Last December Congress passed the No Surprises Act. The law’s intent is to prevent surprise bills for a number of out-of-network medical services. As I said in my post last February, the devil will be in the details. The devil and his devilish details are here.
Reimbursement Rates
The devilish details start with how reimbursement rates for providers will be determined during arbitration. As a reminder, if the provider and payer can’t agree on a reimbursement rate, either party may request arbitration. The arbitrator determines the reimbursement rate. That’s pretty clear. But how will the amount be decided? That’s where the devilish details show up.
Federal law will determine calculation methods for reimbursement amounts. Except (devilish details often follow the word “except”) for the 18 states that already have surprise bill protection. In those cases, state law will determine payment methods. Except (there’s that word again!) for insurance plans regulated by federal benefit laws, which applies to most large employer plans.
Reimbursement Rates & You
Even though you won’t have to pay the amount decided in arbitration, your future health care rates could be impacted. According to a recent article from The Commonwealth Fund, your health care costs could go up depending on how these cases are settled in arbitration.
Currently, many insurance companies won’t pay more than in-network rates for out-of-network services. If the arbitrator decides the insurance company has to pay more than the in-network rate, your future costs could go up in two ways. First, out-of-network prices could increase. Second, providers could negotiate higher in-network rates because they can get more money for out-of-network charges. Higher in-network rates could mean higher premiums for you.
Some States Limit Reimbursement Rates
Remember those 18 states that already have some surprise bill protection? The good news is that seven of those states require arbitrators to use in-network rates or a percentage of Medicare rates when deciding the final payment amounts. Those requirements make it far less likely that arbitration decisions will increase future health care costs. Those seven states are:
- California
- Colorado
- Maine
- Maryland
- Michigan
- New Mexico
- Oregon
But even those state laws don’t protect you from all the devilish details that still need to be worked out.
Lobbying for Control Over the Details
The No Surprises Act left many devilish details undecided. So now special interest groups are lobbying lawmakers and others to write detailed rules that favor their interests. These are the same lobbying groups that influenced lawmakers when the bill was being written. They include hospital systems, health insurers, and private equity-backed physician staffing firms.
A lot is riding on how effective those lobbyists are in getting their way. As one consumer advocate aptly said in Politico, “[The Department of Health and Human Services] is going to have to be really hard-hitting, or it’s another squishy law that’s supposed to be preventive but is totally circumventable.”
One way to circumvent the law is increasing future health care costs. A second way is if providers find a way to get you to agree to waive your rights under this law. The Department of Health and Human Services needs to create language and procedures that prevents you from unknowingly signing documents saying you will pay out-of-network charges.
Coming Up
Washington D.C. will be a beehive of lobbyist activity as these details are worked out. I’ll be sharing updates and final rules with you. Most importantly, I’ll tell you how to protect yourself from the No Surprises Act’s devilish details.