The No Surprises Act Debacle

The No Surprise Act was hammered out over many hours of debate and discussions in an attempt to get the patient out of a very complex and garbled process that they have very little ability to understand or to argue so they didn't get taken advantage of by either side.  It had the intent to be a fair process that would not favor the payor or the physician. However, most of its good intent was thwarted by the rules making process that is supposed to follow the intent of the bill. We were just this week told by the HHS rep in a discussion of the bill that created FECs in Texas that the rule making process cannot vary from the bill’s original intent. We were trying to argue for FECs to be able to use their ancillary services/equipment for outpatient services and the bill did not include this. I immediately thought of the NSA rule making that totally misconstrued the original intent of the bill and was written in a way without needed constraints that would allow the insurance companies or payors to completely corrupt the bills intent and allow them to hold on to the funds that they were entrusted with to provide care for their clients in a fair and timely manner like all entities are supposed to pay for services.  It was supposed to take the patient out of the picture and do it by having the patient’s responsibility be the contracted percentage of the original offer of payment by the payor at the very beginning of the process. If there was a dispute about the amount the payor was supposed to pay, then the dispute was handled solely between the payor and physician with the patient out of the picture for the rest of it. You would think that the payor would try and get their original offer as close to what the actual negotiated amount would be so that they got the appropriate amount from the patient. But what has happened is multiple different tactics to underpay, delay payment, not pay at all, and to then jerk the patients back into the process forcing them to pay more.

Understand that the longer a payor can hold on to the funds that should be paid to a physician, the more interest and use they get out of the funds they owe legitimately to the physician who took care of the payor’s client in good faith. Note that the physician has to pay all of their expenses of labor, materials, equipment financing in the normal time restraints and business penalty schedule.  This typically consists of 10 days to pay a bill, without a penalty, 10-30 days to pay a bill with late fees added to that. Discontinuation of service, providing labor or taking back the equipment if not paid in 30 days. All of which results in the failure of that health care facility to stay in business and provide that much needed medical care in a system that is already deficient with long waits to get care. Note that the longer the payor or insurance company hangs on to the funds of the physician the more desperate they are to get at least some of the funds to keep the doors open and in business.

So the bill's intent was that the initial offer should be as close as possible to an amount that considered the mean in network rate of other similar facilities in that physicians area along with additions and subtractions that considered many factors that increased costs as well as the value of that care and even the amount of care that that facility provided (market share) in the area of the physician.  Thus, providing more or less than the mean in network rate for that same service or services by a similar entity with similar quality and rewarding for higher workload, value, or skill in that care. If there was a dispute over the amount offered, then there was a 30 day period to openly negotiate with the other side to get it to a compromise. If this couldn’t be agreed upon then the side disputing it had only 4 days to submit it for arbitration with an arbitration company and its arbitrator. The fee to submit this was set at 50 dollars to enter a group of bills for a dispute and the bills had to be similar to submit them together.  I don’t know if there was an actual amount of the limit of how much each bundle could total as it would be to the advantage of the physician to be able to bundle as many similar bills together as possible for that $50 fee. There is an arbitration fee as well that can apparently be whatever the arbitrator company wants to charge and this and the 50 dollar fee has to be paid by the loser of the arbitration.   

So, note that the rule making process did not attach any penalty to the number of cases lost or even submitted into the process by each entity involved be it payor or physician. 

This whole process of creating the bill and developing the rules of the rule making process took years to put together so this bill being passed was not a surprise to anyone.  The time between passing the bill and the rule making process of submitting the rules and public comment on the rules for revisions and then final recording of the actual rules were many months and plenty of time to prepare for this process because the payors knew the bill had passed.

At the onset of when it was supposed to be implemented, the payors all said that they couldn’t proceed with any disputed bills because they had not set up the portals and processes to handle this new procedure and additionally only paid a minimal initial amount of almost all bills at about 8.5-10% of what they should pay or were billed. This being even below Medicare rates. They blatantly said that it would take them several months to set this up, delaying reimbursements of legitimate claims for services provided in good faith by almost 5 months.

Because there is no increasing penalty for the number of cases they underpay, they flooded the system by underpaying almost all of their bills, backing the system up for months, because this amounted to many times the expected dispute cases. Because of this there were not enough arbitrators for this huge unanticipated workload. This lack of adequate arbitrators further delays their need to pay out the arbitrated amount allowing them to hold on to the physicians’ funds even longer.

The rule making process further wrongly left it up to the payors to determine the mean in network rate and did not stipulate that it had to be of same type of facilities for the same service. So, the payors included rates paid to facilities that never or almost never did the service billed, so these so called ghost rates were way below the normal in network rate for these types of physicians involved int the dispute. These were called Ghost rates because they were rates that were minimal to nothing and not legit for that service. They used these to determine their initial offer or QPA (Qualified payment amount). This further rendered the starting point of negotiations unfair and in the favor of the payors.

Then rather than penalizing the payors for taking advantage of the system to delay payments by underpaying on almost all of their bills, rather than just a few legitimately complex cases that a dispute could be warranted, the rule makers decided to increase the costs of submitting a disputed bill to 700% of what was listed in the bill.   Their obviously biased excuse was that the system was inundated and backed up because the physicians were submitting too many cases to the process. Increasing the costs would discourage this and provide for the costs of hiring more arbitrators. This obviously went against the intent of the bill as this was spelled out and the basis of one of the TMA lawsuits that they have won.

Then on top of all this there is rampant disregard of paying the arbitrated amounts of what the physicians have proven in the cases the physicians have won for months as there is no penalty being rendered either by the rule making process or the supposed regulators of the insurance companies, TDI.   You would think that TDI is supposed to regulate, monitor and fine the insurance companies for noncompliance of any laws or blatant abuse of the system of insurance payment systems. They are called the Texas Department of Insurance as near as I can tell.

The TMA, ACEP, EDPMA, and NAFEC have all been battling this process and raising the alarm fighting to get this process fixed and to the original intent of the bill and legislators who wrote it. This affects much more than just FECs but all entities that might be out of network. All of the hospitals and health care facilities are being compromised with many facilities and companies going under due to lack of payment.  Note what happened to the staffing companies whose majority of bills are less than $350 because they can only collect the professional part of the fee and most of those are below or minimally above 350 cost to dispute them. Therefore, it is not worth even fighting the underpayment because it may cost them more to fight it than they stand to gain.

TMA has filed 4 lawsuits and have won 3 of them so far and will win the fourth all fighting multiple points of the rule making debacle but if you want to see even more obvious evidence of the compromise and bias of the rule makers and handling of the rule making process, Guess what CMS and HHS have done each time TMA has won their lawsuits about how the rule making is not following the intent of the bill,  They have stopped the whole IDR or NSA defined process of processing more cases until they correct what they have wronged according to the court’s decision. This further delaying reimbursement of the physicians for the services they have to pay the overhead to provide promptly according to normal payment schedules and rules.

You really can't make this stuff up. Nothing is being done to penalize the rule makers or investigate them for fraud and abuse yet, but Senator Bill Cassidy has written a scathing letter of demands to CMS and HHS. The Ways and Means committee is going to have an oversight hearing on September 19th investigating all of this. TMA has won 3 of their 4 suits so far and got several things reversed or improved. They have gotten the fee reduced back to $50. They have gotten them to not accept the QPA amount the payors are submitting as of much weight in the decision of the actual arbitrated amount. NAFEC has submitted a letter to CMS and HHS on suggestions and complaints of the process and I will include that in the attachments. The majority of legislators we have been in contact with are irate at the blatant abuse of this system and normal fair handling of the insurance company/payors obligations. However, we are not seeing anything substantive to fix this and penalize the insurance companies that are making record profits while physicians and health care entities are going under left and right from nonpayment or delayed payment for their services, they provided in good faith.

In my opinion there needs to be an enforcement entity formed in the federal government that has teeth and is not comprised by the insurance companies that forces the payors to honor their commitments and fines them more each time they continue to abuse this system.  Another words the loser of the arbitration is forced to pay more each time they lose a case, and that increase is proportionate to the difference between the initial payment and the final arbitrated amount. Just like radiation exposure. The more they commit this business fraud, the more they pay in penalties and half of that goes to the winner.