The No Surprises Act (NSA) had bipartisan support in Congress and was intended to protect patients from high balance bills, when they were treated by out-of-network physicians at in-network facilities. While the spirit of the legislation was honorable, there was an unforeseen loophole that payors are now exploiting.
Then and Now
In the past, insurance companies were often forced (on appeal) to pay out-of-network claims at 100% of billed charges, since the doctor was not contractually bound to accept the payment remitted and adjust the patient responsibility. That all changed on January 1st of this year, when NSA went into effect.
Insurers can now limit such ‘non-par’ payments to their unpublished ‘median contract rate’ (also known as the ‘qualified payment amount’), with a prohibition on patient balance billing. This is the first time in history that the insurance industry has had a means to dictate out-of-network expenditures for hospital-based services, without the patient being involved.
On the surface level, this all sounds pretty reasonable. If you’re out of network, you must have made a concerted effort to do so, right?
Not necessarily. Payors themselves began terminating group contracts as soon as the passage of NSA was imminent. When you think closely about this, there’s a huge difference between the terms ‘median’ and ‘mean’ in this context.
By negotiating the former into NSA regulations, payors can now use the contract rate that’s halfway in between the highest and lowest rates of a like service, for out-of-network payments (and not the average).
What’s worse, these same payors can identify their highest paying contracts and simply terminate them without cause, thus lowering the amount they’ll have to pay out.
In essence, they’re shrinking their own internal networks and expanding the out-of-network pool, all while creating a desirable Qualified Payment Amount. This problematic legal issue will surely be addressed at the highest judicial levels, in the months to come.
Unfortunately, in the meantime, many medical groups have gotten caught in the crosshairs of this high-stakes poker game. Termination letters are being received by practices all across the country, with demands to accept 30-40% pay cuts, just to remain in-network. Few have acquiesced to these absurd ultimatums and instead have prepared themselves for the Independent Dispute Resolution (IDR) process, an arbitration-type remedy available under the law.
There are many nuances to the IDR process, but it’s one that’s worth undertaking, if you find yourself with a term letter from one of your larger insurance plans.
Besides assembling a solid internal IDR team and consulting with others who have already undertaken this journey, one of the most important tools you’ll need is a detailed report from your billing company.
To make this task easier, we’ve included some of the actual ‘qualification questions’ from the CMS IDR Portal, below. Click here for the complete question list in pdf format.
Independent Dispute Resolution (IDR)
Portal Question Set
Health care provider name
Hospital, health care facility or group name
Date of service
Place of Service Code (21/22/24)
Hal Nelson, CANPC
has 30 years experience on both the payer and RCM side, with a focus in Anesthesia. He formerly worked as a senior claims approver at United Healthcare, as well as a compliance officer for multiple national billing companies. He has also taught the CPC coding curriculum collegiately in Atlanta. His broad based experience ensures that MSN clients will have a resource for documentation and billing issues. His past speaking engagements include ASA, MGMA, Dartmouth, and Johns Hopkins.
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