Lawmakers are expressing bipartisan frustration over the implementation of the No Surprises Act, a law meant to protect patients from unexpected medical bills after receiving care from out-of-network providers at in-network facilities.
In a House Ways and Means Committee hearing on Tuesday, Representatives grilled witnesses including payers, providers and arbitration services representatives about the implementation of the NSA, which went into effect in January 2022.
Rep. Richard Neal, D-Mass., ranking minority member and the law’s author, called the implementation a “disappointment.”
An overloaded and contentious dispute resolution process has strained relations between providers and payers and impeded access to quality care for other patients, particularly those in rural areas, according to testimony given on Tuesday.
Chairman Jason Smith, R-Mo., said implementation had strayed far from congressional intent and had “made the very problem it intended to fix worse.”
“It has created a tilted dispute resolution process that has left medical providers paying more to participate in a process that often forces them to accept artificially low payments with no enforcement guarantee,” Smith said. “It has also led to legal challenges that have resulted in significant backlogs and left the process clouded in uncertainty.”
Overhauling the IDR process
Representatives focused much of their attention on the independent resolution process of the NSA.
The NSA mandates an independent dispute resolution process for surprise medical bills, and requires payers and providers to submit a payment offer to a third-party arbiter, who then selects one amount in what is called a final-offer or baseball-style arbitration process.
All IDR claims have been paused since August after a court vacated provisions of the NSA. The most recent pause is the latest in a series caused by lawsuits stemming from the Texas Medical Association, which has argued the IDR process unfairly benefits insurers. The TMA lawsuits have successfully vacated multiple portions of the NSA, including those that charged a $350 fee to enter a dispute process.
Despite the courts ruling multiple times in providers’ favor, witnesses representing providers testified that the process is still inadequate to adjudicate claims.
“The IDR rules have been written and rewritten several times and are still problematic. The process is inefficient, and the results — when there are results — are arbitrary,” said Jim Budzinski, executive vice president and CFO at Marietta, Georgia-based Wellstar Health System. “The lack of timely, fair and equitable determinations through the IDR process benefits the health insurers at the expense of those, like Wellstar, that provide medical care.”
Budzinski cited a 2022 study from the CMS, which found the IDR process had only reached a payment determination in 15% of cases. At Wellstar, he said, the results have been worse: Of the health system’s 8,000 claims, only 7% have been heard and closed to date.
Providers argued that barriers to receiving reimbursement come at a time when hospitals, particularly rural facilities, can’t afford it, as they face inflationary pressures and high labor costs.
Getting payments on time could benefit patient care, said Seth Bleier, vice president of finance with Wake Emergency Physicians PA in Raleigh, North Carolina, told representatives.
“If physician groups and emergency medicine groups are reimbursed properly, it allows them to have the resources needed to take care of patients in any environment, including rural environments with less advantageous payer mixes where perhaps they have a disproportionate number of Medicaid and self-pay patients,” Bleier said.
Jeanette Thornton, executive vice president of policy and strategy at payer lobby AHIP, pushed back on providers’ remarks, citing federal reports claiming that, when IDR resolutions do go through, 71% of resolutions ultimately favor providers. She added that any delays in payouts were likely due to the time it took to code claims, which she said could take thousands of lines of code.
When providers and payers were asked how they would fix the process, most suggested providing additional resources to adjudicate the large volume of claims.
Budzinski called for more arbitrators and additional focus on enforcement so payers could calculate the qualifying payment amount correctly and make payments to providers on time. The QPA is the median rate an insurer would have paid for a service at an in-network facility, and the amount factors into the IDR process.
Thornton called for the CMS to invest in technology to increase transparency into claims status, adding that more and infrastructure could provide “a clearer dashboard of all of these various claims and where they are in the process.”
Such a tool would “really go a long way to mitigate any payment delays that any of the panelists are experiencing,” Thornton said.
James Bobeck, president of Federal Hearings & Appeals Services, which offers IDR arbitration services, said there were plans to leverage technology to streamline the process moving forward.
He emphasized that many of the problems providers and payers had experienced thus far came from “misunderstanding, miscommunication and the misinformation” of how the process was intended to work. Once parties were consistently providing the right information, he said, the CMS and arbitration companies could “automate many parts of the process,” cutting down the time to deliver a decison.
“They did not put that out in the first model — the first model was simply to get [the process] off the ground, but those are future improvements that can be made, and they will be made,” Bobeck said.
