WASHINGTON – Patients are losing access to care and their health insurance covers fewer doctors, while medical providers are struggling to get reimbursed for services provided, all because of the flawed implementation of the bipartisan No Surprises Act of 2020. At a hearing before the Ways and Means Committee, witnesses testified that the system set up by unelected federal bureaucrats is leading to doctors being dropped from insurance networks and receiving significantly lower reimbursement rates that are making it harder for them to pay the staff needed to provide quality health care. Equally concerning, federal agencies have thus far failed to implement the law’s “Advanced Explanation of Benefits” provision – an important tool that was promised to America’s patients so they could know the cost of health care services before they walk into a medical facility.
The law called for a dispute resolution process for medical providers and insurers, overseen by independent mediators, to negotiate a fair payment for surprise or out of network services given to patients. So far, that fair system has not been implemented and multiple lawsuits have plagued the process with unpredictable starts and stops while medical providers are waiting to receive payments from insurance companies, even after a dispute has been resolved.
Patients Pay the Price for Insurance Companies Kicking Doctors Off Their Networks
Chairman Smith (MO-08) pointed out the flawed implementation of the No Surprises Act has led to doctors and hospitals being removed from insurance networks leaving medical providers, especially those in rural communities, to reduce hours and staff available to care for patients.
Chairman Smith: “One of the areas of fallout that we have seen from the flawed implementation of the No Surprises Act is how the regulations incentivize health insurers to limit the number of physicians with whom they have contract agreements to cover their services. What does that do for patients’ access to care, especially forthose living in rural and underserved areas, who already suffer from a lack of care options?”
Dr. Bleier, emergency room doctor: “If physicians are excluded and become out of network, basically, that reduces their reimbursement and their reimbursement is what covers the staffing hours, adding additional provider coverage to those needing emergency departments. And by reducing physician hours, emergency medicine provider hours, that reduces the care that those patients need, so it has a downstream effect unfortunately.Without that additional reimbursement, we aren’t able to potentially provide the same level of care that we ordinarily would want to those rural emergency departments who are already suffering for a number of different reasons.”
Hospital Administrator: Insurance Only Paying One-Third of Claims We Won Under “No Surprises Act” Dispute Resolution Process
Medical providers have no enforcement mechanism to use when health insurance companies refuse to make payments after going through the dispute resolution process.One hospital administrator told Rep. Ron Estes (KS-04) that the unwillingness to reimburse providers extends even to claims decided in the medical provider’s favor.
Rep. Estes: “Mr. Budzinski, I’ve heard from many providers in my state about the incredible wait times for not only the independent dispute resolution [IDR] process,but also for receiving payment once the IDR process has been concluded. Can you please tell me how many of these IDRs you’ve gone through and how many that havebeen paid for successfully?”
Mr. Budzinski, hospital administrator: “Of our 8,000 requests for determination, 588 have been resolved. 288, I believe are in our favor. And unbelievably, only one-third of those determinations in our favor had been paid by insurance companies, and the deficiency is with some of the largest insurance companies in this country.”
“Stop and Go”: Federal Agencies Stirring Uncertainty
Federal courts have frequently ruled against federal agencies for their flawed implementation of the dispute resolution process in the No Surprises Act. Consequently, the entire process has been suspended since August. As Rep. Blake Moore (UT-01) pointed out, the suspension leaves both the independent mediators overseeing the process and medical providers in limbo.
Rep. Moore: “Can you speak to the operational challenges that this ‘stop and go’ implementation of this law has had, particularly on IDR [independent dispute resolution] entities?”
Mr. Bobeck, dispute resolution process mediator: “From the IDR perspective, the biggest thing that happens with the start and stop nature of the process is essentially that you need to be able to staff up for a process that you’re never quite sure when it’s going to begin again. And then also have a staff that is ready to handle a tsunami surge of cases when it starts back up again. So the biggest thing we have to look for in all of our staff is ‘Are you prepared for flexibility?’ This process is only going on for one year, so if you look for experts in the IDR process over one year, you will not find them. So the people that we have on staff we need to maintain them even if they don’t have anything to do. We are maintaining them for their expertise and their knowledge.”
Patients May Not Be Able to Find Doctors That Accept Their Insurance
Access to health care is already an issue for many Americans, particularly those in rural communities facing severe health care staff shortages. In response to Rep. Mike Carey (OH-15), a New York community health advocate shared that the health provider shortages faced by her clients will be made worse if the implementation of the No Surprises Act is not fixed.
Rep. Carey: “Do you have any concerns that patient access to care, which is already in jeopardy due to the health care workforce challenges that we face, will be diminished due to the implementation of this law at all?”
Ms. Spicer, community health advocate: “As community health advocates, we see access to care issues every day. In my career of 24 years, I’ve always had clients who call me and say I can’t find a provider in my network that does a certain thing. It seems that if the arbitration process isn’t fixed, that could be a result.”
Oversight of No Surprises Act is Bipartisan Priority
The No Surprises Act was and is a priority for members on both sides of the aisle. Rep. Earl Blumenauer (OR-03) asked a witness how the federal agencies responsible for implementing the law could force insurance companies to negotiate a fair price with medical providers. The witness, a hospital administrator, shared concerns about the practice of insurance companies refusing to cover basic services, like visits to the emergency room.
Rep. Blumenauer: “Mr. Budzinski, you talked about large insurers who refuse to negotiate. Could you elaborate on what you think we can do, to try and remedy that, to make sure that people are playing by the rules, operating in good faith and doing the roles that have been assigned to them?”
Mr. Budzinski, hospital administrator: “I think the number one framework of this phenomenon is that the unintended consequences of how this has been implemented is … [large health insurers] are selling insurance in counties where they don’t have any emergency departments in-network. How is that possible? The reason is they don’t have a need to have an in-network emergency department. They don’t have to negotiate with a hospital or health system or physician group, because they can use the No Surprises Act process as it’s currently being implemented to pay in-network rates for out of network care…I’ve been in the health care finance business for over 40 years. That has never been the case…”
Background: The No Surprises Act is a bipartisan law that bans the practice of sending surprise medical bills, frequently tens of thousands of dollars more than expected, to patients unknowingly treated by a provider not covered by their health insurance. The law also established an independent dispute resolution process to settle payment disputes between health insurers and health care providers.