According to legend, after watching Mickey Mantle and Roger Maris hit back-to-back home runs during the 1961 season, Yogi Berra, the late Hall of Fame baseball player, said, “It’s like déjà vu all over again.” Four decades later, Britney Spears sang “Oops!... I Did It Again.” Both expressions seem applicable to the federal government’s approach to the arbitration process in the No Surprises Act.
The 2020 No Surprises Act was passed to end the problem of surprise medical billing.1 This issue, which is more accurately described as a surprise gap in insurance coverage, occurs when someone with private health insurance receives care unexpectedly from a physician or hospital not in their health plan’s network. This is meaningful since out-of-network care may mean a higher out-of-pocket expense for the patient. The No Surprises Act was welcomed by the medical community as a reasonable solution.
Laws addressing surprise medical billing can do two things. The first is obvious; they reduce surprise medical billing. Less intuitive is that laws to address surprise medical billing may disrupt good-faith network negotiations between medical practices (or hospitals) and insurance companies. In a sense, surprise medical billing legislation can be a Trojan horse, with insurers claiming it’s about protecting patients from out-of-network bills, when their real interest is in disrupting good-faith negotiations to their benefit.
The No Surprises Act is intended to protect patients from unexpected out-of-network bills in a manner that does not favor physicians or insurers. Under the law, when receiving unexpected out-of-network care, patients pay their normal in-network cost-sharing amount, and insurers reimburse physicians the rest. To settle disputes when insurance companies and doctors cannot agree on a rate, the law created an arbitration process using a third party.
The Departments of Health and Human Services, Labor, and Treasury were tasked with rulemaking, detailing how the law would function. In September 2021, the government issued a rule instructing arbiters on how to decide cases.2 While the law detailed a list of criteria for the arbiter to consider, balancing the concerns of both physicians and insurance companies, the rule stated the arbiter should instead begin with the presumption that one of the listed factors, an insurance company-determined amount (termed the “qualifying payment amount,” or QPA) was appropriate and select the offer closest to it. While physicians could appeal the insurer’s payment offer to an arbiter, the burden of proof was on doctors to demonstrate why the QPA was inappropriate.
The rule prompted numerous lawsuits, including from the ACR. In February 2022, the judge in a lawsuit filed by the Texas Medical Association (TMA) issued his verdict, agreeing with the TMA and writing that nothing in the law instructs arbiters “to weigh any one factor or circumstance more heavily than the others.”3
The federal government subsequently retracted this part of the rule and vowed to issue a new rule, which it did in August 2022. This updated rule states that the arbiter must first look at the QPA and then consider additional information.4 Further, if the arbiter does not select the QPA, it must explain in writing the rationale and why the insurer-determined QPA does not already take the additional information into account. The new version of the rule (again) makes the QPA the primary factor in arbitration. As a result, the TMA filed a second lawsuit, which the ACR is supporting through a “friend of the court” brief.
To quote Yogi, it’s like déjà vu all over again.
The No Surprises Act was intended to protect patients from unexpected out-of-network bills, not help insurance companies profit. Shortly after the government’s initial rule establishing the QPA as a rebuttable presumption, insurers in North Carolina and elsewhere began sending letters to in-network practices, specifically referencing the law and rule.5 Practices could accept a substantial rate reduction or risk being kicked out of network.
Recall that the law was intended to stop unexpected out-of-network billing (it is literally named the No Surprises Act), but these letters were exclusively being sent to in-network practices. These letters demonstrate that insurers were using the law to disrupt good-faith negotiations to their advantage.
The government should implement the No Surprises Act as Congress wrote it. It should acknowledge the mistake and issue rules that reflect balance, not favoring insurance companies or physicians. Or, as Britney sang, “Oops!... I Did It Again.”