Federal regulators nix contested language in surprise billing final rule
Federal regulators released a final rule outlining how payers and out-of-network providers will settle payment disputes using arbitration.
The final rule issued Friday is in step with a Texas judge’s February decision that invalidated a narrow part of the first draft of the rule, which instructed arbiters on what they must consider when resolving payment disputes.
The ruling in Texas was seen as a win for providers, who said the proposed rule favored insurers because it instructed arbiters to start with the presumption that the median in-network rate is the appropriate amount to pay out-of-network providers.
In comparison, the final rule released Friday says arbiters must consider the median in-network rate, also known as the qualifying payment amount, in addition to other information submitted by each party.
The final rule removes the earlier requirement that arbiters must first presume that the median in-network rate is the appropriate payment.
Katie Keith, a lawyer and health policy expert at Georgetown University who has followed the issue closely, said the final rule backs away from the earlier rule and is not surprising due to the earlier Texas decision.
A group representing large employers said it was disappointed by the final rule, arguing it “back-tracked” on limiting out-of-network rates.
“Unfortunately, the Final Rule falls short of lowering health care costs for employer plan sponsors, and ultimately patients,” Annette Guarisco Fildes, CEO of the ERISA Industry Committee, an advocacy group for large employers, said in a statement.
The law that bans surprise bills was aimed at removing patients from being stuck in the middle of payment disputes between payers and providers.
Congress banned most surprise bills starting in 2022, providing a solution for patients who receive surprise bills after unexpectedly receiving out-of-network care at an in-network facility.
Payers have argued that some providers purposefully stayed out of insurer networks as a business strategy to receive higher reimbursement, according to a previous report from researchers at Yale. Oftentimes, these providers are doctors providing care in the emergency departments or specialty care like anesthesia.