2022 Surprise Billing Predictions: Lower In Network Fees & More Paperwork
Our 2022 Surprise Billing predictions are based on recent actions by insurers, medical societies and regulators.
2021 Surprise Billing Act Lessons
As everyone knows, major changes from the No Surprises Act (NSA) are scheduled for January 1.
The Act is going into effect despite concerns among providers that the current regulations could incentivize payers to set artificially low payment rates, creating more narrow provider networks and reducing access to care. These issues were debated when the legislation was drafted and again during the CMS rule making in the summer and fall of 2021. See “’No Surprises Act’ Rule: Physicians Lose” for the details.
- If enacted in its current state, the (No Surprises) rule will … “create an ad-hoc system of benchmarking which guarantees every patient in-network cost-sharing and in-network payment to physicians, while shutting physicians out of an independent dispute resolution process that accounts for their work and expertise in a meaningful way,” according to Dr. Daniel Guy, President of AAOS, the American Association of Orthopaedic Surgeons.
Most of the debate is about one specific aspect of the NSA: the “qualifying payment amount.” There is little debate about the other aspects of the legislation and the proposed regulations. See “No Surprises Impacts All Physicians in 2022” for the specific legal obligations placed on every provider.
It is important to note that all physicians (and hospitals) have obligations, even those who are fully in-network.
2022 Surprise Billing Predictions
In-Network Rate Reductions
It is clear that, if the No Surprises Act proceeds with the current CMS rules, physicians and hospitals must plan for much tougher contract negotiations, especially where current contract rates are favorable to the provider.
The concerns raised by physicians and hospitals during the CMS rule making process have already become a reality. We predicted this last summer (see “All Anesthesia Reimbursement Driven Down by Surprise Billing Law?”) when we thought these impacts would affect providers over the next several years, rather than this accelerated pace.
- In November, Blue Cross Blue Shield of North Carolina (BCBS) sent letters to anesthesiology and other practices in the state threatening contract termination unless the physicians immediately agree to lower payments by 10% to over 30%. This is according to the American Society of Anesthesiologists (ASA) and confirmed by BCBS. The No Surprises Act is cited numerous times in the letters as the reason for the reductions.
- As a first step, BCBS is asking for a 15% reduction by December 15 or a “comparable counterproposal”. If that is not agreed to, BCBS plans to “proceed with identifying and executing on terminations of outlier contracts…”.
In a press release, ASA President Dr. Randall Clark said,
- “Instead of expanding in-network access for patients, BlueCross BlueShield of North Carolina has demonstrated what we explained to Congress and the rule-making agencies would happen: Insurance companies will use their overwhelming market power and the No Surprises Act’s flawed rules to push more physicians out of insurance networks and fatten their own bottom line.”
- “The clear intent of the insurance company in taking this action is to improve its negotiating position against community physician practices in the dispute resolution process outlined in the recently released Interim Final Rule implementing the legislation.”
Partly as a result of the BCBS letters, on December 9, the American Medical Association, the American Hospital Association and several hospitals and providers filed a suit to block part of the NSA implementation.
- The lawsuit says that, as currently configured, CMS regulations implementing the Act will discourage insurance companies from reaching in-network agreements.
- Instead, the suit says, insurers will force providers to use the arbitration process which, many providers say is biased in favor of insurers. (See “’No Surprises Act’ Rule: Physicians Lose” for the background).
“Congress established important patient protections against unanticipated medical bills in the No Surprises Act, and physicians were a critical part of the legislative solution,” AMA President Gerald Harmon, MD, said in a statement. “But if regulators don’t follow the letter of the law, patient access to care could be jeopardized as ongoing health plan manipulation creates an unsustainable situation for physicians. Our legal challenge urges regulators to ensure there is a fair and meaningful process to resolve disputes between healthcare providers and insurance companies.”
The AMA, AHA lawsuit came after the Texas Medical Association filed a similar suit in November.
On December 22, the American College of Radiology (ACR), along with the American Society of Anesthesiologists (ASA) and the American College of Emergency Physicians (ACEP) filed a federal lawsuit in Chicago saying that the CMS regulations are not consistent with the language of the legislation and will ultimately harm patients and access to care.
- “The conscious decision by the White House to ignore the specific legislative language and intent of the No Surprises Act as the new law is implemented has empowered insurers to drastically cut reimbursement, narrow medical networks and restrict patient access to their chosen providers — including radiologists,” the ACR said in a statement.
Providers have support from some legislators, with 150 members of Congress reportedly pressuring CMS to modify the regulations to match their intent when the law was passed. At the same time, HHS Secretary Xavier Becerra has defended the final rule, urging providers to “tighten their belt.”
At this point in time (early January), there is no indication that the CMS regulations will get changed. It does seem possible that the regulations may be delayed due to the legal challenges.
Preparing for the No Surprises Act
Given the 2022 Surprise Billing predictions described above, physicians need to update and enhance the rationale and data they use in contract negotiations. This will be especially important where current rates are well above local market averages. While those averages are currently hard to determine, as arbitration cases start in the spring, the “qualifying payment amount” (QPA) should become known (defined as the median in-network rate in the local market). Where you are out of network, your payments and your patient copays, etc. will be based on the QPA, which should also provide visibility.
As we outlined last month in “No Surprises Impacts All Physicians in 2022”, all providers need to take action starting on January 1.
- All providers, even those fully in-network, must publish and publicize information about the No Surprises Act.
- Almost all out-of-network billing reimbursement and patient billing will be required to change.
- Any referrals or scheduled procedures for self-pay or uninsured patients will require a good-faith cost estimate.
- Billing must consider state as well as federal “No Surprises” legislation.
In December, CMS made several templates available to assist providers. They include forms for:
- Notifying self-pay and uninsured patients of their right to receive a good faith estimate of expected charges
- Generating a good faith estimate
- Tracking the data elements that are required in the good faith estimate
- Tracking required documents for the provider-patient dispute resolution process, which can be used when charges exceed the good faith estimate by at least $400
At the same time, HHS provided estimates of the time and cost overhead required to provide good faith estimates to uninsured and self-pay patients: either 30 or 60 minutes (!) to generate each good-faith estimate, depending on whether items and services also are needed from a co-provider or co-facility. CMS has said it will exercise “enforcement discretion” during 2022 when the estimate leaves out co-provider charges.