News in Medical Billing and Coding Services: Surprise Billing Ruled Illegal Again

The No Surprises Act is in the news yet again to start off 2023, promising more disruption for medical billing and coding services. 

On February 6 of this year, District Judge Jeremy Kernodle issued another judgment in favor of the Texas Medical Association (TMA) – one that providers across the country will look at positively. He ruled that a revised arbitration process favors insurers and that challenges to parts of the final rule are unlawful. The president of the TMA, Gary Floyd, MD, weighed in with his opinion. “The decision will promote patients' access to quality care when they need it most and help guard against health insurer business practices that give patients fewer choices of affordable in-network physicians and threaten the sustainability of physician practices." [1]

The suit, which was originally filed in September, was done in conjunction with UT Health Tyler Regional Hospital and a physician and gained the support of 30 other national and state medical groups in the form of amicus briefs. Insurers have presented the idea that providers were baseless in claiming there were “early signs of a beneficial trend, where the [No Surprises Act] has furthered good faith network negotiations over reasonable rates." The insurance trade group AHIP, stepped out in support of HHS [1]. 

Previously, the TMA filed a lawsuit in October of 2021 which challenged the rule with the claim that it didn’t follow direction from Congress in implementing the dispute resolution process. It was called “short-sighted” and accused the rule of driving down reimbursement rates while encouraging insurance companies to narrow networks. It was ruled against by a federal judge in February 2022. 

As this piece of legislation continues to pop up in the news, providers considering the future of their medical billing and coding services will benefit from understanding it from the beginning. 

The term “surprise medical bills” refers to the situation in which insured consumers receive care from an out-of-network provider like a hospital, doctor, or provider they didn’t choose, inadvertently triggering billing they didn’t authorize. This has been found to happen in around one out of five emergency room visits. On the non-emergent care side, about 9%-16% of in-network hospitalizations have been found to potentially include unexpected bills from an out-of-network provider like an anesthesiologist the patient had no hand in selecting. These bills are an issue for patients because they often result in significant financial burden through denials or out-of-network cost sharing. Consumers are also subject to “balance billing” from providers that are out-of-network that don’t have contracts to accept discounted payment rates from a health plan. The bill potentially applies to around 10 million surprise, out-of-network medical bills each year. 

This most recent news addresses the arbitration process which allows for the determination of surprise bills through negotiation between providers and insurance plans and, if negotiations are not effective, the use of an independent dispute resolution (IDR) process. 

But the dispute resolution process has remained a challenge, with providers issuing more submissions for appeal than was expected. Providers have made such heavy use of the IDR process that the system has become clogged and in response, the Biden administration has raised fees for engaging in the process. In December of 2022, the Treasury Department and the Department of Health and Human Services (HHS) made a significant increase in the resolution fee, increasing it to $350 from $50 per party for each disputed claim. The goal was for the fee to be a deterrent to use. These charges went into effect January 1, 2023 [2].

Providers who care about their medical billing and coding services and work with medical coding outsourcing companies are keeping a close eye on how the bill could impact patients. This is because patient perception impacts how they choose providers and, as more patients are aware of what the practice of surprise billing can mean for them, they will predictably weigh that in their decision-making. For example, before regulation became more intense, private equity firms were taking advantage of the opportunity to bill out-of-network services from tens of thousands of physicians which they used to staff hospitals. This included the emergency department, which left patients caught in the middle.

So, what does all this mean for providers? It means a rocky future for surprise billing and arbitration, complicating billing strategies for providers across the country. Many leaders will not only have to consider the impact of their contract negotiations, but also how their approach to medical billing will intersect with future changes in the legislation. Some providers who have already considered medical coding outsourcing companies are also looking to outsource medical billing to relieve themselves of challenging decisions as the legislative environment continues to evolve. If you are in this position and want to talk more about how the No Surprises Act could impact your organization, contact us today.