Some health care industry groups are pressing the Biden administration to change its plan for implementing a law meant to shield patients from surprise medical bills that is set to take effect next month.

Many of the arguments sent in letters to federal agencies by Monday night reflect the debate that stakeholders had last year as Congress drafted the law. The groups are also commenting on policies set to take effect next year designed to provide patients with more insight into what medical services and procedures cost.

Congress included legislation to shield patients from surprise medical bills last year in a year-end package after months of debating how to settle payment disputes between health plans and providers when a patient receives emergency out-of-network care or is treated by an out-of-network doctor at an in-network facility. 

The rule would set up an arbitration process for payers and providers if they cannot reach an agreement on payment for services that would currently result in a surprise bill. The interim final rule says the third-party arbiter should consider the in-network median payment rate for a procedure.

Hospitals and provider groups are urging the administration that the arbiter should not focus on the qualified payment amount. The American Hospital Association argues that the law does not specify that and it would create “a nearly insurmountable set of conditions for providers.” 

“Hospitals and health systems are therefore, profoundly concerned about the decision by the departments to distort the No Surprises Act [independent dispute resolution] process in favor of plans and issuers at the expense of patients and providers,” Stacey Hughes, the executive vice president of the AHA, wrote in a comment letter. “By directing arbiters to presume that the plan’s or issuer’s median contracted rate is the appropriate out-of-network reimbursement rate and creating a significantly higher bar for consideration of other factors means that the IDR process effectively will be unavailing for providers.”

On the other hand, health plans support the proposed method for resolving payment disputes.

“When more high-quality health care providers participate in health plan networks, patients receive better, more coordinated health care at lower costs. And they do not worry about surprise bills,” America’s Health Insurance Plans President Matthew Eyles wrote.  “The approach taken in the interim final rules is a clear win for hardworking people.”

It’s not clear whether the administration will be open to changing the rule, which was issued as an interim final rule earlier this fall. The law is set to take effect in January. Health and Human Services Secretary Xavier Becerra defended the interim final rule in an interview with Kaiser Health News last month, saying providers shouldn’t overcharge for services.

“When the arbitration process is wide open, no boundaries, at the end of the day health care costs go up, not down,” Becerra said. “We want costs to go down. And so we want to set up a system that helps provide the guideposts to keep us efficient, transparent and cost-effective.”

Additional factors

Lawmakers have also been divided over how the administration plans to implement the rule. Education and Labor Chairman Robert C. Scott, D-Va., and ranking member Virginia Foxx, R-N.C., wrote last month in support of the rule, saying it “properly balances the interests of all stakeholders while advancing our shared, bipartisan goal of minimizing administrative burdens and reducing health care spending.”

Other members disagree. Another 152 members wrote in a separate letter last month that the law requires the arbiter to also consider factors including provider training and quality of outcomes, the complexity of services, the parties’ market share and the demonstration of a good faith effort between the parties to negotiate, among other things. 

The American Heart Association said the administration should keep the rule as written since they say it would help contain costs for patients and encourage payers and providers to reach a payment agreement before using the independent dispute resolution process. The group also urged the administration to invest in a consumer education campaign so that people will know about the new protections included in the law.

“Robust investment in consumer education will help ensure the [law] works as intended and that patients are aware of their rights and protections, know where to turn when they are inappropriately billed, which will allow for more comprehensive enforcement,” wrote Emily Hubolowich, the group’s vice president for federal advocacy. 

Jerry Penso, president of the AMGA, a trade group representing multispecialty medical groups, said the group agreed with the lawmakers who argued the arbiter should consider more factors during the arbitration process.

The AMGA also said the administration should pause the implementation of a requirement for providers to give uninsured or self-pay patients a good faith estimate, or GFE, of their costs. The group said the process would be burdensome to administrators.

“While supportive of price transparency, AMGA is concerned that the GFEs provided to uninsured and self-pay patients may cause more confusion,” Penso wrote. “In addition, our members report that responding to requests for GFEs threatens to overwhelm an already stressed administrative and nonclinical staff.”

The Medical Group Management Association made similar comments about the pay estimate and asked for more time to implement the new policies. 

“Three months does not provide sufficient time for practices to fully understand and implement these new requirements and places undue burdens on medical practices,” wrote Anders Gilberg, the group’s senior vice president for government affairs. “MGMA strongly encourages the Department use enforcement discretion for all surprise billing requirements until the end of CY 2022.”