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The American Society of Anesthesiologists has accused BlueCross BlueShield of North Carolina of abusing new federal law designed to protect patients from out-of-network bills.
Essentially, the ASA is underlining what it sees as proof of its prognostication to Congress: that insurers would use loopholes in the No Surprises Act to leverage their market power in such a way as to push physicians out of insurance networks in the interest of boosting their finances. The group sees BCBS’ intended actions as the first bellwether of this trend, and is worried specifically about anesthesiologists’ ability to fully staff hospitals.
The letters sent by BCBS to anesthesiology and other physician practices in the state threaten contract termination and the physicians’ in-network status unless the physicians immediately agree to payment reductions ranging from 10% to over 30%, according to ASA. Implementation of the No Surprises Act is cited in the letters as the impetus for the reductions.
ASA interprets BCBS’ intent as improving its negotiating position against community physician practices in the dispute resolution process outlined in the recently released interim final rule implementing the legislation.
BCBS, for its part, said federal law now allows for a significant change to its contracting approach with emergency service providers, hospital-based providers and air ambulance services.
“Where previous state law could result in an obligation to pay at full charges if no contract is in place, the new law sets reasonable limits on payment at the median in-network rate,” BCBS wrote in its letter. “Where Blue Cross NC may have previously contracted at what we deemed an inflated rate that is at least somewhat lower than charges in order to avoid paying at full charge, we are now able to seek a contract at a rate more in line with what we consider to be a reasonable, market rate.”
While exact Qualifying Payment Amounts aren’t yet available, pending the finalization of rules to the No Surprises Act, BCBS interprets the Interim Final Rules as providing enough clarity to warrant a significant reduction in contracted rates.
BCBS said that if it’s unable to establish in-network rates more in line with “a reasonable, market rate,” the plan is to terminate agreements in which the resulting out-of-network QPA “would reduce medical expenses to the benefit of our customers’ overall premiums.”
To that end, BCBS is seeking an immediate reduction in rates under the commercial agreement, which the insurer said would buy it some breathing room to negotiate the final rates in light of the upcoming QPA amounts. The interim reduction in rates, said BCBS, would mean the insurer would not need to quickly terminate “outlier” contracts as a means of avoiding payment levels that are higher than the default.
The insurer’s proposal is for a 15% reduction by December 15. If agreed to, BCBS said it would provide a rate amendment. If no agreement is reached, the organization plans to move forward with terminating the contracts.
WHAT’S THE IMPACT?
The No Surprises Act, passed in December 2020, was designed to protect patients from surprise out-of-network bills. It goes into effect in January 2021.
The law intends to resolve payment disputes through an impartial arbitration system. But ASA claims that recent rules promulgated by the Departments of Health and Human Services, Labor, and Treasury create a system that unfairly favors insurance companies. This week it cited BCBS’ letters as evidence of bias.
“Instead of expanding in-network access for patients, BlueCross BlueShield of North Carolina has demonstrated what we explained to Congress and the rule-making agencies would happen: Insurance companies will use their overwhelming market power and the No Surprises Act’s flawed rules to push more physicians out of insurance networks and fatten their own bottom line,” said ASA President Dr. Randall Clark.
“Insurance companies are threatening the ability of anesthesiologists to fully staff hospitals and other healthcare facilities. Left unchecked, actions like these of BlueCross BlueShield of North Carolina will ultimately compromise timely access to care for patients across the country.”
ASA had previously called on the U.S. Department of Justice to address what it called “anticompetitive insurance company tactics.”
THE LARGER TREND
Surprise billing occurs when a patient sees an out-of-network provider during an emergency, or in a nonemergency case in which a patient sees an in-network provider but gets care from an out-of-network provider, such as an anesthesiologist.
Also, some providers balance bill patients for the difference between what the insurer pays and the full charge for out-of-network care. Balance billing is already banned in somes states.
Surprise billing has left many patients vulnerable to the financial burdens during a nationwide pandemic. Research shows that 41% of insured adults nationwide were surprised by a medical bill in the past two years and that two thirds of adults worry about their ability to afford an unexpected medical bill.
Congress passed the No Surprises Act in December 2020, which prohibits most surprise out-of-network billing for plan years beginning in 2022. Specifically, it requires plans to apply in-network cost-sharing and prohibits out-of-network providers from balance billing on surprise medical bills.
The act, however, does not apply to bills from ambulances – which is important, because as many as 1.5 million privately insured patients are brought to an emergency room by an ambulance and may be at risk of getting a surprise medical bill each year, according to the Kaiser Family Foundation.
Although the No Surprises Act doesn’t address surprise ambulance bills, it does require that a federal advisory committee convene to review and recommend options to protect patients from them.
This week, the government released a report showing that millions of Americans with private health insurance experience some kind of surprise medical billing. Surprise medical bills are relatively common among privately-insured patients and can average more than $1,200 for services provided by anesthesiologists, $2,600 for surgical assistants and $750 for childbirth-related care, according to the report from the Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation.