Surprise billing protection is here! The promise (and a few limitations) of the No Surprises Act

The No Surprises Act -- federal legislation protecting most enrollees in most health plans from most surprise billing -- went into effect on January 1. Good news!

To review briefly, enrollees in employer-sponsored plans -- including self-funded plans -- and ACA-compliant individual market plans (as well as grandfathered pre-ACA plans)  cannot be billed more than their in-network share of costs for:

• Emergency care, including post-emergency stabilization care, at out-of-network facilities or from out-of-network providers at in-network facilities.
  
• Non-emergency care provided by out-of-network providers at in-network facilities or in support of an in-network lead provider. For example, anesthesiologists, radiologists, assistance surgeons etc. cannot balance-bill for their services provided by an in-network surgeon.
• Air ambulances -- among the most notorious balance-billers for tens of thousands of dollars. Ground ambulance charges are not protected.

The U.S. being the U.S., there are some definite and potential holes in the new protections (ground ambulance charges being the most obvious and salient). Enforcement falls to a tangle of federal and state agencies, depending in part on whether the health plan is self-funded and whether the state in which a violation occurs proves to "substantially enforce" the law (if not, HHS is a fallback). The Kaiser Family Foundation maps out that potential maze. On the plus side, CMS has stood up an online consumer complaint form on its info page about the new protections.

Balance billing arbitration tilts toward providers in New Jersey -- less so in new federal law

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 A study published in Health Affairs by Benjamin Chartock, Loren Adler et al. finds that the arbitration of out-of-network bills established by New Jersey's balance billing protection law has yielded extraordinarily high payments to providers:

Arbitration awards were considerably higher than typical in-network payment amounts  Compared with the HCCI data, we found that the mean and median arbitration awards were 9.0 and 5.7 times higher, respectively, than the median in-network price for the same set of services, with 31 percent of cases decided for amounts more than ten times the median in network price (exhibit 1). Because commercial insurers tend to pay more than Medicare, the contrast is even starker with Medicare rates. The mean and median arbitration awards were 12.8 and 8.5 times Medicare prices, respectively, with 45 percent of cases awarded at amounts more than 10 times what Medicare would have paid (exhibit 2). In both comparisons, the large divergence between the relative mean and median awards primarily stemmed from the skewness of arbitrated payment amounts  

The New Jersey law mandates "baseball" arbitration, in which arbitrators must rule in favor of one of the two competing bids, rather than than splitting the difference. The study authors note that arbitration awards in New Jersey track pretty closely with the 80th percentile of billed charges -- which are many times higher than in-network rates:

New Jersey's new balance billing protection law: How complete is the protection?

New Jersey's new law limiting balance billing*, which goes into effect this week, provides patients in fully funded insurance plans -- and in some self-funded plans -- with important protections. The law

• effectively bans balance billing of  insured patients who get emergency hospital care, regardless of whether those who treat them (or even the facility) are out of network.  
• Protects patients who arrange for scheduled procedures from in-network providers at in-network facilities from balance billing by undisclosed out-of-network providers (more on that below).  
• Establishes a "baseball arbitration" dispute resolution system for insurers billed by out-of-network providers. That is, the arbitrator rules in favor of one of the two parties' position rather than splitting the difference. That should put downward pressure on providers' OON billing rates, and so on premiums.
• Includes -- uniquely among state balance billing laws -- an opt-in for self-funded employer plans, which are governed by ERISA, not by state law. The majority of people who are insured through their employer are in self-funded plans.
• Enables balance-billed patients insured via a self-funded plan that does not opt in to initiate arbitration with a balance billing OON provider. 

That's a pretty strong set of protections, with creative workarounds the gigantic impediment to state protection on this front: the fact that self-funded plans are not subject to state insurance regulation wth regard to balance billing (and many other things).  The bill was fruit of a ten-year struggle, and I'm grateful (e.g. to its primary and co-sponsors, including Sen. Joseph Vitale) for its passage.

I'm somewhat troubled, however, by its mechanism for preventing balancing billing by out-of-network providers -- e..g, anesthesiologists, radiologists, pathologists, and assistant surgeons-- participating in a scheduled procedure at an in-network facility when the primary physician is also in network. The onus appears to be on the patient to do a lot of checking. Or maybe not. The text seems to be ambiguous on this front.

Medicaid envy in the rust belt

Yesterday, Drew Altman, president of the Kaiser Family Foundation, published an op-ed in the New York Times in which he reported results of focus groups that KFF conducted with Trump voters in rust belt states who are enrolled in Medicaid and ACA marketplace plans.  One set of complaints from marketplace enrollees is worth pondering:

They spoke anxiously about rising premiums, deductibles, copays and drug costs. They were especially upset by surprise bills for services they believed were covered. They said their coverage was hopelessly complex. Those with marketplace insurance — for which they were eligible for subsidies — saw Medicaid as a much better deal than their insurance and were resentful that people with incomes lower than theirs could get it.

While Medicaid enrollees may have difficulty finding an in-network provider for a given need, they generally not only pay little-to-nothing in premiums and out-of-pocket costs, but also are shielded from balance billing to greater or lesser extent by state law*, Medicaid beneficiaries generally rate their coverage higher than marketplace enrollees -- although, as Altman points out, large majorities of marketplace enrollees also generally rate their coverage at least satisfactory (Trump voters are likely less satisfied than the average). While no one likes a narrow network, it may be the case that what people dislike most is not a narrow choice of providers, but the risk that an out-of-network provider will inflict himself on you, or more exactly, on your checkbook.