The 'No Surprises Act' is a License To Steal

 - December 1, 2022, 7:32 AM

The air ambulance lobby is charging that the federal “No Surprises Act” (NSA) has become little more than a license to steal. 

Consequences for the nation’s air ambulance industry could be dire, according to Christopher Eastlee, the Association of Air Medical Services (AAMS) vice president for public affairs. Eastlee claims health insurers are using the NSA to “diminish payments over time” and the result could force air ambulance services to close. More broadly, “the entire health care structure is at risk.”

The NSA went into effect on Jan. 1, 2022. It was supposed to take patients out of the middle when it came to payment disputes between health care providers, including air ambulances, and payers, including insurance companies, when it comes to certain emergency medical charges that are “out of network” or in-network non-emergency care from an out-of-network provider. Historically, when providers and payers could not agree on these charges, the patient was stuck with the difference, a practice to which the medical industry gave the Orwellian label “balanced billing.” 

To some extent, the NSA has provided relief for patients. But it has also given insurance companies disproportionate power in the process when it comes to paying—or not paying—those providers, propelled on by flawed implementation rules created by a triumvirate of federal agencies including the departments of Labor, Health and Human Services, and Treasury. Providers, including air ambulance programs, have filed suit, charging that the NSA as currently implemented is little more than a license for these payers to steal by delaying payments, underpaying, or not paying at all. 

The air ambulance industry has held serious misgivings about the NSA from the beginning. One of the nation’s largest air ambulance providers expressed concern over some of the details in 2020. 

"One key concern for Air Methods is the possibility of tying reimbursements to a median in-network rate that uses inaccurate benchmarks and does not adequately compensate emergency air medical companies for their services," the air medical provider said. "It is also important that this legislation does not nullify the great gains we have made in reaching in-network agreements with many payers around the country, which has made a huge impact on taking patients out of the middle of the billing process. We also strongly support policies that promote more robust data collection, which will allow for fair in-network reimbursement rates.”

Interim implementation rules for the NSA issued last year did little to dissuade these concerns. Specifically, AAMS charged that the process established by the act to mediate payment disputes between providers and payers, called independent dispute resolution (IDR), was rigged and maintained that the interim regulations "issued by the Departments of Labor, Treasury, and Health and Human Services ignore Congress’s intent, instead focusing on a single factor—the qualified payment amount (QPA) or the insurer’s median in-network rate for only a subset of their contracts for a given service in each area. The QPA is to be the overriding factor in this [claims] decision-making process. This means that insurers will be able to know exactly how the IDR entities will resolve these disputes, making the IDR and the open negotiation that precedes it a forgone conclusion. Insurers will also leverage that QPA against future payments, lowering all payments, both in-and-out-of-network, over time.” 

Final regulations, issued this past August, did little to dissuade AAMS’s prior misgivings. Eastlee detailed the bureaucratic morass the NSA has created at the recent Air Medical Transport Conference. 

Payment Disputes

While the NSA went into effect on January 1, an online portal designed to field disputes between providers and payers didn’t open until April 15th—and when it did it was overwhelmed, accumulating 46,000 cases that needed to be funneled into the Act’s IDR process—more than twice the number the government anticipated for the entire year. Of that 46,000, Eastlee estimates that 1,200 have been settled; however, very few have been paid. And a fair amount of this inertia can be traced to what Eastlee terms as payer “misbehavior,” or what people outside of Washington call breaking the law.

This falls into several categories: 

QPA—Under the law, payers are supposed to tell providers what the QPA is when an initial payment is made. “We are not seeing that,” Eastlee said. “This significantly impacts your ability to negotiate with payers.” Nor are payers reporting the information used to calculate QPAs as required by law. “When an inappropriately calculated QPA becomes the prevalent data point in the negotiation process, there is very little hope for obtaining payment beyond the QPA,” he said. 

There are also misapplications of the QPA, for example, using different QPAs for the same service on the same day in the same city from the same payer. “It should not happen, it’s against the law,” Eastlee charges. 

Then there is the matter of using the QPA as the prime determinant of the claim amount, which is at variance not only with the law but with the enabling regulations. Other factors must also be considered by the IDR mediator known as the “entity” or “IDRE.” They include: The level of training and quality of outcomes from the provider; the market share held by the provider in the region the service is provided; the needs of the patient and the complexity of the service provided; the provider case mix and scope of services; the good faith efforts by the provider and the payer to enter into in-network agreements and any contracted rates between them over the previous four years. 

In reality, rarely is any of this considered because doing so would require the IDRE to justify any decision that gives weight to these factors in writing and the IDRE case backlog is simply too large. “They are simply overwhelmed,” Eastlee said. 

Indeed, the amount of QPA gymnastics is simply mind-boggling. Two studies looked at QPAs developed specifically for air ambulances by Blue Cross Blue Shield of North Carolina. The in-network rates were for anesthesiologists, nurses, and dentists. “So if you need dental work at altitude in North Carolina there is an in-network rate for that,” Eastlee said. 

The payer deems the air ambulance transport not “medically necessary"—The NSA does not address this scenario and payers still rely on it as a favorite technique for denying claims altogether, leaving the patient potentially on the hook for the full amount. 

The payer simply does not recognize the claim—Under the law, payers have 30 days to make an initial payment and then any disputed remainder gets negotiated by the parties, and failing that is subject to the IDR process. Eastlee explains, “The 30 days in order to make initial payment doesn’t start when you do the transport. It starts when the insurance company recognizes the claim. That is a huge problem because there is nothing in the law that tells insurers how long they can take to recognize the claim. We’ve got lots of claims that have never been recognized.” 

The payer pays the patient directly—This practice is also “against the law,” Eastlee said. 

The payer ignores open IDR requests.

The payer kicks the provider out of the network. 

The payer claims to have been overpaying past claims, cancels existing in-network contracts, and imposes lower rates—“Nothing prevents recoupment and some insurers are lowering the current payment because they claim they have paid too much on a previous payment. So they feel like they are recouping cash through a lower payment on a current or future claim,” Eastlee said.

Some payers feel at liberty to continue this behavior, which “happens all the time,” because the NSA’s enabling regulations provide “virtually no enforcement at all,” Eastlee said. Another problematic aspect is that NSA enforcement responsibility is split between the state and federal governments with the federal responsible for private health plans and states for state-regulated health plans. 

While Eastlee concedes that some providers have had limited success with the IDR process, it is “not a replacement for bad policy.” 

Eastlee thinks the Biden Administration believes the NSA is working well, particularly as a cudgel against continued medical price inflation. He doesn’t think Congress has the appetite to revisit the NSA, and even if it did, the outcome could be worse than the status quo. And the prospects for immediate relief from litigation filed by AAMS and a wide variety of other providers will take time. Meanwhile, providers can continue to file complaints with the Centers for Medicare and Medicaid Services—the HHS agency charged with overseeing the administration of the NSA—on their online portal, but don’t count on a quick response. Eastlee knows of a complaint filed in January that did not even receive a response until July. 

“Can we wait it out? I don’t know if we can,” he said. “Insurers are holding all the cards now. Bankrupting one side or the other is not the solution.”