December 13, 2020
Dear TOA Member:
The end of each calendar year typically results in major public policy proposals, and this year is not an exception.
The following is a quick look at a few issues that presented over the past few days. TOA will have greater details for you later this week.
United Pulls Back Its Liability Coverage Policy
UnitedHealthcare (UHC) announced that it will pull back its liability coverage policy, which was scheduled to go into effect on March 1, 2021.
Thanks to AAOS for getting involved.
Medicare Proposes Prior Authorization Standards
The Centers for Medicare and Medicaid Services (CMS) proposed a new prior authorization rule on December 10 that would affect Medicaid, Children's Health Insurance Program, and Qualified Health Plan payers. However, qualified health plan issuers in the marketplace and Medicare Advantage plans would be excluded, and that disappointed stakeholders such as the American Hospital Association.
"The proposed rule is a welcome step toward helping clinicians spend their limited time on patient care," Ashley Thompson, senior vice president of public policy analysis and development for AHA, said in a statement. "We urge the agency to reconsider and hold Medicare Advantage plans accountable to the same standards."
The proposed rule would:
- Cap the amount of time it takes for payers to issue decisions on prior authorizations to 72 hours for urgent requests and seven days for non-urgent ones.
- Require payers to include a specific reason when denying a prior authorization request -- regardless of how it was submitted -- and to publicly report data about their prior authorization process.
- Medicaid, Children's Health Insurance Program and Qualified Health Plan payers would be required to develop a platform for payer-to-provider data sharing of claims and encounter data, with the desired outcome to allow physicians to know in advance what prior authorization paperwork they need and integrate the platform with a provider’s electronic health record so they can send and receive responses electronically.
CMS's prior authorization proposal is timely because Texas lawmakers recently asked for recommendations related to prior authorization in the 2021 Texas Legislature.
Congressional Agreement on Out-of-Network Surprise Billing
The U.S. House committees with jurisdiction over commercial health insurance announced a deal on surprise billing and out-of-network charges on Friday night. It is unclear if the U.S. Senate will accept the deal.
The bill would eliminate surprise billing for emergency out-of-network services. However, an arbitration process (independent resolution process) would be created for physicians to challenge the payments made for out-of-network care. This is similar to what the 2019 Texas law (SB 1264) allows for health plans that are regulated by the state of Texas.
Surprise billing would be allowed for elective care if the physician provides an estimate prior to the service, which mirrors Texas law.
Surprise billing is an additional bill that is sent to a patient for an out-of-network service on top of the deductible, co-payment, and co-insurance. It can also be referred to as "balance billing." Nomenclature is everything in politics; call it what you wish.
As you can tell from the state of Texas' report on the Texas law, orthopaedic surgeons rarely surprise bill. However, some assisting surgeons and surgical assistants did appear in the state's arbitration data. (Click here to view the report on Texas' new law.)
This federal proposal is significant because Congress has jurisdiction over ERISA (employer) plans, which represent the vast majority of the commercial plans sold in Texas. And President Trump directed Congress to create a ban on surprise billing for out-of-network services by the end of the year.
The issue could experience changes over the next few days (or even die). But TOA does want you to have knowledge of what is on the table. (Even if you are not out of network, this will affect every aspect of medicine.)
Texas' Current Law
The 2019 Texas Legislature banned surprise billing for emergency services for out-of-network care and created a patient estimate for elective care through SB 1264:
- Texas does not have jurisdiction over ERISA plans; it only affects individual market (Obamacare) plans, some small groups, and state employee plans. Texas has jurisdiction over a couple million Texas lives.
- It created an arbitration dispute resolution process for physicians to dispute out-of-network payments. The Texas law is similar to the New York law. Perhaps the greatest significance of the Texas law is that it directs the arbitrator to take FAIR Health rates into consideration. (More on that related to the federal proposal below.)
- State lawmakers listened to organizations like TOA and created an exemption for balance bills for non-emergent care if the patient signs off on an estimate.
Click here to view the analysis of SB 1264 prepared by the Texas Department of Insurance from December 1.
Federal Proposal: Section-by-Section Analysis
Click here to view the section-by-section analysis that was created by the U.S. House Energy and Commerce Committee.
The legislative text isn't too prescriptive. Therefore, it will up to federal regulators to define many of the parameters.
How Does the Arbitration Differ Between the Texas Law and This Proposal?
The key differences include:
- Texas law includes language that requires the arbitrator to take into consideration the FAIR Health database. This federal proposal specifically includes language that does not allow the arbitrator to take into account the usual, customary and reasonable (UCR) rates.
- Texas law does not refer to median in-network rates. However, this legislation would take into account median in-network rates.
- The physician and health plan split the arbitration costs in Texas. The loser would pay under the federal legislation.
The Health Plans Don't Like Arbitration
The health plans created a coalition to "stop surprise billing," and, as you can tell by their press release as you can see at the bottom of this e-mail, they don't like the proposal.
"I Don't Perform Out-of-Network Care. So This Doesn't Affect Me."
Every physician - in-network, private practice, employment model - will ultimately be affected by this proposal in the long run.
There's a chance that the proposal may experience significant changes, or even death, by the time you open this e-mail. But it does feature momentum.
We will need to see how Mitch McConnell and the U.S. Senate will react: they have to accept it.
Based on the press release below, it appears that the health plans do not like the arbitration element found in the proposal. But is that enough for them to completely oppose the legislation?
How will the national medical groups respond to this legislation? TOA will, of course, defer to AAOS on it.
Expect much more over the next few days.
Also, we're just a month away from the 87th Texas Legislature in Austin. If you think that the decisions in Washington have an impact on the practice of medicine, just wait until the Texas Legislature meets.