by Christoper E. Condeluci, Principal and sole shareholder of CC Law & Policy PLLC in Washington, D.C.
Is It $3.5 Trillion or $1.5 Trillion? Maybe $1.9 Trillion or $2.3 Trillion?
- That’s been the debate among Congressional Democrats and President Biden for the past 3 weeks. Moderate Democrats like Sens. Manchin (D-WV) and Sinema (D-AZ) are saying they CANNOT support a $3.5 trillion package, and progressive Democrats – along with the President – have been pressing Manchin and Sinema to give them “a number.”
- Analysis: Sen. Manchin finally responded with “a number” – $1.5 trillion. Well, that went over like a ton of bricks. Progressives went NUTS, contending that a $1.5 trillion is waaayyyy too small, which prompted responses from moderate Democrats like: We are talking trillions of dollars – with a T. We haven’t even spent the trillions of dollars we enacted in response to the COVID pandemic. How can we look our kids in the eyes after we have saddled them with trillions of dollars in debt? Which then prompted responses from the President and progressive Democrats like: The entire “Soft Infrastructure” Package will cost $0 because we will raise the necessary revenue/reduce government spending to cover the trillions of dollars in spending. Which opens up another can-of-worms. Tax increases are being proposed to foot the bill. Also, allowing the Federal government to negotiate prescription drug prices for Medicare, and even for private employers. Each of these ideas – which do indeed bring in/save billions upon billions of dollars – are being questioned, however, by various segments of the Democratic caucus, but primarily by moderates in the House. Which brings me to make the following last points: At least 3 weeks have gone by where Congressional Democrats and the White House have battled over “a number.” Congressional Democrats and the White House have NOT yet even begun to fight over “the substance.” This is super important because when it comes to “the substance,” the fights over the nitty-gritty of “the substance” take the MOST time. Soooooo, if you think this soap opera is going to end by Oct. 31st, sit back down and refill your popcorn. Speaking of Oct. 31st, this is the new date that Speaker Pelosi has set for a vote on both the “Hard Infrastructure,” as well as the $3.5/$1.5/$1.9/$2.3 trillion “Soft Infrastructure” Package. If you recall, Sept. 27th was a set date for the House to vote on the “Hard Infrastructure” Package. BUT, as you know, that vote did NOT happen due to this ongoing battle over “a number.” Stay tuned as the debate over “the number” continues. Once resolved, then the fight over “the substance” will begin. Once we get into “the substance,” you may want to order some bourbon with your popcorn…
Surprise Medical Billing Update
The IFR Detailing How the Federally-Developed Arbitration/IDR Process Will Work Is Finally Here
- As I have explained in prior updates, the new surprise medical billing requirements for providers and payers (i.e., insurance carriers and self-insured plans) can be characterized as a “payment process,” which I have dubbed the “surprise billing payment process.”
- Analysis: This “process” can further be compartmentalized into different periods of time – or “timeframes.” Under each timeframe, there is a specified number of days during which either the payer, the provider, or both have “to do something.” The Federal Departments – in the July 1st IFR – went so far as to explain things this way:
- The No Surprises Act established 3 timeframes to ensure that billing disputes related to an emergency out-of-network situation or cases where an out-of-network provider furnishes a medical item or service at an in-network facility are resolved in a timely fashion. These timeframes include: (1) Making an Initial Payment or sending a notice of denial of payment; (2) The “Open Negotiation Period;” and (3) The Federally-developed arbitration/IDR process following the “Open Negotiation Period.” The July 1st IFR spent a great deal of time detailing the first 2 of these 3 “timeframes.” In other words, the July 1st IFR talked about how payers will make an Initial Payment or send a denial of payment (under Timeframe #1) and how payers and providers will negotiate with each other during the “Open Negotiation Period” (during Timeframe #2). The Sept. 30th IFR – while spending a great deal of time explaining how Timeframe #3 will work (i.e., the Federally-developed arbitration process) – provides some important clarifications and additions to Timeframe #2 (i.e., the “Open Negotiation Period”). We will start here…
The Sept. 30th IFR – The “Open Negotiation Period”
- According to the July 1st IFR, once a payer decides to make an Initial Payment or send a notice of denial of payment, the carrier/plan and provider may – over a 30-day period – enter into an open negotiation to attempt to resolve any dispute over the difference between (1) the amount billed by the out-of-network provider for the medical items or services that were furnished and (2) the amount the patient already paid to the provider (plus any Initial Payment, if paid by the carrier/plan).
- Analysis: Importantly – according to the Sept. 30th IFR – the 30-day period noted above does NOT begin until (1) the provider “receives” the Initial Payment or denial of payment AND ALSO (2) the provider sends an “Open Negotiation Notice” to the carrier/plan indicating that the provider wants to negotiate. The Sept. 30th IFR further explains that the provider has 30 days to send this “Open Negotiation Notice” to the payer. In other words, there is a 30-day period BEFORE the 30-day “Open Negotiation Period” can even begin. Stated another way, the 30-day “Open Negotiation Period” CANNOT begin until AFTER an “Open Negotiation Notice” is sent, where this Notice can be sent over a 30-day period which begins when the provider “receives” an Initial Payment or a denial of payment. Here’s an exaggerated example illustrating this: If a provider “received” an Initial Payment from a payer on Oct. 1st, the provider could wait until Oct. 29th to send an “Open Negotiation Notice” to the payer. Once sent on Oct. 29th, the 30-day “Open Negotiation Period” will begin, ending 30 “business days” later. I put “business days” in quotes above because the Sept. 30th IFR clarifies that each of these 30-day periods within the “Open Negotiation Period” are measured in “business days,” which are Monday through Friday, not including Federal holidays. So, in our example above, assuming that Veterans Day (Nov. 11) and Thanksgiving (Nov. 25) are Federal holidays, the “Open Negotiation Period” would end on Dec. 13th, again assuming the “Open Negotiation Notice” was sent on Oct. 29th.
Sept. 30th IFR – Last Few Comments on the “Open Negotiation” Period
- I said an “exaggerated example” above because I doubt a provider would ever let 29 days go by without trying to get paid. Soooooo, I would expect that a provider would send an “Open Negotiation Notice” to the payer ASAP after “receiving” an Initial Payment or a denial of payment (e.g., 1 or 2 days after “receiving” the Initial Payment or the denial).
- Analysis: Note, when a carrier/plan sends an Initial Payment or denial of payment to the provider, the carrier/plan must include a statement – in writing – that if the provider wishes to initiate a 30-day “Open Negotiation Period,” the provider may contact the appropriate person (whose contact information MUST be included in the statement) to begin the negotiating process. Also, when, for example, the provider wants to initiate the “Open Negotiation Period,” the provider must – as noted above – send an “Open Negotiation Notice” to the payer. This Notice must (1) identify the items or services subject to negotiation, (2) the date the item or service was furnished, (3) the service code, (4) the Initial Payment amount (if any), (5) the contact information of the party sending the Notice, and most importantly, (6) an “offer” of a payment amount the provider wants to receive from the carrier/plan. This “Open Negotiation Notice” may be sent electronically to the payer if the provider has a “good faith belief” that the payer can readily access electronic communications. The Federal Departments have developed a sample Notice for ease of administration. An “Open Negotiation Notice” must ALSO be sent to the Federal Departments. Interestingly, the Federal Departments created a Federal website – or Federal web portal – through which much of the surprise billing payment process will be run through. In the case of the “Open Negotiation Notice,” the Notice must be sent to the Federal Departments through this Federal portal. Importantly, the date on which the “Open Negotiation Notice” is sent through the Federal portal marks the date on which the 30-business day “Open Negotiation Period” begins. And lastly, if the payer and provider CANNOT come to an agreement during the “Open Negotiation Period,” either party may choose to take the other party to arbitration/IDR during the 4-business-day period beginning on the 1st day after the END of the “Open Negotiation Period” (i.e., the 31st business day after the START of the “Open Negotiation” Period). Importantly, the 30-day “Open Negotiation Period” MUST first be exhausted before arbitration/IDR can begin.
Sept. 30th IFR – The “Qualifying Payment Amount” Is the Primary Payment Factor
- The BIG news coming out of the Sept. 30th IFR is the confirmation that the “Qualifying Payment Amount” (which is the median in-network contracted rate for a medical item or service furnished is a geographic region) is the primary factor that an arbiter MUST take into account during the arbitration/IDR process.
- Analysis: More specifically, the arbiter MUST assume that this median in-network rate in the geographic region represents a reasonable market-based payment, and based on this assumption, the arbiter MUST consider that the final payment amount in arbitration/IDR should equal the median in-network rate (or the closest “offer” to the median in-network rate). The ONLY way an arbiter is permitted to come up with a final payment amount that is HIGHER than the median in-network rate is if – as the Federal Departments explained it – the provider submits “credible information that clearly demonstrates that the median in-network rate is materially different from what the appropriate payment amount should be in the particular out-of-network scenario.” In these cases, the arbiter must decide on a payment amount that best represents the value of the furnished medical items or services. A “material difference” exists where there is a substantial likelihood that a reasonable person with the training and qualifications of a “certified arbiter” making a payment determination would consider the information important in showing that the median in-network rate is NOT the appropriate payment amount in the particular out-of-network scenario that is being disputed. Let me say all of that a different way: The Sept. 30th IFR is saying that there is a rebuttable presumption that the median in-network rate should indeed be the final payment in any dispute between a provider and a payer. Why? Because – as stated by the Federal Departments – the median in-network rate represents a reasonable market-driven value. HOWEVER, the arbiter MUST ALSO look at additional information that the provider presents, and the provider can try to rebut the presumption that the median in-network rate represents a reasonable market-based payment (i.e., the provider can try to prove that the median in-network rate is WRONG). If and only if the additional information presented clearly demonstrates that the median in-network rate is “materially different” from an appropriate payment amount, can the arbiter deviate from choosing the median in-network rate (or an amount close to it) as the final payment amount. Having said all of that, let me say this: The Sept. 30th IFR has just confirmed that providers have a REALLY REALLY high bar to meet to convince the arbiter that the provider should get paid MORE than the median in-network rate. This is why the provider community has been going NUTs, NUTs, NUTs over the Sept. 30th IFR. Because the median in-network rate is typically LOWER than a provider’s billed charges which again, is the amount providers want to be paid (or at least an amount close to billed charges). Last comment: The Sept. 30th IFR clarifies that it is NOT the role of the arbiter to determine whether the median in-network rate has been calculated correctly. Rather, the arbiter must assume the median in-network rate is the appropriate final payment amount unless additional information is presented demonstrating that the median in-network rate is materially different from the appropriate payment amount in a particular case.
Sept. 30th IFR – The Process of Initiating the Federally-Developed Arbitration/IDR Process
- As stated, either a payer or a provider can initiate the arbitration/IDR process. In most cases, however, the initiating party will be the provider. That’s because the provider will want more money than what the patient paid them (remember, the patient is ONLY required to pay the provider (1) the median in-network rate (in cases where a State surprise billing law does NOT apply) or (2) whatever the State law requires the patient to pay (in cases where a State surprise billing law applies)).
- Analysis: 9 times out of 10, the amount the patient is required to pay the provider is going to be LOWER than the provider’s billed charges. AND, 9 times out of 10, even if a carrier/plan pays the provider an Initial Payment, this Initial Payment + whatever the patient paid is going to be LOWER than the provider’s billed charges. The Sept. 30th IFR explains that the party initiating arbitration/IDR (again, most likely the provider) MUST send to the non-initiating party (an insurance carrier or self-insured plan) a “Notice of IDR Initiation.” Similar to the “Open Negotiation Notice,” the IDR Notice can be sent electronically if the initiating party has a “good faith belief” that the non-initiating party can readily access electronic communications. The Federal Departments have developed a sample IDR Notice for ease of administration. Also similar to the “Open Negotiation Notice,” the initiating party MUST send the “Notice of IDR Initiation” to the Federal Departments through the new Federal portal. And also similar to the “Open Negotiation Notice,” the date on which the “Notice of IDR Initiation” is sent to the Federal Departments through the Federal portal marks the date the arbitration/IDR process begins. This beginning date is important because the initiating party MUST select a “certified arbiter” to resolve the dispute. AND, the non-initiating party MUST agree or object to the selection of the “certified arbiter” within 3 business days following the start of the arbitration/IDR process. If both parties CANNOT agree on a “certified arbiter” within these 3 business days, the initiating party MUST inform the Federal Departments through the Federal portal of the disagreement within 1 business day after the end of the 3-day period. The Federal Departments will then assign a “certified arbiter” by the 6th business day AFTER the start of the arbitration/IDR process (e.g., 2 days after being notified). If, for example, the non-initiating party does NOT believe that the Federally-developed arbitration/IDR process applies, the non-initiating party MUST notify the Federal Departments through the Federal portal within the 3 business days of the non-initiating party’s belief the Federal process is NOT applicable. This would happen in cases where an insurance carrier believes that a State’s surprise billing law applies – OR – in cases where a self-insured plan decides to “opt in” to a State’s surprise billing law (where the State law allows such an “opt in”).
Sept. 30th IFR – Submitting “Offers”
- BOTH the initiating and non-initiating party MUST submit to the “certified arbiter” their “offer” for payment within 10 business days of the selection of the “certified arbiter” (which could be 13 business days AFTER the start of the overall arbitration/IDR process or even 16 business days if the Federal Departments assign an arbiter).
- Analysis: This “offer” submission must be in the form of a dollar amount AND ALSO in the form of a percentage of median in-network rate (that is reflective of the dollar amount). Providers MUST also inform the “certified arbiter” of the size of the provider’s practice (i.e., how many employees) and if the provider is a specialty provider (if the provider is indeed a specialty provider). Insurance carriers and self-insured plans MUST inform the arbiter of (1) the carrier’s/plan’s coverage area; (2) the relevant geographic region for purposes of the median in-network rate; and (3) whether – in the case of a “group health plan” – the plan is fully-insured or self-insured.
Sept. 30th IFR – Final Payment Determinations
- Note, the provider and the payer are permitted to continue their “open negotiations” even during the arbitration/IDR process. If both parties agree to a payment amount AFTER the “Notice of IDR Initiation” was sent to the Federal Departments, but BEFORE the arbiter has rendered a final payment determination, the initiating party must notify the Federal Departments through the Federal IDR portal no later than 3 business days after the date of the agreement. Final payment must be made not later than 30 business days after the agreement is reached.
- Analysis: If there is NO agreement between the parties during the arbitration/IDR process, the arbiter MUST render a final payment determination 30 business days AFTER the “certified arbiter” is selected (which could be the 33rd day after the date the “Notice of IDR Initiation” was sent to the Federal Departments or the 36th day if the parties could not agree on an arbiter and the Federal Departments assigned one instead). Let me emphasize the following point: As noted, each party will submit to the arbiter an “offer” of what each party thinks the final payment amount should be. Under this so-called “baseball-style arbitration,” the arbiter is supposed to pick 1 of the 2 “offers” presented. However, I interpret the Sept. 30th IFR as saying that the arbiter does NOT necessarily have to pick the EXACT “offer” of either party. Instead, the arbiter is first required to pick an amount that IS the median in-network rate – OR – an amount that is close to the median in-network rate, which could be higher or lower depending on, for example, the payer’s “offer” (which could be lower than the median in-network rate). Alternatively, the arbiter could choose a final payment amount that is exactly what the provider “offered” or something close to this “offer,” depending on whether the provider successfully rebutted the presumption that the median in-network rate is the appropriate payment by proving to the arbiter that – based on additional and credible information – the median in-network rate is WAY OFF for purposes of the particular out-of-network service that is subject to the dispute. I will note, however, maybe my interpretation here is wrong. After all, in “baseball-style arbitration,” the arbiter is supposed to pick the initiating party’s “offer” – OR – the non-initiating party’s “offer,” and that’s it. But, it seems to me that because there is NOT any “exactness” (if that is even a word) to these surprise billing disputes, the arbiter appears to have the ability to float either above or below the median in-network rate – OR – the arbiter can choose an amount that is close to, but lower, than the provider’s “offer” if a “material difference” between the median in-network rate and the value of services can be proven.
Sept. 30th IFR – “Certified Arbiters”
- There are a ton of rules on whether and how an entity can become a “certified arbiter.” There are actually so many things an entity seeking to become a “certified arbiter” has to do to become “certified,” that I am actually wondering whether any entities out there are even going to be willing to go through the bureaucracy of getting “certified” in the first place.
- Analysis: By way of example, below is most of what an entity needs to do to get “certified”:
- Provide written documentation demonstrating that the entity has sufficient expertise and staffing to conduct payment determinations on a timely basis, and the entity is free of conflicts of interest; Be accredited by a nationally recognized and relevant accrediting body (such as URAC) or otherwise ensuring that the entity’s personnel possess the requisite training to conduct payment determinations (e.g., providing documentation that personnel employed by the entity have completed arbitration training by the American Arbitration Association (AAA), the American Health Law Association (AHLA), or a similar organization); Ensure policies and procedures are in place to maintain confidentiality of individually identifiable health information; Provide a fixed fee for single determinations and a separate fee for batched determinations; Have a procedure in place to retain entity fees and retain and remit administrative fees; Meet appropriate indicators of fiscal integrity and stability, evidencing its ability to collect and transmit the information required to be reported to the Departments; and Properly carrying out the requirements of the Federal IDR process in accordance with the law. I know that there are some government contracting-type companies that serve as arbiters in States where there is a State surprise billing law on the books. But WOW, I can’t see why these companies would want to go through all of the above to become a “certified arbiter” for the Federal arbitration process. Especially because the fees for serving as a “certified arbiter” are low-dollar. For example, the Sept. 30th IFR informs us that there is a $50 non-refundable fee that both the initiating and non-initiating party must pay at the beginning of the arbitration/IDR process. Also, recently released guidance confirms that a “certified arbiter” is only allowed to charge between $200 and $500 to review a particular dispute. Now, maybe there will be a high-volume of disputes that a “certified arbiter” can adjudicate (and get paid say $400 a pop), which may make it worth it for the company to seek to become a “certified arbiter.” BUT, I suppose I don’t know enough to know how many disputes a particular “certified arbiter” will get selected to adjudicate. Also, maybe I am just ignorant when it comes to a company’s willingness to cut through the bureaucracy. Maybe these companies can do everything above in their sleep… Sticking with the “certified arbiter” issue, another thing to report is this: Providers and payers can actually petition the Federal Departments and argue that a particular entity that is seeking to become a “certified arbiter” should be DENIED a certification. Also, providers and payers can argue to the Federal Departments that an existing “certified arbiter’s” certification should be REVOKED. Here’s one more thing: The initiating party (e.g., the provider) AND the non-initiating party (e.g., the carrier/plan) must send a notice to the Federal Departments through the Federal portal that includes (1) the name of the “certified arbiter”; (2) the “certified arbiter” number; and (3) an attestation by BOTH parties (or by the initiating party if the other party has not responded) that the selected “certified arbiter” does NOT have a “conflict of interest.” The attestation must be submitted based on conducting a conflicts of interest check using information available (or accessible using reasonable means) to the parties (or the initiating party if the other party has not responded) at the time of the selection. Do providers really want to “conduct a conflicts of interest check”? Won’t this be crazy onerous to do? If “conducting a conflicts of interest check” will be crazy onerous, this is certainly another DISINCENTIVE to initiating the Federally-developed arbitration process in the first place. Maybe the Federal Departments are trying to purposefully make the Federally-developed arbitration process so UNATTRACTIVE so as to discourage a provider from taking a dispute all the way to arbitration (instead of trying to negotiate things out during the “Open Negotiation Period”). But again, maybe I am over-thinking this, maybe it will be easy to “conduct a conflicts of interest check” by simply looking at “available information.”
Sept. 30th IFR – Other Stuff
- There is a lot of other stuff in the Sept. 30th IFR that I cannot fully cover in the limited space I have left here. BUT, let me make these last 3 comments:
- Analysis: As I explained when summarizing the statute, there is a “90-day cooling off period” that is intended to prohibit providers (and payers) from habitually utilizing the arbitration process to resolve payment disputes. The Sept. 30th IFR confirms that an initiating party may NOT submit a subsequent dispute with the same other party for the same or similar item or service within 90-calendar days of the final payment determination of an arbiter for a particular dispute. In addition, there are rules relating to “batching” multiple claims. For example, multiple claims may be “batched” together and considered as part of one payment determination, but only if (1) the items and services are billed by the same provider; (2) payment for the items and services are made by the same self-insured plan; (3) the items and services are the same or similar items or services (e.g., billed under the same service code or comparable code); and (4) the items and services were furnished within the same 30-business-day period or 90-day period in cases where the “cooling off period” applies. Lastly, the Federal Departments are required to report information related to the Federally-developed arbitration process on a public website for each calendar quarter in 2022 and each calendar quarter in subsequent years. To ensure that the Departments have the information needed to satisfy this requirement, a “certified arbiter” must – within 30 business days of the close of EACH month – send through the Federal Portal data and information like (1) the number of “Notices of IDR Initiation” submitted during the immediately preceding month; (2) the size of the provider or facility submitting “Notices of IDR Initiation;” and (3) the items and services subject to the dispute, the relevant CPT, HCPCS, DRG codes, or National Drug Codes, and the relevant geographic region. Again, to me, this is yet another thing a “certified arbiter” is required “to do” to become certified. I see this – and all of the stuff above – as reasons why an entity would NOT want to become a “certified arbiter.”