Bill Klaproth (Host): This is an AAOMS On the Go podcast. I'm Bill Klaproth. Joining us today is Rob Neuner, general counsel of the Patriot Group. Rob is here to discuss Insurance Considerations for the OMS: Understanding the No Surprises Act. Rob, how are you? Welcome.

Rob Neuner: Bill, it's a pleasure to be here and thank you for the opportunity.

Host: Yeah, absolutely. So, first off, this might be a good idea, Rob. Could you just give us a brief overview of the No Surprises Act?

Rob Neuner: Sure. The No Surprises Act was a federal law that became effective on January 1st of 2022, idea being to effectively protect patients from receiving what they consider surprise bills, which arise in two situations. One of those situations being when they require emergency services, meaning that they didn't have a chance to choose an in-network provider based on the exigent circumstances. And the other situation being where the patient goes to an in-network facility for a scheduled or non-emergency treatment and they're provided services by an out-of-network provider. The idea there being that the patients are generally unfamiliar with the breakdown between facility billing and provider billing and their respective network statuses. So, the idea is that patients would generally be confused thinking that any physician or provider rendering services at an in-network facility would likewise be in-network. And then, they're "surprised" when they receive an out-of-network bill from a provider that performs services at said facility.

Host: So, if you have someone that is out-of-network, does an OMS have to accept an insurance company's rate for elective surgeries, even if it's pre-planned?

Rob Neuner: The answer to that, for the most part, is no. There's two avenues that could essentially be traveled by the provider that's seeking additional reimbursement. The first is through what's called the notice and consent process. And basically, at that point, what's happening is, prior to the services being rendered, and I think later on this podcast we'll probably talk through that a little bit more about that process, but the patient is being sufficiently notified of what their potential out-of-pocket costs could be up to the full extent of the billed charges, and they're consenting to pay it. So, at that point, they're outside of the purview effectively of the No Surprises Act, which was to hold them only to their in-network cost share outside of those circumstances where they signed off on a notice and consent.

So, under that situation, basically, the carrier would pay its standard out-of-network rate. And then, the patient would then be responsible for its out-of-network cost share plus to the extent that the practice or provider bills the patient for the remaining balance and there's no financial hardship or other sufficient justification for not billing the patient or the patient not being able to pay that amount. They'd be reimbursed up to the full extent of the bill charges.

And then, the second avenue that's readily available, and this is available only when the patient hasn't consented to being responsible for the full extent of the bill of charges that we just discussed, you can go through an arbitration process called the IDR or independent dispute resolution process. So, that process effectively gives the provider and the insurance company or the carrier the opportunity. It's not really an opportunity as much as it's mandated. They're supposed to negotiate in good faith for a period of 30 business days. And if they're not able to come to terms as to what is agreeable reimbursement for services that were rendered, then the matter can be turned over to a third-party mediator or arbitrator. And that arbitrator would then select one of the amounts that's part of the final proposal from each party. So, there's no splitting the baby. The arbitrator can't just pick some neutral or middle ground number. He either has to pick the amount that the provider is seeking or the amount that the insurance company is effectively offering.

Host: When it comes to the No Surprises Act, is this something good for the OMS or something that's not good for the OMS? That might be a basic question, but I just want to hear your answer on that.

Rob Neuner: No. So, it's interesting. It's actually really, really complicated. And it's complicated in terms of what you can probably expect is both sides to this equation, that being the provider and the insurance carriers are arguing with each other that the law favors one party over the other. And you heard a lot of this. There was recently a House Ways and Means Committee hearing back in September, where representatives effectively representing all sides to this matter were in attendance and answering questions of various congressmen, and they would paint it in one form or another how the law is actually working out.

Now, with that said in my opinion, based on the actual language of the Act itself, not the underlying regulations, I think it's pretty reasonable if it was to work out as it's intended. So what I mean by that is, outside of the notice and consent mechanism that's potentially available, that obviously, if you can get your patient to consent to the full extent of the billed charges and they plan to pay it and they do pay it, fantastic. The providers are obviously going to be thrilled about that. Now, if they don't, in the way that I read the law as well as the thousands of pages of underlying regulations that I've read far too many times, the idea here is not to punish the providers, right? So, if the patient's getting held to their in-network cost share, the plan is still or the carrier is still supposed to pay the out-of-network amount as an initial payment pursuant to the terms of the plan. But then, there's that additional opportunity to go through that arbitration process. And I view the arbitration process' purpose as being to effectively at least make up some of the ground that's lost with the patient only being held to their in-network cost share, which is usually less, obviously, than their out-of-network. So, in theory, it should work well.

Now, with that said, in some ways, it has according to recent data between April 2022 and March 2023. Seven out of 10 of the IDR cases or the arbitration cases that were filed and actually formally resolved favored the provider. So, the provider amount was selected. So, in that sense, it's a good thing. At the same time, the ruling going in favor of the provider doesn't always equate to that money actually coming in. So, one of the things that was recently discussed at the September House Ways and Means Committee hearing was that the carriers still just aren't paying even when they're obligated to based on the arbitrator's decision.

And one of the points that was brought up by a few of the congressmen was effectively there's an issue there in terms of the rulemaking that was done by the Departments of the Treasury, Department of Labor, and Department of Health and Human Services collectively, where there's really no enforcement mechanism to make them pay. So as it stands now, you know, it's a little bit problematic. And to be honest, I could talk about this topic for an extensive period of time, but there has been numerous legal cases that were brought. I think one medical association in particular brought four separate cases based on how rules were being prepared by the various departments and having a lot of success. And their biggest success related to the IDR process, whereby one of the factors that's supposed to be considered with the same weight as any of the other permissible factors was what's called the qualifying payment amount or the QPA. And that rate or that amount is supposed to equal the median in-network rate for a particular service that a carrier pays.

The problem was that the departments, when they made their rules, made the QPA a rebuttably presumptive fair market value rate, which is preposterous. Because the idea really is when you agree to in-network rates and typically they're less extent than what out-of-network providers are going to be paid, you're doing that in exchange for something of value, whether it's more volume, more permissible referrals possibly coming your way and what have you, but out-of-network providers don't get that same benefit. So using that as a rebuttable, presumptive fair market value amount is, in my opinion, and as well as Congress's opinion, who wrote letters, a joint letter, bipartisan with all parties involved from Congress to those department heads explaining how this is not what the intent of the act was and that all factors are supposed to be considered equally. So luckily, that medical association had success in that case and that rebuttable presumption was struck down by a federal court.

Host: Right. Kind of the law of unintended consequences, sort of.

Rob Neuner: Yes, you could call it that or you can call it the federal government's inefficiency in getting involved in areas they don't understand. And actually, it's funny, because listening to the September House Ways and Means Committee hearing, you know, there was one congressman that literally thanked all the five parties that were there, you know, doctors and insurance company representatives and what have you, and said, "Thank you for being here to help us understand what we don't understand." So, I think that really kind of sums it up.

Host: Yeah. So, part of the No Surprises Act are good faith estimates. What are those? What are the requirements of a good faith estimate?

Rob Neuner: So, there's two different ways that the good faith estimate comes up. One is related to that notice and consent process that we discussed. So, essentially, in a good faith estimate, you're going line item by line item, and detailing by code that you would normally bill a procedure code, what the potential financial liability would be to the patient. And the idea being that with this good faith estimate being provided, the patient then can actually give informed consent that they're agreeing. They're not blindly agreeing to just be responsible for some unknown cost. They're actually given a pretty clear idea of what that would be. So, that's actually a requirement of that notice and consent process, and it's part of the model form that the Centers for Medicare and Medicaid Services put out, just so that it's clear to the patient what they're going to be responsible for.

The other situation that in which it arises relates to what they call uninsured or self-pay patients. And there's an important distinction there that a lot of providers, I think, miss in my experience. Uninsured is pretty straightforward. The patient doesn't have coverage. That's pretty clear on its face. But the self-pay aspect, I don't think a lot of practices and providers take that part into account and what that means logistically for how their practices should operate. So, what I mean by that is, typically, you know, in a healthcare setting, front desk staff or their reception staff will confirm, get a copy of the patient's insurance ID card and ensure that they have benefits from a general perspective or that coverage is active.

But with a self-pay patient, they can have coverage and just say, "Well, I'm not planning on submitting a bill through my coverage. I have no intention of doing that. I don't want you to do that for me. I want to just pay this out-of-pocket for one reason or another." So in theory, and although this may be in rare cases that that occurs, depending on the services being rendered, the front desk staff really shouldn't just be getting the insurance card and confirming that the coverage is still active, but they should be asking the patient, "Hey, do you want to put a claim through your insurance or do you intend to?" Because if the patient says no, effectively, for the No Surprises Act purposes, they're uninsured patients. And when they're uninsured patients, they have the right entitlement to a good faith estimate. So, the good faith estimate, the idea being similar to informed consent on the notice and consent side for covered patients. The idea is that patients should know in advance what they're going to be responsible for, or at least, pretty accurately. This way when they're ultimately billed, it effectively aligns and it's meeting their expectations.

Host: So then, how and when does an OMS have to comply with the good faith estimates requirement under the No Surprises Act when treating uninsured or self-pay patients?

Rob Neuner: That's a good question. That's important to take into account. One thing I just wanted to point out, before I kind of jump into that, and this will tie into the timing of it. The law effectively allows patients to cost shop, if you will. So, patients can request a good faith estimate claiming to be a self-pay patient. And the practice, even if a date of service hasn't been scheduled to provide the service in question, is still technically obligated to provide that estimate.

Now, there's a few other hiccups to this as well. But just to answer your question in terms of timing, if generally the good faith estimate needs to be provided at least three business days before the date of service, and not later than one business day after the date of scheduling, or if it's scheduled a little more in advance, at least ten business days in advance of the date of service, then it needs to be provided three business days after the service is scheduled. But there's an important caveat to that. So, one of the requirements on paper of the No Surprises Act relates to combining one uniform or consolidated estimate for all parties involved. So, the way that it's theoretically supposed to work is that whoever the party is that's been asked for the estimate, or through whom the services are being scheduled, is considered what's called the "convening provider." And the convening provider then has one business day from a request for a good faith estimate to reach out to all "co-parties", that being, for example, the facility, the anesthesiologist, any co-surgeons or assistant surgeons, anyone else that's involved in the care for that date of service or that overarching procedure. And those co-parties need to provide their estimates back to the convening provider within one business day so that the convening provider can then lump all those together in one uniform estimate and provide that to the patient.

And I think there's good reason for that because, patients, if they're getting a series of just miscellaneous estimates from all different parties that are potentially involved, there's a higher risk of confusion on their end. And then, from confusions arises disputes and complaints and the like. So if there's one overarching estimate, that's going to be helpful. Now, importantly, that requirement has been tolled or delayed through the end of this year and simply because this rollout of this law has been very sloppy and they don't have the infrastructure in place to facilitate the communications that are necessary and what have you. It's unclear if it's going to continue to be extended through 2024. We haven't heard yet, at least as far as I've reviewed from Health and Human Services as to whether that's going to happen. My suspicion is that it will, just based on the ongoing disputes that are arising, hearings that are taking place, and just the overall unhappiness with how this law has been implemented.

Host: Do OMSs need to provide good faith estimates when treating an insured patient that opts to go out-of-network?

Rob Neuner: Well, it depends when you say opting to go out-of-network. If the suggestion is that they're going out-of-network in terms of the notice and consent process that allows you to balance bill them the full extent, even though they want you to submit a claim to their insurance, you're not required to. Because as I mentioned, there's two potential avenues. You can either go through that notice and consent process, or you can go through the dispute resolution or the arbitration process. So, you have two potential avenues. You can't go down both. It's one or the other. So, it's really up to the practice to make that determination and maybe they'll take into account, "Well, my belief is this patient, you know, is a little more financially stable than some other patients. So, it might make sense to try to see if they'll agree to consent to paying the cost because it maybe won't scare them away as much as it would, someone that isn't as financially secure." But they're not required to. Because worst case scenario, the dispute resolution process is available. The patient would still be obligated to pay their in-network cost share. The plan would still be obligated to at least pay the plan allowance at less the in-network cost share per the plan's terms and conditions. And then if they're looking to get more, they can go through the dispute resolution process.

Now, if you're speaking to the uninsured and self-pay, as we discussed, that actually is a requirement when service is scheduled or it's requested by an uninsured or self-pay patient.

Host: Okay. So then, what can an OMS do if they are not satisfied with the payment they receive from the insurance carrier? What then?

Rob Neuner: This is a good point to bring up an area of confusion that I've seen in my experience with a lot of providers. The dispute resolution process works on a claim line specific basis. So let's say as a surgeon, you have a claim that you're submitting with five separate procedure codes, they're all part of the overarching procedure. And let's say three of those claim lines are paid, but you weren't really satisfied with it, and two were just outright denied for lack of medical necessity or because those procedures were considered incidental or inclusive of another procedure, there's different avenues that you would go down.

So if you're talking about they're not satisfied with the payment for the overarching claim as a whole, all five of those claim lines, you have to look at it from a claim line specific standpoint. For the claim lines that were outright denied, there was zero payment, you would just go through the standard or the formerly more utilized internal appeal process with the carrier. And that's typically the first step. You don't get to go through the IDR process for that. Because it's not a question of a low payment, it's just an outright denied claim. The other three claim lines that were believed to be underpaid, you would then go through the IDR process, assuming that you haven't gotten notice and consent signed off by the patient.

Now, one caveat to that as well is that if you did get the notice and consent signed off, but you're still unhappy with the allowed amount, then you should also still be able to go through the internal appeals process. Because the idea being it's not eligible for IDR, so that's not an avenue that's readily available because the patient's consented. So now, you're effectively appealing both on behalf of the practice itself as well as to some extent the patient, because if the patient in theory is supposed to be billed, the full extent of the billed charges, the less that the carrier pays, the more patient responsibility there is.

Host: Well, as we mentioned before, there is a lot here. So, how is the No Surprises Act expected to progress in the future? Where does it go from here?

Rob Neuner: Yeah. It's a loaded question, I'll tell you that. As you said, there's a lot to digest here, and that's based on thousands of pages of regulations that underlie this law. And then on top of that, you add in these disputes. So, with the implementation being a mess and all the fighting that's going on with how this law has been effectuated, it is difficult to say to some extent where it's going to go. But just based on especially the House Ways and Means Committee hearing from this past September, I think there's a few things that we're likely to see happen to some extent.

So, one thing that came out of that, and that there's been proposed rulemaking on related to the dispute resolution process, there's administrative fees and IDR fees, paying that arbitrator that exists. Now, one of these legal cases related to the departments were looking to increase that fee from $50 to $350, which why that's important is because when that fee has to get paid for filing for IDR, before anything has happened and without any certainty that you're going to win that arbitration, it made it so that those costs outweigh the potential benefit, and it wouldn't be effective, or it would be a false avenue that could be traveled by certain out-of-network providers depending on their bill charges. Now, for surgeons, that probably wouldn't have been the end of the world, but the court did strike down that that extent of the increase in the latest proposed rulemaking had the maximum amount going up to $150. So, it's a little bit less of a hit, but it is three times the current rate.

Other aspects relate to increased enforcement against the carriers. As I mentioned before, there were a number of congressmen that raised that issue in part because of the data and the testimony that speaks to the carriers just not paying when they're supposed to be based on the arbitrator or IDRE's decision. The hope is that that's going to increase, but the concern then becomes, and as anyone listening to this podcast will tell you, carriers are always going to act under board if it financially serves them. So until those penalties exceed the financial benefit, they're going to continue to do what they do and that's try to avoid paying at all costs and underpaying at all costs.

And a perfect example is if a fine equates to 20% of the estimated savings that they get from acting improperly, they're going to continue to act improperly because it's just such a big savings for them. That's just their business model though. I mean, the doctors, for example, they provide a clear service. You needed a procedure done, I performed the procedure. And now, you hopefully feel better as a patient. Insurance companies, the reality is people pay premiums and they just promise you to do something later on. And then whether or not they keep that promise, that's a whole 'nother issue entirely.

But some other ways that I see this potentially improving or maybe that I would like to see improvement come about is greater transparency particularly in terms of how the carriers calculate the allowed amount for out-of-network services. Because one of the big issues that the carriers always try to raise is, "Well, the extent of the charges billed by the providers is exorbitant." But providers do that based on their lack of knowledge, because it's not always publicly available, how the carriers are going to allow or calculate the allowed amount for out-of-network services. So, sometimes those allowed amount calculation methodologies include a percent of bill charges. But if they have a series of options, they always say, in particular in the plan documents, "We're going to pay the lesser of these four, five, six options." So, you're always going to be better served billing on a higher side to protect against otherwise being subject to a lower calculation methodology, if that makes sense.

So, my hope is that they'll ultimately put something forward, that's some form of transparency or readily available access to that information. Right now, the biggest focus on transparency is just listing who's out-of-network versus in-network, but the reality is it doesn't really address what the primary issue is here in terms of just kind of cleaning up the relationships between the provider, the insurance company, and the patient.

Host: So with all of this ground to cover with the No Surprises Act, it sounds like it would make sense to work with an expert to help somebody through all of this. Is that right?

Rob Neuner: Yeah. I think that always makes sense. And I think it makes sense to view all matters on a case-by-case basis. And the reality is not all situations are going to be the same. And also, just on a couple of points related to that, in terms of if a provider chooses to go down the arbitration road, my recommendation to any providers that I speak with is always to be very careful in terms of how you're determining what you want to make your final offer, and especially early on in this process, because I think it will have more value to rack up a number of wins for a few reasons. One, it'll tell the carrier, maybe we should start paying a higher initial payment amount. Otherwise, we have to continue to go through this process and expend resources to defend against it. On top of that, under the No Surprises Act, the losing party in an arbitration has to pay the arbitrator's fees outside of a separate settlement agreement between the two parties.

So, if you can keep racking up wins and increasing the cost to the insurance company for acting improperly or underpaying claims, my hope at least and common sense would kind of dictate to some extent that they would then maybe rethink how they're approaching their initial payments and maybe that'll reduce the extent of the IDRs actually being undergone or underwent.

Host: Well, this has been fascinating, Rob. Thank you so much for your time. There is a lot to discuss with this topic. As we wrap up talking about insurance considerations for the OMS and understanding the No Surprises Act, any final thoughts you want to add?

Rob Neuner: It's not a perfect system right now for sure, and I think there's a lot still up in the air, a lot of murky area. And just so everyone's aware, as I mentioned, even though there's a good chance, at least based on historical data from the last year or so, that you'll win on a dispute resolution, that doesn't necessarily mean that you'll be paid. That doesn't necessarily mean that you'll be paid in a timely fashion according to the rules. Because, as noted in the Ways and Means Committee meeting that I've referenced throughout this podcast, there were 14 times more disputes or IDRs that took place than what CMS initially estimated.

So, they're understaffed. There's only about 13 IDR entities. And again, just to put that in perspective, one of the attendees of that meeting was the CFO from Georgia's not-for-profit hospital system called Wellstar who suggested that, you know, based on his organization's reports, only 7% of their 8,000 IDR cases that they filed were actually resolved. So, it's a pretty bleak outlook there, but I do think that Congress is trying to put some pressure on all parties involved to kind of straighten this matter out.

Host: Absolutely. Well, Rob, thank you so much for your time today. We really appreciate it.

Rob Neuner: Yeah, I thank you. I really appreciate the opportunity to join in. And I can always be contacted by anyone interested if they have any further questions.

Host: That sounds great. And once again, that is Rob Neuner.

The AAOMS website offers practice resources to help its members navigate coding and reimbursement issues. Just visit aaoms.org/practice-resources for more information. And if you enjoyed this podcast, please share it on your social media and make sure you subscribe so you don't miss an episode. Thanks for listening.