by allowing additional negotiation factors, such as a provider's experience or training, to be considered in out-of-network billing disputes.

The Biden administration appeased healthcare providers in finalizing a rule to limit costly “surprise billing” for patients by allowing additional negotiation factors, such as a provider’s experience or training, to be considered in out-of-network billing disputes.

The rule finalizes rules authorized by Trump-era legislation that protects patients from unexpected medical costs while passing the burden on to providers and insurers. Considering additional factors could prove advantageous for providers, who could argue that their training quantifies a bigger cut than the comparable median in-network rate for the medical service.

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These types of surprise bills being disputed typically occur when patients go to an in-network provider or facility but receive care from a physician who did not have a contract with the patient’s health plan, such as in emergency or specialized care like anaesthesiology, resulting in higher bills.

In-network providers are doctors, hospitals, and other healthcare providers that accept a person’s health insurance plan, while out-of-network providers do not.

It’s unclear how arbitrators will apply the updated rules in disputes and which party could be responsible for a bigger financial share under the updated rules.

Frederick Isasi, the executive director of Families USA, a nonprofit consumer health advocacy organization, said the latest regulations would “ensure fair payment to providers while discouraging abuse of the reimbursement negotiations process.”

The ERISA Industry Committee, an industry association for group health plans, argued that the final ruling “watered down” arbitration rules and would result in self-insured employer plan sponsors paying “inflated amounts to out-of-network providers.”

The first iteration of the rules from the departments of health and human services, labor, and treasury last October stipulated that the health plan’s median in-network rates in that geographic region should be considered the correct amount for out-of-network billing.

In numerous lawsuits, providers argued that earlier versions of the rules favored insurance companies, who are in charge of calculating the rate and should take into account additional factors. Earlier this year, a federal judge in Texas sided with the Texas Medical Association contesting the administration’s reliance on median in-network rates.

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The finalized regulations come over a year after the No Surprises Act passed in 2020, which protects patients from surprise charges and creates a Federal Independent Dispute Resolution process requiring out-of-network providers and insurers to dispute the rates for care.

In 2021, 87% of people said they were surprised by a medical bill they received, according to a report by InstaMed.

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