When Cigna wished to chop reimbursements for a doctor group, the medical health insurance firm got here armed with a brand new negotiating software: the No Surprises Act.
The insurer notified a medical follow final week that its contracted fee was not aggressive due to the federal ban on shock billing, in keeping with an electronic mail supplied to Trendy Healthcare. Certainly, Cigna wrote, it was requesting fee reductions for all suppliers with the identical specialty.
Cigna repeatedly evaluations contracted charges it deems above-market with an eye fixed towards bringing them down, a spokesperson wrote in an electronic mail. And the corporate would not routinely cite the No Surprises Act as a motive to alter fee ranges, the spokesperson wrote.
But written notices from Cigna and different medical health insurance corporations citing the No Surprises Act point out that the brand new regulation is influencing insurers’ in-network and out-of-network negotiations with suppliers. Whether or not that is a very good factor depends upon who you ask.
Physicians level to those messages as proof that medical health insurance corporations try to leverage the shock billing ban to strong-arm them into accepting decrease funds. Insurance coverage carriers are looking for pay cuts as excessive as 50%, American Medical Affiliation President Dr. Jack Resneck Jr. wrote in an electronic mail.
“We proceed to speak our issues to regulators that these payer techniques will result in insufficient networks or entry points,” Resneck Jr. wrote. “The AMA is monitoring this case and can work relentlessly to beat again these cynical ploys.”
Insurers argue they’re working to decrease prices for sufferers, notably amongst personal equity-owned specialty suppliers that cost exorbitant charges.
In February, CVS Well being’s Aetna refused to pay greater than the speed outlined within the No Surprises Act for providers the air ambulance firm World Medical Response offers its members, in keeping with a invoice the Greenwood Village, Colorado-based agency submitted to regulators. Aetna didn’t reply to interview requests.
Blue Cross and Blue Protect North Carolina, which declined to remark, referenced the No Surprises Act in letters despatched to suppliers in March and November 2021, writing that it will finish contracts with anesthesiologists, radiologists, emergency physicians and others until they agreed to fee reductions of as much as 30%.
UnitedHealth Group subsidiary UnitedHealthcare likewise requested a 40% lower, in keeping with a letter the American School of Emergency Physicians despatched to the North Carolina congressional delegation in March.
North Carolina physicians cost among the highest charges nationwide, with some out-of-network medical doctors billing at greater than 1,000% of Medicare charges, a UnitedHealthcare spokesperson wrote in an electronic mail. “The No Surprises Act is bringing larger value transparency to the healthcare system and at last placing an finish to the financially crippling shock payments that customers have struggled with for years,” the spokesperson wrote.
Docs who settle for these reimbursement cuts would battle to maintain their practices open and people who reject them would solely be obtainable out-of-network, mentioned Ed Gaines, vice chairman of regulatory affairs and trade liaisons at income cycle administration agency Tech Companions. Each outcomes threaten affected person entry, he mentioned. Well being programs are already fighting rising prices because of inflation, labor shortages and looming Medicare pay cuts, mentioned Gaines, who sits on the American School of Emergency Physicians’ reimbursement committee.
“It is a reimbursement excellent storm like I’ve by no means seen in my 30 years,” Gaines mentioned. No less than three of his firm’s emergency and anesthesiology shoppers have obtained comparable notices from Cigna, he mentioned.
Cigna and different insurance coverage corporations are targeted on terminating contracts to scale back the median in-network charges they pay physicians, mentioned Amanda Hayes-Kibreab, a companion in King & Spalding’s healthcare and life sciences group who represents suppliers in fee disputes. This fee is called the qualifying fee quantity below the No Surprises Act and represents a vital knowledge level to find out what suppliers in the end receives a commission.
The brand new regulation requires events that can’t come to agreements to enter a mediation course of rolled out earlier than ultimate steering was issued on how arbiters ought to resolve fee disputes. The Facilities for Medicare and Medicaid Providers directed arbiters to base fee selections, partly, on the qualifying fee quantity that insurers set. Medical health insurance corporations are slicing ties with expensive suppliers as a technique to decrease this fee and benefit from the arbitration system, Hayes-Kibreab mentioned.
“As they decide off their larger fee contracts, their [qualifying payment amount] goes to go down. It creates a race to the underside,” she mentioned. “I do not suppose that is essentially what Congress or CMS meant when the No Surprises Act was handed, and it isn’t a optimistic improvement for managed care.”
CMS plans to challenge a ultimate rule this summer time that establishes the elements arbiters should think about when ruling on fee disputes and spells out how a lot weight arbiters ought to give to the qualifying fee quantity, mentioned Jack Hoadley, a well being coverage professor emeritus at Georgetown College’s McCourt Faculty of Public Coverage.
“Folks weren’t writing the regulation for the aim of adjusting the best way community contracts had been negotiated, however I feel it was definitely anticipated that it will impact negotiations,” Hoadley mentioned.
The Congressional Funds Workplace estimated in 2019 that the No Surprises Act would cut back medical health insurance premiums by as much as 1%. Greater than 80% of those financial savings would come from renegotiated in-network contracts as a result of the overwhelming majority of affected person care is delivered in-networks, in keeping with the CBO. The regulation might enhance supplier pay, too. Paired with new laws that require insurers and suppliers to reveal negotiated charges, suppliers might leverage that data to demand larger reimbursements, mentioned Loren Adler, affiliate director of the College of Southern California-Brookings Schaeffer Initiative for Well being Coverage.
“The factor individuals at all times miss is that the median is larger than what half of medical doctors receives a commission,” Adler mentioned.
The No Surprises Act goals to discourage personal equity-owned specialty doctor practices from avoiding insurance coverage networks to generate income by stability billing sufferers. Insurers citing the regulation to set decrease charges are furthering that objective, Adler mentioned. “It is a optimistic signal that the regulation is working as meant and will find yourself lowering premiums,” he mentioned. “The market dynamics seem to have shifted barely in order that the enjoying discipline is just a little bit extra stage now.”