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Physicians

TMA’s Challenge of the Federal Surprise Medical Bill Protection

Provider advocates say the arbitration process benefits insurers.
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Courtesy: iStock

The federal No Surprises Act gives protection from surprise bills to every American with health insurance, but provider advocates aren’t happy with the final iteration of the bill.

Surprise bills occur when a patient receives care at an in-network facility, but one of the providers they saw is not in-network (such as an emergency physician or assistant surgeon). Patients who thought they were in-network then receive a bill from an out-of-network physician. The new law means that if a patient needs emergency care and seeks it at an in-network hospital and the emergency room physician is out of network, the doctor can’t send the patients bills outside of the deductible, and co-insurance limits the patient’s insurance plan. For planned procedures, if the surgeon is in-network, but the assistant surgeon or anesthesiologist isn’t, they aren’t able to bill beyond the health insurance plan as well.

Providers can present a form to patients before surgery that may waive a patient’s rights to these new federal protections. For most planned surgeries, the procedure is already in-network for the primary surgeon, but other providers (like anesthesiologists) may ask patients to sign the form that would open the patient up to be given a surprise bill, increasing the out-of-network providers’ profits along the way.

The law stops short of protecting patients from receiving surprise bills from ambulance rides even though many ambulance providers are out of network. Lawmakers are studying the topic before adding protections, but air ambulances are covered in the new law.

While the patient might not see the bill, the providers and payers still have to determine how much of the bill is covered. The Texas Medical Association, which represents 56,000 physicians and medical students in Texas, is pushing back against part of the rule that they say favors insurers when arbiters resolve the payment disputes.

TMA’s legal challenge to the rule last fall says it reduces access to care and increases healthcare consolidation. The rule states that arbiters should use the “qualifying payment amount” when determining the out-of-network rate. QPM is the median in-network rate for a specific service, but TMA says that rate will be deflated because of the federal agencies’ methodology. TMA wants arbiters to consider a range of factors when determining the rate, as it says the law was designed to do.

The rule, TMA (as well as the American Hospital Association and American Medical Association) argues, will unfairly benefit insurers to keep the negotiated rate down. Considering more factors when determining an out-of-network rate makes healthcare more sustainable, the suits claim. The provider advocates say the rule would discourage meaningful providers and insurer negotiations, making smaller networks, and not be financially sustainable for teaching hospitals, physician practices, and other providers.

“The last thing federal regulators should do is make healthcare more expensive and less accessible for people when they need it, especially during a pandemic,” said TMA President Dr. E. Linda Villarreal via release. “The courts must reject the federal agencies’ flawed approach because it goes against the public interest and our democratic process.

Balance billing is part of what is causing medical spending to skyrocket in the U.S. Prices for medical care have risen more than almost any other expense. Even before the pandemic, according to the Centers for Medicare & Medicaid Services (the CMS), healthcare spending in this country was $3.8 trillion, or $11,582 per person. By 2028, the CMS predicts, healthcare spending will exceed $6 trillion, nearly 20 percent of GDP.

Despite all the spending, the United States ranks behind most developed nations regarding healthcare outcomes. We spend about twice as much as other countries in the Organization for Economic Cooperation and Development but have a lower life expectancy and higher suicide rates.

Texas was a leader in pushing for surprise bill protections, but the federal rule is more impactful. North Texas State Senator Kelly Hancock led several efforts to provide protection in Texas against surprise bills, including several successful bills over the last decade adding protections for patients, but any bills passed in the Texas Legislature only impact state-sponsored health plans such as those for state employees and teachers. That is at most 15 to 20 percent of patients in any given market. Most people have insurance through their employer, and those plans are governed by the federal government.

The fight is likely to continue, no matter what happens with this round of legal challenges. The AMA and AHA are usually two of the top spending organizations in the country when it comes to who spends the most on lobbying lawmakers, but Blue Cross Blue Shield is usually in the top ten as well.

“Our law is a success in that it’s protecting so many people, but it is unfortunate that we have so much going to arbitration and so much less happening in the informal process,” TAHP CEO Jamie Dudensing told D Magazine. “We have providers deciding to stay out of network and rely heavily on inflated bill charges-based arbitration.”

It isn’t clear how the bill will be enforced in Texas, but the Texas Association of Health Plans encourages patients to call the provider’s office and health plan if they receive a surprise bill. Patients can also file a complaint about a physician with the Texas Medical Board here and the Texas Health Human Services here, if the complaint is about a hospital or other facility. Oral arguments for TMA’s suit is set for Feb. 4.

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Will Maddox

Will Maddox

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Will is the managing editor for D CEO magazine and the editor of D CEO Healthcare. He's written about healthcare…

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