Surprise Medical Billing Update
Surprise Medical Billing Update
by Christoper E. Condeluci, Principal and sole shareholder of CC Law & Policy PLLC in Washington, D.C.
The Federal Portal Is Finally “LIVE” After Being Delayed for Over a Month-and-a-Half
- The delay was due in part to the Texas District Court ruling, but also due to technology challenges experienced by the Departments.
- Analysis: So now – on account of the month-and-a-half delay – there are hundreds of payment disputes where the 30-business day “Open Negotiation Period” has ALREADY expired, and there are many more disputes where the 30-business days will be exhausted SOON. This means that there is going to be a FLOOD of disputes that will inundate the Federal Portal – as well as the Federal arbiters (i.e., Independent Dispute Resolution Entities (IDREs)) – over the next couple of weeks. Why over the next couple of week? Because the Departments are giving those parties that ALREADY exhausted their “Open Negotiation Period” 15 business days from April 15th to start the Federal arbitration process. This means they have until May 6th. For everyone else whose “Open Negotiation Period” ended – or will end – AFTER April 15th, the parties only have the normal 4 business days to initiate arbitration. One question that both providers and payers have raised: Will the Federal Portal be able to handle the FLOOD of disputes to be resolved? I am NO tech expert, but I do know that internet websites can get overloaded due to increased activity. BUT, will such increased activity crash the Portal? Probably NOT. Why? Because – on at least 3 occasions now – the Federal Departments have told stakeholders (i.e., providers, payers, and IDREs) that much of the Federal arbitration process will be run OUTSIDE of the Federal Portal. For example, while the party initiating the Federal arbitration process must submit a “Notice of IDR Initiation” THROUGH the Federal Portal, the initiating party MUST ALSO send this “Notice” to the non-initiating party OUTSIDE of the Portal. The non-initiating party CANNOT access any of the information the initiating party uploaded on the Portal. In addition, the “fees” that are required to be paid to the IDRE for hearing a particular dispute CANNOT be paid through the Federal Portal. Instead, the provider and the payer will pay the IDRE OUTSIDE of the Portal (in most cases, on the IDRE’s own website). Also, providers and payers must submit – via email – their “offers” (as well as supporting evidence like the provider’s “credible information” and whatever a payer wants to give the IDRE a heads up on) directly to the IDRE, and NOT through the Portal. Here, the IDRE will first send an email to the provider and payer – OUTSIDE of the Portal – instructing them to email their “offer” and supporting evidence directly to the IDRE. There are other nuanced aspects of how the Federal Portals works – and does NOT work – that I can delve into the weeds on, but in the interest of time and space, let me simply say this:
- The bottom-line is that while the Federal Portal is NOW “live,” the Portal will have limited functionality, which will make it even more difficult to resolve the hundreds/thousands of payment disputes that are piling up.
- ALSO, it is UNLIKELY that this “limited functionality” problem will be resolved any time soon, which means that the next 3 to 6 months are definitely going to be ROCKY when it comes to resolving disputes through the Federally-developed arbitration process.
Did the Federal Departments Issue “Updated” Guidance on the Federally-Developed Arbitration Process?
- Well, kind of…
- Analysis: I told you in my last update (see below) that the Federal Departments hosted a webinar for stakeholders where the Departments explained how the Federally-developed arbitration process is supposed to work in light of the Texas District Court ruling (which invalidated the “rebuttable presumption” standard). As I explained in my last update (again, see below), at NO point did the Departments say that an IDRE must give EQUAL WEIGHT to (1) the Qualifying Payment Amount (i.e., the median in-network rate for a medical item or service) AND (2) the “credible information” submitted by a provider (e.g., the provider’s training and education, patient acuity and complexity of the rendered service, and other factors like efforts to ask the provider to join the network). I also explained (below) that the Departments NEVER said that an IDRE is PROHIBITED from assuming – on their own – that the Qualifying Payment Amount (i.e., the median in-network rate) should represent the final payment amount. ALL the Departments told us is that an IDRE MUST consider (1) the Qualifying Payment Amount AND (2) the “credible information” submitted by a provider as the relevant factors when determining what a final payment amount should be. I am telling you all of this AGAIN because – when it comes to this “updated” guidance – a lot of people are STILL confused about (1) what arbitration factors an IDRE is required to consider and (2) how an IDRE should make their final payment determination.
Sooooo, What About This “Updated” Guidance?
- The reason I am taking such a hard-line on this so-called “updated” guidance is because I do NOT see it as much of an “update.” Maybe a “refresh,” but NOT an “update.” Here’s what I mean:
- Analysis: Back in December 2021, the Federal Departments released a 40 page document that explained how the surprise billing “payment process” worked, including the Federally-developed arbitration process. In that original 40 page document, the Federal Departments explained how the “rebuttable presumption” standard worked (i.e., telling IDREs that they MUST presume that the Qualifying Payment Amount represents the final payment amount (or at least pick the closet “offer” to the Qualifying Payment Amount)). WELL, as stated above (and below), the Texas District Court invalidated the “rebuttable presumption” standard. As a result, this REQUIRED the Federal Departments to respond by taking out any references to – and explanations of – the “rebuttable presumption” standard in any official documents or pronouncements the Departments released on the surprise billing rules. And that’s ALL that the Departments did: They responded to the Texas ruling by removing any references to – and explanations of – the “rebuttable presumption” standard in their original 40 page document. So again, at least to me, that is NOT necessarily “updated” guidance on the Federally-developed arbitration process. It’s merely a “refresh” of an official document previously released by the Departments (which you can find here). Last comments: Even if I should be referring to this as “updated” guidance, I am still shining a light on this because A LOT of people are STILL getting it WRONG. Again, this “updated” guidance did NOT say that IDREs must give EQUAL WEIGHT to (1) the Qualifying Payment Amount AND (2) the “credible information” submitted by a provider. IN ADDITION, this “updated” guidance did NOT prohibit an IDRE from assuming – on their own – that the Qualifying Payment Amount should represent the final payment amount. Instead, this “updated” guidance is merely taking out references to – and explanations of – the “rebuttable presumption” standard. Why? Because the Texas District Court said so.
Anything Else to Report on Surprise Billing?
- Analysis: Earlier this year, the Federal Departments said that we should all expect – by May 2022 – FINAL regulations on the surprise billing requirements (i.e., regs finalizing the Interim Final Rules (IFRs) that were issued on July 1st and Sept. 30th of last year). WELL, the Departments just told stakeholders that FINAL regs will NOT be out until Summer (they actually said “early Summer”). BTW, I would NOT be surprised if these FINAL regs slipped all the way to the Fall. Why did the Departments push back the release date? I think the MAIN reason is because – to date – NO ONE has used the Federally-developed arbitration process yet (due to the delay in the Federal Portal). Which means, the Federal Departments do NOT have any data or experience on how the arbitration process actually works in practice. Soooooo, the Departments really don’t know what aspects of the process they may need to modify, or to clarify, or to change in whole in the forthcoming FINAL regs. All the Departments know right now is that the “rebuttable presumption” standard is GONE. They really have NO idea how and whether the Federal Portal will work, especially with its limited functionality. As a result, I really think the Departments said, “Hey, we need some time to see how the process plays out here before we can even consider finalizing last year’s IFRs.” IN ADDITION, I think the delay is due to the ongoing litigation in the DC District Court. It’s likely that the Departments want to hear what that Court has to say on the “rebuttable presumption” standard (there is an expectation – at least among outside stakeholders – that the DC District Court could differ with the Texas Court and find that the “rebuttable presumption” standard is valid). BUT, there is a strong likelihood that we will NOT see a ruling from the DC District Court anytime soon. During oral arguments, the DC District Court judge said that he wanted to wait until AFTER FINAL regs were released to issue the Court’s decision because he believes that regardless of what his ruling says, the FINAL regs will be challenged in court too. Sooooooooo, we wait…
FAQs Describing How “Alternative Reimbursement Arrangements” Should Disclose Information on their In-Network File
- On April 19th, the Federal Departments issued Frequently Asked Questions (FAQs) on how “alternative reimbursement arrangements” like bundled payment and capitation arrangements; reference-based pricing (RBP) arrangements with NO network; RBP arrangements WITH a network; and value-based purchasing should disclose pricing information on their public-facing websites, as required by the Transparency In Coverage regulations.
- Analysis: As I – and others – have explained, insurance carriers and self-insured plans MUST disclose their in-network rates for medical items or services covered under the policy/plan on a public-facing website on a “machine-readable file.” Such rates may include (1) negotiated rates, (2) underlying fee schedule rates, or (3) derived amounts. This file is known as the “In-Network File.” The Federal Departments acknowledge that – in many cases – the “alternative reimbursement arrangements” discussed above may NOT have a dollar amount associated with a particular item or service BEFORE the item or service is rendered. HOWEVER, the Departments believe that – in many cases – these arrangements can STILL develop a dollar amount that can be disclosed on an arrangement’s In-Network File. In particular, the Departments explain that even in cases where adjustments are made AFTER a medical service is rendered, the arrangement SHOULD disclose the base negotiated rate on the In-Network File BEFORE any adjustments are applied. HOWEVER, the Departments NOW recognize that for some of these “alternative reimbursement arrangements,” disclosing an accurate dollar amount BEFORE the medical item or service is rendered may STILL NOT be possible. The Federal Departments actually gave the following example:
- In cases where an arrangement pays a provider a “percentage-of-billed-charges,” the dollar amount for this payment can ONLY be determined RETROSPECTIVEY, meaning, there is NO WAY for this arrangement to disclose – IN ADVANCE – the actual dollar amount that the arrangement will pay for the medical item or service. HOWEVER, the Federal Departments said that they STILL want some form of a disclosure on the In-Network File even in cases where there is a negotiated “percentage-of-billed-charges.” Sooooooo, the Departments said in a Q&A the following:
- In cases where an arrangement pays a provider a “percentage-of-billed-charges,” the arrangement MUST disclose on the In-Network File the actual percentage that the arrangement will actually pay. For example, if a negotiated arrangement pays 70% of billed charges, this arrangement MUST spell out this “70% of billed charges” base negotiated rate on the In-Network File. In a 2nd Q&A, the Federal Departments addressed a scenario that has been driving insurance carriers – but mostly self-insured arrangements – NUTS. And that is, in some cases, the machine-readable file format (or “schema”) that the Federal Departments have developed does NOT include inputs (or “fields”) that allow the arrangement to fully explain what their “derived amount” may be for a particular medical item or service. In other cases, to fully explain how the arrangement developed their “derived amount,” additional information is needed to understand what the arrangement will actually pay. In these cases, the Departments said the following:
- These arrangements should include – in an “open text field” on the In-Network File – a description of the formula, variables, methodology, or any other information necessary to understand how much the arrangement will pay for a particular item or service. I interpret this 2nd Q&A as saying that unless your arrangement truly has NO provider network, your arrangement SHOULD include – in this “open text field” – a description of the formula, variables, methodology, or any other information necessary to understand how much your arrangement will pay for a particular item or service.
Based on my read here, I do NOT think that you can continue to say that you are UNABLE to comply with the disclosure rules because the Federally-developed machine-readable file schema CANNOT accommodate what you do. You MUST disclose, even if you have to write out 5 sentences describing how you determine how much you are going to pay a provider for rendering a particular item or service.
When Will We See an Extension of the “Enhanced Premium Subsidies”?
- Congress is now back from their 2-week Easter recess. And now that Congress is back, a number of House and Senate Democrats are saying that they MUST enact at least a portion of the now defunct “Build Back Better Act” (now the re-branded “Building a Better America Act”).
- Analysis: These Democratic members – along with Democratic Leadership – are saying that due the upcoming mid-term elections, they ONLY have until Memorial Day to get the “Building a Better America Act” to President Biden’s desk. If things slip past Memorial Day, there is an expectation that any legislative work will interfere with campaigning for Nov. 8th. Also, Democrats want something to “run on” when they campaign during August recess and throughout the Fall, and they want that “something” to be the “Building a Better America Act.” If Memorial Day is indeed the next, new “deadline,” this means that we should all expect an up-tick in discussions – and reporting – about renewed efforts to pass the “Building a Better America Act” in the coming days and weeks. At this point, I can’t really say that I know the exact contents of the “Building a Better America Act.” BUT, as I have explained previously, it is paramount for Congressional Democrats and President Biden to extend the “enhanced premium subsidies.” Democrats also wants to see climate change reforms. As a result, at least as of this 25th day of April, if we are ever to see final text of the “Building a Better America Act,” the betting-man in me thinks that (1) an extension of the “enhanced premium subsidies” AND (2) climate change reforms WILL BE PAIRED WITH (3) a corporate income tax increase (to 25%) AND (4) drug pricing reforms. The former changes “spend $$,” while the latter changes “pay for spending the $$.” Grab your popcorn as we watch how the next 6 weeks play out. Note, if your #1 priority happens to be extending the “enhanced premium subsidies,” I could see Democratic Leadership looking to add the extension to the Ukraine funding bill that Congress will consider this week and next. HOWEVER, these efforts will go NOWHERE in the Senate. As a result, any push for an extension here will fall flat. Which brings us back to the “Building a Better America Act” as one of last possible ways the “enhanced premium subsidies” could be extended (that’s, of course, if the Act can get across the finish line by Memorial Day). If that fails, the last-last option is the “lame duck session” (after the mid-term elections), which is a long-shot, but NOT impossible. As I have explained previously, however, waiting to extend the “enhanced premium subsidies” until AFTER the mid-term elections does NOT help Democrats get much-needed votes on Nov. 8th. Legacy, yes. But at the expense of losing a majority/majorities? Stay tuned…