Federal balance billing law takes surprise turn to favor insurers

Late last year Congress passed the No Surprises Act, which bans balance billing at the federal level effective Jan. 1, 2022. The law applies to emergency care and out-of-network physicians and other practitioners treating patients at in-network facilities, generally prohibiting them from billing patients directly for care provided. Federal agencies have been working on rulemakings to implement the law, which took a turn recently when the latest set of rules dramatically favored insurance carriers, potentially skewing the impact of the law on physicians and shifting even more leverage and profits to insurers.

As passed by Congress, the federal balance billing law largely tracks with Washington state’s Balance Billing Protection Act, which went into effect in 2020. In the event care is delivered by an out-of-network physician (or other practitioner) subject to the law, insurance carriers are directed to pay the physician, which the physician can contest through arbitration if the payment is insufficient. The difference between the two laws is that the federal law defers to carriers to set the initial payment rate based on their internal methodologies, and last week’s rule instructs arbitrators to assume the insurer’s payment is appropriate, stacking the deck against any physician who questions payment through arbitration. The American Medical Association and national physician specialties were quick to criticize the rule, noting in a statement from AMA President Gerald Harmon, MD, that the rule “disregards the insurance industry’s role in creating the problem of surprise billing at the expense of independent physician practices whose ability to negotiate provider network contracts continues to erode.”

The Washington State Office of the Insurance Commissioner has indicated that it will be pursuing legislation in the 2022 session that begins in January to align elements of the state and federal laws, such as the services that are covered under state law and the calculation of patient cost-sharing. The WSMA was one of the principal negotiators of the state balance billing law—which is generally seen as one of the more physician-friendly balance billing laws across states—and will be working to ensure the negative elements of the federal law are not mirrored in state statute.

WSMA Outreach & Advocacy Report