The state has issued a legislatively mandated report on the provider reimbursement aspect of “surprise billing,” which surprisingly offers a solution that is in opposition to the federal bill on the issue that was the result of a hard-fought bipartisan compromise.
Surprise billing is a contracting issue that can catch patients in the middle of a payment dispute between a payer and an out-of-network provider, often leaving the patient with an unexpected bill for services. New federal and state laws will prohibit such billing beginning January 1, 2022, and all sides agree with holding the patient harmless. The issue is how to reach agreement between the provider and health insurance company on what to pay the provider.
The federal No Surprises Act, which U.S. Representative Richard Neal (D-Mass.) was instrumental in forging, fully protects patients from such billing. It contains an independent dispute resolution (IDR) provision, which allows both providers and insurers to come to the table with their best offer in a baseball-style arbitration process if negotiations are unsuccessful. Such an IDR process has worked in states such as New York and New Jersey.
But unfortunately, in the state report issued last Wednesday, the state’s Executive Office of Health and Human Services instead recommends establishing a default rate for non-contracted out-of-network emergency and non-emergency services that would be based on the insurer’s median in-network rate.
MHA, as well as the state's physician community, has consistently opposed setting default rates because it interferes with the private negotiation process and can have significant unintended consequences, including the ability for health insurance companies to reimburse at a low out-of-network rate, diminishing any incentive for them to contract with providers.
“The fair and balanced IDR approach protects patients, avoids government-mandated rate setting, and doesn’t tip the scales in favor of large national insurers,” said MHA’s Senior Vice President of Government Advocacy and General Counsel Mike Sroczynski. “State-mandated rates could limit access to needed healthcare expertise, especially in underserved communities. We look forward to working with the Baker Administration and legislature to ensure that moving forward, our surprise billing policies in Massachusetts minimize unnecessary conflict and confusion by aligning with federal law and treating all patients equally -- regardless of their insurance type.”