All Anesthesia Reimbursement Driven Down by Surprise Billing Law?
Will all anesthesia reimbursement be driven down by No Surprise Billing rules? Recent regulations to implement the “No Surprise Billing” act have raised alarms by “placing a thumb on the scale” to favor insurers. Without major changes, these rules may have a dramatic effect on out-of-network anesthesia reimbursement.
But a more insidious risk is lurking. In-network anesthesia reimbursement is likely to decline over time as anesthesia groups lose negotiating ground to commercial insurers. A recent JAMA Network study highlights and quantifies the risk.
- “The analysis found that prices paid to out-of-network anesthesiologists at in-network facilities and to in-network anesthesiologists decreased in California, Florida, and New York after each state passed comprehensive surprise-billing legislation.”
The JAMA study analyzed more than 2.5 million claims filed for patients with private health insurance who received anesthesia services in hospital outpatient departments and ambulatory surgery centers from 2014 to 2017 in the three states with surprise billing legislation during that timeframe.
The study concluded that “State surprise-billing legislation appears to directly lower out-of-network prices and indirectly lower in-network prices by changing payer-practitioner negotiating dynamics.”
Since, on average, anesthesia rates exceed Medicare rates by 330%1, more than any other specialty, it seems logical to assume that commercial insurers will target anesthesia providers for reductions. Implementation of the No Surprises Act will reduce anesthesia provider negotiating ability in at least two ways
- Out of network rates are likely to be driven toward the median in-network rate, reducing out of network reimbursement.
- During in network rate negotiations, the threat of a provider leaving an insurer’s network will be discounted.
These dynamics mean that anesthesia groups must be prepared to explain and defend their rates in compelling ways in order to minimize their effects on commercial reimbursement. Otherwise, all anesthesia reimbursement will be driven down.