In 2020, the No Surprises Act (NSA) it was approved to protect commercially insured patients from receiving unexpected bills when insurers are out-of-network with doctors. Before the NSA, out-of-network billing occurred when medical groups and insurers couldn’t agree on fair in-network rates. When a doctor treated a patient who was not covered by an in-network contract and the insurer paid less than the doctor considered fair, the doctor may bill the patient for the difference between the amount paid and the fair amount. Insurers called this “surprise medical billing.” Doctors called this a “surprise coverage gap.”
Before the NSA, these situations occurred in about one in 20 patient visits to emergency services (ED). In the creation of the NSA, both providers and payers wanted to protect patients, but they diverged on how to do it. Providers were concerned that the NSA would allow payers to set rates. Taxpayers wanted the law to give them control. Congressional leaders attempted to craft legislation to balance these interests. The final compromise bill created an arbitration process for when providers and insurers cannot agree to a fair payment within a defined period where open negotiations between the two parties are allowed.
This new process for out-of-network bills allows three possible options for physicians. First, they can accept the out-of-network payment decided by the insurer. If they refuse, the doctor and the plan have 30 days to negotiate. If they cannot reach an agreement, both the doctor and the plan submit a final offer to the independent dispute resolution (IDR) process, where an independent arbitrator selects one of the two options within 30 days. This incentivizes both parties to give their best offer. Any unreasonable offer could lead to a worse outcome for that party.
The NSA’s Impact on Emergency Department Physicians, Payers, and Patients
Fortunately, the NSA protects patients as intended. However, it insidiously erodes doctors’ payments. This erosion is magnified for ER physicians, who rely heavily on commercial insurance to subsidize drastically lower payments from other payers. Emergency physicians are federally required to care for the uninsured or underinsured, regardless of whether they can pay through the Emergency Medical Treatment and Labor Act (EMTALA) 1986. Emergency physicians are Paid too little for care without insurance. Low-pay Medicaid patients are seen in increasing numbers. Medicare pays a little better, but payments are declining and have lagged inflation during the last 20 years.
The central question at the NSA is what constitutes a reasonable payment when doctors and payers are out of network. Several NSA factors determine fair pay: 1) provider training and experience, 2) parties’ market share, 3) prior contracting, 4) service complexity, 5) teaching status and case mix, and 6) ) the qualified payment amount (QPA) . The insurer establishes the QPA based on the average rate contracted within the network for similar services.
In rulemaking, clarification was made on how a referee should weigh these factors. early rules managed that the QPA be used as a presumptive payment. Physician groups objected that this unfairly benefits payers who can determine their own QPA through a non-transparent process. Not surprisingly, many payers have “calculated” as low a QPA as possible. This is accomplished by manipulating the regional median rate because the NSA does not define the geographic region used to calculate the QPA. Let’s say five regional medical groups have median fees of $100, $115, $230, $270, and $285. By adding just two more groups with rates of $120 and $135 by expanding the region, the QPA changes from $230 to $135 in favor of payers. QPA’s overweight in arbitrage allows insurers to set their own rates. This was not the intent of the law.
The NSA’s intent is for physician groups and payers to operate under in-network contracts. However, if the QPA is lower than an existing contracted in-network rate, insurers have a perverse incentive to cancel contracts. This forces doctors out of the network, increasing arbitration. If the insurers win the arbitrations, this can iteratively lower the QPA over time, resulting in a death spiral in emergency physician payments. Insurers are already using this strategy. In 2021, Blue Cross Blue Shield of North Carolina proposed in-network contract termination for physician groups unless they agreed to 15% payment reduction or offered a comparable counterproposal, citing the NSA as the reason. Similarly, United Healthcare proposed the termination of the doctors’ contracts unless they accepted a 40% pay cut.
There have been multiple lawsuits. In two closed cases, judges invalidated using QPA as the only standard for healthcare providers and for air ambulances. also cms directed referees consider more than the QPA, preserving the expected process of fair arbitration. he final rule it was released on August 19, 2022, with mixed results for doctors. He stated that the QPA is credible and should be considered. However, he also noted that it will often, if not always, be the correct out-of-network rate because it incorporates factors essential to determining a reasonable payment. If concerns arise about how the QPA was determined, the onus to file complaints falls on providers and facilities, which would be investigated by regulators. But until then, QPA is assumed to be correct.
The final rule also officially defined the practice of down-coding, where plans lower the level of service codes so they can pay less. Previously, insurers were not required to disclose whether their calculated QPA was based on down-coded claims, which is another way to artificially lower the QPA. In addition, the plans must explain why the claims are down-coded, describe which service codes were changed, and most importantly, what the QPA would have been if down-coding had not occurred.
So far, federal arbitration is being used a lot. according to a government report in the federal IDR process (April 15 to September 30, 2022), 90,078 disputes were initiated. This is a lot more disputes in 5.5 months than was anticipated all year. As of September 30, 2022, only one in four cases has been resolved. However, this number is misleading. Final payment determinations have been made in only 4% of disputes, with 18% found to be ineligible for federal IDR. Additionally, 84% of emergency and non-emergency service disputes were filed by physicians and 15% by health care facilities, with 81% of fee disputes related to emergency services. This is noteworthy considering that The fee to open a dispute increased from $50 to $350 as of January 1 of this year. These fees will be at the physicians and facilities.
Ultimately, the results for the NSA and its IDR are substantial delays in payments to ER doctors, often for months, as bills are locked up by payers in an administrative bottleneck. This makes the NSA a clear boon to payers, while also hurting ER doctors.
Towards a fairer implementation of the NSA
Patients or legislators may shrug when they learn that doctors are being paid less. However, the NSA’s reduction in physician salaries may cause even more highly educated, trained, and board-certified ER physicians to leave clinical practice. Many hospitals today are already facing a shortage of emergency physicians. Like nurses, ER doctors are not easy to replace. Undoubtedly, reducing emergency department medical staff will worsen emergency care, increasing waiting times and overcrowding in the emergency department. This will make patient care less safe and accessible.
While further legislative action on the NSA is unlikely, there is still room for improvement through ongoing FAQs and sub-regulatory guidance. The NSA protects patients while remaining fair in the face of a complex business arrangement between doctors, hospitals, and payers. However, some for-profit insurance companies appear to be using the NSA in ways that are inconsistent with their original intent due to lack of compliance. Policymakers must understand the potential impact of these policies and act to protect our vital safety net by auditing the QPA and ensuring that the arbitration process is fair. In January 2023, a letter outline details The American College of Emergency Physicians and the Emergency Department Practice Management Association sent specific solutions to HHS Secretary Xavier Becerra, Labor Secretary Martin Walsh, and Treasury Secretary Janet Yellen on how to level the playing field between ER physicians and payers. . It is up to policymakers to lead the charge and act to ensure that patients remain protected and that the nation’s emergency care system remains robust and viable.
Dr Nishad Rahman, He is a Clinical Innovation Fellow at US Acute Care Solutions and a practicing ER Physician at Sinai Hospital – LifeBridge Health in Baltimore. Jonathan J. Oskvarek, MD, MBA, is director of research and clinical instructor in emergency medicine and a practicing emergency physician at Summa Health in Cleveland, Ohio. Jesse M. Pines, MD, MBA, MSCE, is the national director of Clinical Innovation at US Acute Care Solutions and a professor of emergency medicine at Drexel University. He works as an emergency physician at Allegheny General Hospital in Pittsburgh and George Washington University Hospital in Washington, DC.