A Last-Ditch Effort to Overturn the Surprise Billing Ban: Will Doctors and Hospitals Be Successful

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Patients have been hit with hefty, unexpected bills for years when they seek treatment from hospitals or doctors who are not part of their insurance company’s network. It frequently occurs when patients seek treatment at an in-network hospital, but the insurance plan does not cover the physician who treats them. The insurer would only cover a portion of the payment, leaving the unsuspecting patient to bear the price.

Hospital and doctor associations have filed a lawsuit to block part of a new ban on surprise medical billing that will begin three weeks before.

The lawsuit was filed by the American Medical Association, the American Hospital Association, and a few individual hospitals and providers, claims that the Biden administration’s regulators misinterpreted the law’s terms, which may cause harm to medical providers.

The lawsuit does not seek to abolish the law’s consumer protections, but it may have an impact on insurer and healthcare provider contract negotiations. If the lawsuit is won, it could have an effect on whether doctors and hospitals opt to engage in insurer networks, perhaps leading to higher insurance costs.

The Centers for Medicare & Medicaid Services highlighted a Congressional Budget Office analysis in releasing the regulation. According to the research, the No Surprises Act would reduce health insurance premiums by around 1 percent and save $17 billion off the federal deficit.

The bipartisan legislation, which was passed after years of research and debate in Congress, is intended to deter patients from receiving a surprise bill from a physician who doesn’t take their insurance when they go to a hospital that does accept it. It addresses a key problem in the healthcare system: According to various studies, about 20 percent of patients who attend an emergency room are treated by an out-of-network provider.

The rule, which is set to take effect in January 2022, effectively excludes patients from the argument. According to the new regulations, providers and insurers must figure things out amongst themselves.

The law forbids such doctors from charging patients directly. When a physician and an insurance provider can’t come to an agreement on a reasonable fee, the law creates an arbitration system in which the parties can seek a judgement from a neutral expert.

“The departments have no authority to discard Congress’s judgment that training and experience are important considerations in determining the appropriate payment rate, even if they disagree with it,” the lawsuit says.

When Congress was contemplating the law, doctors and hospitals lobbied hard, helping to scuttle an earlier bill that would have mandated the standard price without allowing for an arbitration procedure.

Insurers and medical providers both hailed the final version of the legislation, which included the arbitration option.

The Business Group on Health, which represents large employers, applauded the rule in a comment, calling it “a thoughtful and balanced approach to the interests of the various stakeholders.” The American Heart Association claimed its support for the regulation mentioning the rule “will produce reliable and consistent results that do not have an inflationary impact on health care costs.”

Some members of Congress who worked on the law have expressed similar dissatisfaction with the regulation, claiming that it is not what they envisioned when they drafted it. On the other hand, other important authors have praised the regulatory approach.

The medical providers will have to establish that the Biden administration was “arbitrary” or “capricious” in its reading of the legislation or that it lacked statutory authority to win the lawsuit, which is a high standard. The legislation’s language specifies that arbiters should consider the various elements, but it doesn’t say how they should be weighed.