No Surpises Act in layman's terms?

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ethilo

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Maybe it's because I don't do my own billing but I really could use some help here. Can I get help understanding how the No Surprises Act works in the world of Anesthesia?

Let's use a simple case report to analyze:
- Insured patient comes for appendectomy, receives surgery.
- Afterward it was found that surgeon, emergency physician, and facility are in-network, covered by their insurance company hypothetically named INSURANCECOMPANY
- Anesthesiologist is deemed out-of-network by INSURANCECOMPANY

So I'm going to take a stab at explaining No Surprises Act (NSA) as I understand it in simple terms. Please correct me where I misunderstand what's going on:

BEFORE the No Surprises Act:
INSURANCECOMPANY would cover nothing for the out-of-network anesthesia services, leaving collections solely between ANESTHESIA and the PATIENT. ANESTHESIA would bill the PATIENT directly and may or may not end up receiving a payment. If ANESTHESIA didn't receive payment PATIENT could be taken to court, wages garnished, etc., but more than likely ANESTHESIA frequently didn't get any collections and it's expensive to take PATIENT to court so it just didn't happen and ANESHTESIA just didn't get paid.

AFTER the No Surprises Act:
This out-of-network situation would go to "arbitration" between INSURANCECOMPANY and ANESTHESIA. That means an independent party (the ARBITER) sits at the table and hears both sides propose fees for the service. The good thing about this is it now forces INSURANCECOMPANY to come to the table to negotiate against ANESTHESIA over a price. ARBITER then decides who to go with in terms of the cost of the care given. Whoever loses then is responsible for the cost that the winner proposed (If ARBITER agrees with ANESTHESIA on price, then INSURANCECOMPANY pays... and visa versa).

Impact on PATIENT:
- If ANESTHESIA wins arbitration: then INSURANCECOMPANY will to cover patient even though it's out-of-network.
- If INSURANCECOMPANY wins arbitration: then ANESTHESIA will need to collect directly from patient but this time they can only collect as much as INSURANCECOMPANY's proposal in arbitration, so the hit won't be as bad as it would have been before NSA.

Impact on ANESTHESIA:
- NSA is beneficial because you might actually get paid for an out-of-network patient if you win arbitration. However it probably is less than you could have gotten had the patient followed through with payment.
- Large anesthesia corporations like Envision are harmed by NSA because they heavily relied on out-of-network patients being taken to court to force them to pay very steep bills with a well funded team of attorneys.
- Small ANESTHESIA groups are harmed because they did rely on these out-of-network patients paying for their costs when they could. Now those patients who had the means to pay would only have to pay a smaller amount that INSURANCECOMPANY decided upon in arbitration.

Impact on INSURANCECOMPANY:
- They are now potentially forced to pay for out-of-network services if ARBITER favors ANESTHESIA proposal.
- INSURANCECOMPANY now favors decreasing in-network to a more extreme fashion in an effort to send more cases to arbitration on the off-chance they can get out of paying for coverage at all.

Am I on the right track?

Please do your best to minimize abbreviations and to dumb things down as much as possible. This is hard for me to understand 😵
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You seems to have a good grasp except for the part about arbitration. Arbitration isn’t free and requires the provider, you, to file a claim for every case. Second, insurance company will delay and deny your claim because you are out of network. You will need to group all your claims together then file a grievance against the insurance company. The small guy is going to get crushed by this while the larger companies have the resources to fight the denial.

The patient is safe and pays nothing to you period because the facility accepted the insurance. You are not permitted to bill the patient beyond the usual copay because the patient is held harmless here.
 
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The Arbitration Process​

Under the No Surprises Act, patients are protected from financial liability beyond normal in-network cost sharing when treated by an out-of-network provider for most types of emergency care and nonemergency care provided in an in-network facility. Providers and facilities are banned from billing patients to collect a higher amount.

The No Surprises Act includes a process to determine how much a patient’s health plan must pay an out-of-network provider. The parties must first negotiate for 30 days. If negotiations fail, either party may initiate “baseball-style” arbitration in which each party offers a payment amount and a neutral arbitrator decides between them.

In choosing between competing offers, arbitrators must consider certain factors: the health plan’s median in-network rate (known as the qualifying payment amount), additional circumstances like the provider’s level of training or experience, and any information the parties provide or the arbitrator requests. Arbitrators cannot consider a provider’s “usual and customary rates” (i.e., billed charges) or reimbursement rates paid by public payers such as Medicare or Medicaid.

In an interim final rule establishing the arbitration process, federal officials directed arbitrators to pick the offer closest to the qualifying payment amount unless the parties submit credible information that shows the payment amount should be different. Federal officials and the plaintiffs refer to this as a “rebuttable presumption.”
 
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BLADEMDA said:
You seems to have a good grasp except for the part about arbitration. Arbitration isn’t free and requires the provider, you, to file a claim for every case. Second, insurance company will delay and deny your claim because you are out of network. You will need to group all your claims together then file a grievance against the insurance company. The small guy is going to get crushed by this while the larger companies have the resources to fight the denial.

The patient is safe and pays nothing to you period because the facility accepted the insurance. You are not permitted to bill the patient beyond the usual copay because the patient is held harmless here.
Click to expand...
So how is there a "filing" or "accepting of the claim" in this new system? Because if a patient is out of network, shouldn't that just trigger that both insurance company and anesthesia by default must come to the table with an arbiter?
 
Even though the legislation is about “out of network”rates, it will have a larger impact on “in network” rates. We will no longer have the nuclear option of billing patients “usual and customary” fees for out of network services. These are like the “book” rates that are posted by hotels. Nobody actually pays that. In real life, everybody gets a discount.

The larger issue is that insurance companies know their current “in network” rates and will have no incentive to negotiate better “in network” rates. Since they know the arbiter will base their decision on current prevailing rates, the no surprises act will depress or stagnate “in network” rates. There will be little or no opportunity to increase “in network” rates. The concern is not really about “out of network” payments which are usually a very small proportion of collections, but the effect this legislation will have on “in network” rates.
 
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BLADEMDA said:
In choosing between competing offers, arbitrators must consider certain factors: the health plan’s median in-network rate (known as the qualifying payment amount), additional circumstances like the provider’s level of training or experience, and any information the parties provide or the arbitrator requests. Arbitrators cannot consider a provider’s “usual and customary rates” (i.e., billed charges) or reimbursement rates paid by public payers such as Medicare or Medicaid.
Click to expand...

and how does the median in-network rate work? It isn't specified as far as I know.

Insurance company will claim that they have 10 different contracts, 9 of which pay about $50/unit (give or take) so $50/unit is the median contract rate. Physician will claim that those 9 contracts at $50/unit are only 20% of the insurance company's business and the 10th contract is $100/unit so 80% of the patients are being reimbursed at $100/unit so $100/unit is the median rate.

From the insurance company POV, they want to negotiate everyone down to the median rate. And as the higher practices drop lower and lower the median goes lower and lower. It's a never ending spiral of decreasing reimbursement.
 
nimbus said:
The larger issue is that insurance companies know their current “in network” rates and will have no incentive to negotiate better “in network” rates. No surprises act will depress “in network” rates.
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yes, the next time you negotiate your contract the insurance company will just lowball you to their median rate as their final offer. You don't like it? Go out of network and you will only collect the median rate. So quickly everybody drops down to that rate as the peak rate they pay.
 
nimbus said:
The larger issue is that insurance companies know their current “in network” rates and will have no incentive to negotiate better “in network” rates.
Click to expand...
well that really sucks. I guess if I understand it right, we need some other 3rd party payer to compete with insurance companies? I was reading our profession, like emergency, is shielded from usual market practices because patient volume we see doesn't really change no matter our fees.

Then how do we ensure fair billing? By negotiating with the hospital systems we work inside instead of with insurance companies?
 
ethilo said:
well that really sucks. I guess if I understand it right, we need some other 3rd party payer to compete with insurance companies? I was reading our profession, like emergency, is shielded from usual market practices because patient volume we see doesn't really change no matter our fees.

Then how do we ensure fair billing? By negotiating with the hospital systems we work inside instead of with insurance companies?
Click to expand...


Yeah, I think hospitals will eventually have to make up the difference to keep the factory running. They have the ability to cost shift.
 
Does the arbiter have a global “bird’s eye” view of what the in-network rates are for anesthesia services? In such a scenario, it actually might be beneficial for the small practice that’s surrounded by Envisions and NAPAs. That small practice might have been offered a junk rate for in-network, while NAPA and Envision were getting double or triple. In this scenario, the playing field is leveled for the smaller independent practice. Too optimistic?

Also, do insurance companies currently pay nothing for out-of-network services and just forward the bill to the patients? I thought insurance companies paid something and it was up to the practice to decide whether or not to balance bill the patient?
 
GravelRider said:
Does the arbiter have a global “bird’s eye” view of what the in-network rates are for anesthesia services? In such a scenario, it actually might be beneficial for the small practice that’s surrounded by Envisions and NAPAs. That small practice might have been offered a junk rate for in-network, while NAPA and Envision were getting double or triple. In this scenario, the playing field is leveled for the smaller independent practice. Too optimistic?
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too optimistic because the insurer will claim that envision and NAPA are only 2 contracts and they probably have lots of smaller contracts that pay a lower rate so the median is far below what their top contracts pay.

Remember, the insurance companies helped write the legislation.
 
I have a question. Wouldn’t you avoid the whole arbitration process in the elective setting if you have an upfront cost for the procedure we’re known? Emergencies I can understand. But this would seem to bypass the issue.
 
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Fpg1245 said:
I have a question. Wouldn’t you avoid the whole arbitration process in the elective setting if you have an upfront cost for the procedure we’re known? Emergencies I can understand. But this would seem to bypass the issue.
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IIRC certain specialties such as Rads, Anesthesia, Pathology and NICU were specifically exempted from elective setting regardless of situation.

I do not know but it would not surprise me if these were coincidentally the specialties most associated with private equity firms…
 
Mman said:
too optimistic because the insurer will claim that envision and NAPA are only 2 contracts and they probably have lots of smaller contracts that pay a lower rate so the median is far below what their top contracts pay.

Remember, the insurance companies helped write the legislation.
Click to expand...

Right, but if the arbiter knows that the insurance company’s 2 contracts are 80% of its payouts then that could be beneficial to the small private practice. The arbiter could just see that on average the insurance company pays $100/unit for in-network anesthesia services, but only offered the small practice $50/unit to be in-network. I guess the question is, what kind of information is available during arbitration and how is it taken into account?
 
HemeOncHopeful19 said:
IIRC certain specialties such as Rads, Anesthesia, Pathology and NICU were specifically exempted from elective setting regardless of situation.

I do not know but it would not surprise me if these were coincidentally the specialties most associated with private equity firms…
Click to expand...

It cannot be considered a surprise if the patient is forewarned.
 
Also... Who is the arbiter? Can you insure they do not receive some kind of secondary gain? How are we assured they are a neutral party?
 
Texas Judge isn't siding with the insurance companies. The system is rigged against the small guy but the Courts aren't going to just fall in line.


www.aha.org

Federal judge in Texas strikes part of surprise billing rule | AHA News

A federal judge in Texas struck down certain parts of the federal government’s surprise medical billing regulations related to the arbitration process for determining payment for services by out-of-network providers, saying the regulations conflict with the text of the No Surprises Act.
www.aha.org www.aha.org


The AHA and American Medical Association in December filed a separate lawsuit challenging parts of the rule saying the regulation places a heavy thumb on the scale of an independent dispute resolution process, unfairly benefiting commercial health insurance companies. The AHA and AMA lawsuit is being considered in the U.S. District Court for the District of Columbia.
 
HemeOncHopeful19 said:
I agree with your but apparently our government and their lobbyists disagree.
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Won’t stand up in court. Patient agreed to terms. Medicare does not set prices neither do insurance companies. If you don’t accept their terms you are free to charge them.
 
I sent this thread to a friend of mine who is involved in the implementation of this law nationally and here’s what he had to say:



1) For emergencies, insured only pays in-network (IN) rate. Ever. Out-of-network (OON) provider is prohibited from collecting anything from insured, regardless of the independent dispute resolution (IDR) decision.

2) OON provider is paid, at a minimum, in the following order: all payer model agreement (only in MD); the amount under a “specified state law” (more on this later); or the qualifying payment amount (QPA) (the median contracted rate of all the insurance company’s IN rates for the service/item for providers in the same geographic area and same insurance market, adjusted for inflation). The provider gets paid something but not as much (at least on paper) as would be pre-NSA.

The provider can negotiate for more from the insurance company. If they fail to settle, then it goes to the IDR and that decision is final.

The specified state laws are all over the place. Some states go to arbitration out of the gate. Others require a different set of choices (e.g. a QPA-like benchmark of 80% of the highest IN rates). It’s a mess and I’m surprised that Congress gave so much deference to them.

Long term, this may push more providers IN. I’d be curious to know whether OON providers do better under this system than, for example, fully collecting on only 20% of bills and getting less on the remainder.
 
PainInTheAnes said:
It seems like this is a good way to compensate practices that cover emergency services for bad payor mix areas or trauma centers. The idea of practices chasing down the emergency population and trying to collect money that way is completely unsustainable as a practice. Plenty of people will be doom and gloom on this, but my guess is it’s worth it to the majority of groups that can’t be slapping every patient with collections lawsuits. Also prevents AMCs from being able to do it to allow more competition from the smaller groups.

Every group I’ve ever googled has terrible reviews and they all involve out of network payment disputes. Obviating that fountain of dissatisfaction (for groups and patients) and making sure you get something from every uninsured patient is definitely preferable to what we have now.
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it does nothing to help the trauma/no pay population because those patients don't have insurance so nothing about the law applies to them. They aren't "out of network". Out of network is just insured patients that the physician and insurance company have not agreed to a contract for. Most of the time it is because the insurance company is being unreasonable in what they offer, occasionally because the physician (or group) is being unreasonable in what they ask for.

The No Surprises Act is basically just a dispute resolution process for the insurance company vs physician that is intended to leave the patient out of it and make sure they don't get a large bill. Unfortunately the wording of the bill was heavily influenced by insurance companies and can be used against physicians. There are obviously quite a few state laws that become very relevant in the process as well.
 
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Mman said:
yes, the next time you negotiate your contract the insurance company will just lowball you to their median rate as their final offer. You don't like it? Go out of network and you will only collect the median rate. So quickly everybody drops down to that rate as the peak rate they pay.
Click to expand...

I'm a radiologist and recently spoke to a former co-resident of mine who's in Philly area. He states that some commercial insurers have already dropped reimbursement in the 30-50% range as a result of this...To my knowledge, this has not yet happened to my group but I'm unsure...Was wondering what has been going on with anesthesia
 
vm26 said:
I'm a radiologist and recently spoke to a former co-resident of mine who's in Philly area. He states that some commercial insurers have already dropped reimbursement in the 30-50% range as a result of this...To my knowledge, this has not yet happened to my group but I'm unsure...Was wondering what has been going on with anesthesia
Click to expand...
The hammer will fall before too long. Some groups have seen contracts unilaterally terminated. Small groups have zero leverage and are settling claims, nobody has the money to go to arbitration. The race to the bottom accelerates every day.
 
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