Legal UpdateOctober 2021
Surprise, Your Pay Is Going Down!This last year has been a perfect storm of disasters for us in emergency medicine (EM). COVID-19 prompted patients for the first time in the recallable past to avoid the emergency department (ED). The precipitous and persistent decline in patient volumes caused many ED’s around the country, including Texas, to close. To add insult to injury, we have been training more EM docs than the foreseeable available full-time positions. Moreover, the growing models of one or more EM docs with supporting nurse practitioners and physician assistants (associates?) have eliminated even more full-time EM opportunities. The cherry on top will soon be our inability to balance bill patients for out-of-network care obtained in our ED’s. Balance billing, otherwise known as “surprise billing,” is when a patient (knowingly or unknowingly) obtains medical care from an out-of-network provider or facility and then receives a bill for the difference (balance) between the in-network and out-of-network charges. “In-network” and “out-of-network” refer to the agreements (contracts) providers and facilities have with the various insurance companies for a multitude of services. The difference between in-network and out-of-network charges can be quite significant and economically devastating, which is why the issue has garnered the attention of many state and federal legislators. There are many differing opinions on this subject, as there are also a multitude of situations in which a balance bill can be generated. For example, a patient may get into a serious auto accident and be transported to an out-of-network hospital, with out-of-network providers, by EMS. This patient had no opportunity to elect an in-network facility, but would still likely be balance billed for the difference between the in-network and out-of-network charges. On the other hand, the same patient involved in a minor auto accident may choose to drive themselves to the same hospital, out of convenience, irrespective of their knowledge the facility is out of their insurance network. This patient too would receive a balance bill. As you can see there is considerably more sympathy for the patient that got stuck with an out-of-network bill, which was due to no fault of their own. Other situations that may generate a balance bill are when a patient presents to an in-network facility, but sees an out-of-network provider, such as the ED doc, anesthesiologist, or general surgeon. Patients have cried foul that this scenario, in particular, is deceptive and confusing, which has brought about recent state and federal legislation. Beginning January 1, 2020, a new Texas law went into effect prohibiting balance billing on state-regulated insurance plans and people with coverage through the state employee or teacher retirement systems, which encompasses about 20% of Texans. The law bans balance bills in emergencies or when the patient didn’t have a choice of doctors for medical services received on or after January 1, 2020. Clearly, the definition of “emergencies” has evolved over the years and what constitutes patient “choice” is another arguable semantic ambiguity. Nevertheless, The Texas Department of Insurance has created a process whereby a neutral arbitrator or mediator will resolve any disputes that arise when there are NOT emergencies or when the patient has purposefully chosen an out-of-network provider. In a similar light, Congress recently enacted the “No Surprises Act,” which eliminates balance billing across the board nationwide. This Law goes into effect January 1, 2022. The Law, which applies under parallel situations as the Texas Law, removes patients from the billing and negotiation process where the Law applies. When the law does apply, payments to providers will be the “lesser of the billed charges or the plan/insurer’s median contracted rate.” As you can likely see, this will create many circumstances in which provider payments will decline. You may also notice that the formula above is NOT based on the mean provider charged rate, but instead uses the plan or insurer’s median contracted rate. This scenario leaves the opportunity for some “cat and mouse” games with what actually qualifies as the median contracted rate and who will be responsible for auditing the insurance company’s books to ensure accuracy of the numbers. The presumption in the wording of the Law is that the insurance companies can be trusted to determine and provide the median contracted rate, but the providers cannot be trusted to provide their median charged rate. Since the insurance companies are economically incentivized to divulge a lower contracted rate, the patients will ultimately win and the providers will end up receiving a lower remuneration. Furthermore, since providers will soon be forbidden from balance billing under most circumstances, our total compensation will certainly decline. While you’re enjoying your third shot of tequila reading this unfortunate economic news, there may be some quasi “bright” spots that may emerge. The second surge of COVID has dramatically increased ED volumes. Patients are no longer avoiding the ED, as they did during the first surge. A sicker group of patients also increases the proportion of critical care time we are able to charge for care delivered. Additionally, apathy on the part of many Americans to adopt COVID vaccinations assures us that a perennial or seasonal exacerbations of the virus (and patient volumes) are likely to linger for some years to come. The Department of Health and Human Services, Department of Labor, Department of the Treasury, and Office of Personnel Management are continuing to haggle on the final rules and implementation of the Law that Congress passed. What I fear, as has been the case with other draconian Congressional acts, is that private companies and EM groups will be unable to sustain themselves with the loss of balance billing income. This ripple effect may lead to inevitable forced EM employment by hospitals and/or closure of facilities unable to sustain themselves without the ability to balance bill. Let’s all be hopeful that my fears do not play out. As January 1, 2022 rolls closer, I’m sure clarification of the rules and what to expect will become clearer. Until then, please be safe. Kenneth Alan Totz, DO, JD, FACEP No information within this publication should be construed as medical or legal advice. Independent medical and/or legal advice should be sought based on each individual’s particular circumstances. |
