Andrew Silverio, Esq.
Apologies for the attention-grabbing headline, but no, as good as that would be for payers, it didn’t. However, Kaiser Health News recently ran a story, which was also picked up by NPR, speculating that this is precisely what had occurred. The article, which ran on April 17, 2020, discussed the terms and conditions placed on providers who receive funds from the Public Health and Social Services Emergency Relief Fund under Public Law 116-136, one of which states that “… for all care for a presumptive or actual case of COVID-19, Recipient certifies that it will not seek to collect from the patient out-of-pocket expenses in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network Recipient.”
For its expansive reading of this seemingly limited prohibition on balance-billing, KHN points to a statement on an explanatory HHS website (the article links to https://www.hhs.gov/provider-relief/index.html) stating that “HHS broadly views every patient as a possible case of COVID-19.” The rationale then, is that if providers can’t balance bill COVID-19 patients, and every patient is a COVID-19 patient, then providers can’t balance bill anyone. However, as noted above, the actual requirement in the provider “Acceptance of Terms and Conditions” (available at https://www.hhs.gov/sites/default/files/relief-fund-payment-terms-and-conditions.pdf) applies to “…all care for a presumptive or actual case of COVID-19.” Even if every patient is a “presumptive” COVID-19 patient, it is simply not the case that all treatment is treatment for a COVID-19 case.
As beneficial as a broader interpretation of this guidance could be for payers, we would not advise payers to rely on it as it is simply not supported by the terms of the provider Terms and Conditions or consistent with the past positions of HHS. First, note that the “every patient” language was found in explanatory public HHS guidance online, not the actual Terms and Conditions. Additionally, as of April 24, 2020, that language appears to have been removed (perhaps due to the potential for misinterpretation, but that is of course speculation). The link cited by the KHN article now redirects to https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/index.html, which as of April 24, 2020 does not contain the “every patient” language and states that its content was last reviewed on April 24, 2020.
As the legal landscape around COVID-19 continues to rapidly develop, as always, don’t hesitate to contact us with any questions.
By: Jon Jablon, Esq.
The CARES Act is brand new, obviously, but its treatment of the relationship between medical providers and health plans is anything but. As with just about all legislation to date on the topic of payor-provider relations, the legislature has not hesitated to essentially give all the power to the providers. The bill includes the following provisions:
SEC. 3202. PRICING OF DIAGNOSTIC TESTING.
(a) Reimbursement Rates.—A group health plan or a health insurance issuer providing coverage of items and services described in section 6001(a) of division F of the Families First Coronavirus Response Act (Public Law 116–127) with respect to an enrollee shall reimburse the provider of the diagnostic testing as follows:
(1) If the health plan or issuer has a negotiated rate with such provider in effect before the public health emergency declared under section 319 of the Public Health Service Act (42 U.S.C. 247d), such negotiated rate shall apply throughout the period of such declaration.
(2) If the health plan or issuer does not have a negotiated rate with such provider, such plan or issuer shall reimburse the provider in an amount that equals the cash price for such service as listed by the provider on a public internet website, or such plan or issuer may negotiate a rate with such provider for less than such cash price.
If there is a negotiated rate between the payor and provider, then the payor must pay that rate. If, however, there is no previously-negotiated rate, then the payor and provider can either elect to negotiate a rate (on a case-by-case basis, or globally – same as any other payment contract), or, if negotiation is not possible or not successful, the plan is required to simply pay the provider whatever price the provider has identified on its website. In other words, the plan must pay a negotiated rate, if there is one, but if not, the plan must pay whatever the provider demands.
Even in this time of near-universal employer financial hardship, the legislature has been very careful to not give a damn about the costs incurred by health plans – including self-funded employer-sponsored plans, many of which are struggling small businesses. It will never cease to amaze me.
Interestingly, the section of the bill immediately following the one quoted above reads:
(b) Requirement To Publicize Cash Price For Diagnostic Testing For COVID–19.—
(1) IN GENERAL.—During the emergency period declared under section 319 of the Public Health Service Act (42 U.S.C. 247d), each provider of a diagnostic test for COVID–19 shall make public the cash price for such test on a public internet website of such provider.
(2) CIVIL MONETARY PENALTIES.—The Secretary of Health and Human Services may impose a civil monetary penalty on any provider of a diagnostic test for COVID–19 that is not in compliance with paragraph (1) and has not completed a corrective action plan to comply with the requirements of such paragraph, in an amount not to exceed $300 per day that the violation is ongoing.
So, the law requires payment of either a negotiated rate or the provider’s published rate – and the same law requires the provider to publish its rate. But what if it doesn’t, or what if the particular provider doesn’t maintain a website at all, as many smaller offices don’t? Health plans should be wary about what happens in the event the provider fails to “make public the cash price for such test on a public internet website.” It’s tempting to take the “you didn’t comply, so if you don’t negotiate a reasonable rate, we’ll report you” approach – but some consider that at least extortion-adjacent. Instead, a good practice may be to simply inform the provider – if it hasn’t posted a price – that there is no option but to negotiate, and make sure you’re armed with reasoning for what you should reasonably be paying.
One thing is clear, though: RBP plans will need to be careful here, since the legislature’s primary aim seems to be that patients do not get balance-billed for COVID-19 testing. The traditional RBP approach, then – where the Plan determines its pricing and then pays its minimum to the provider – is not going to be a viable option under the current state of the CARES Act. If there’s no pre-negotiated rate with the provider, the Plan must pay the provider’s published rate, or negotiate on the spot – but we strongly caution all health plans against creating a situation in which balance-billing is even a possibility.
By: Andrew Silverio, Esq.
Anyone who works in health benefits is familiar with surprise billing – the specific kind of balance billing which occurs when a patient visits an in-network physician or hospital, and receives an unexpected balance bill from an out-of-network provider that they didn’t have an opportunity to select, and in many cases, didn’t even know they had utilized. Common culprits are anesthesiologists, assistant surgeons, and outside lab work.
We often think of this as primarily a problem for emergency claims. This makes a great deal of sense, since when someone presents at an ER or is brought there via ambulance, they likely won’t have an opportunity to ask questions about network participation or request specific providers. However, according to surprising data released in the Journal of the American Medical Association on February 11, 2020 entitled “Out-of-Network Bills for Privately Insured Patients Undergoing Elective Surgery With In-Network Primary Surgeons and Facilities (available at jamanetwork.com/journals/jama/fullarticle/2760735?guestAccessKey=9774a0bf-c1e7-45a4-b2a0-32f41c6fde66&utm_source=For_The_Media&utm_medium=referral&utm_campaign=ftm_links&utm_content=tfl&utm_term=021120), these bills don’t actually seem to be more likely to arise from emergencies or other hospital stays where patients have less of an opportunity to “shop around.”
The study looked at 347,356 patients undergoing elective surgeries, at in-network facilities with in-network surgeons. These are patients who had ample opportunity to select their providers, and indeed did select in-network providers for both the surgeon performing their procedure and the facility in which it would occur. Shockingly, over 20% of these encounters resulted in a surprise out of network bill (“Among 347 356 patients who had undergone elective surgery with in-network primary surgeons at in-network facilities . . . an out-of-network bill was present in 20.5% of episodes...”) The instances that involved surprise bills also corresponded to higher total charges - $48,383.00 in surprise billing situations versus $34,300.00 in non-surprise billing situations.
The most common culprits were surgical assistants, with an average surprise bill of $3,633.00, and anesthesiologists, with an average bill of $1,219.00. In the context of previous research indicating that “20 percent of hospital admissions that originated in the emergency department . . . likely led to a surprise medical bill,” it seems that even when patients are able to do their homework and select in-network facilities and surgeons, they are just as susceptible to surprise billing. (See Garmon C, Chartock B., One In Five Inpatient Emergency Department Cases May Lead To Surprise Bills. Health Affairs, available at healthaffairs.org/doi/10.1377/hlthaff.2016.0970.)
Many states have enacted protections against balance billing and surprise billing, with Washington and Texas both recently enacting comprehensive legislation. However, these state-based laws have limited applicability, and there are to date no meaningful federal protections for patients in these situations. Until such protections are enacted, patients are left vulnerable to sometimes predatory billing practices, and plans are left to choose between absorbing that financial blow or leaving patients out in the cold.
Starting in 2020, Washington’s new law aimed at putting an end to a particular form of balance billing, known as “surprise” billing, will go into effect. This includes situations where a patient has no reasonable opportunity to make an informed choice regarding their utilization of in-network versus out-of-network providers, for example in the case of emergency services or non-emergency surgical or ancillary services which are provided by an out-of-network provider within an in-network facility. In these cases, the patient has no way of choosing what providers to utilize, or may not know (and would have no reason to think to ask) that they could be treated by an out-of-network provider while visiting an in-network hospital.
Washington’s law mirrors the approach we have seen in several other states – it takes the patient out of the equation entirely by prohibiting the provider from pursuing any balances from them, and leaves the provider and payer to sort out the issue of any remaining balances.
In resolving outstanding balances, the provider and payer must come to a “commercially reasonable” amount based on payments for similar services in the same geographic area, and in this regard the state actually provides a data set for the parties to reference. If the parties can’t come to an agreement, either can request arbitration, and the arbitrator will choose one of the parties’ last proposed payment, encouraging the parties to submit reasonable amounts (for fear of having to defer to the other party’s offer).
Importantly, the law does not (and cannot, because of federal preemption) apply to private, self-funded plans which are governed by ERISA. However, such plans can opt-in to the law via annual notification to the state. These plans should not expect to enjoy the benefits of the law’s balance billing prohibitions if they choose not to opt-in, and reference to the state’s claims database, available on the Washington Department of insurance website, should help them in determining whether it makes sense to do so.
The full law can be found at http://lawfilesext.leg.wa.gov/biennium/2019-20/Pdf/Bills/Session%20Laws/House/1065-S2.SL.pdf, and a useful summary is available at https://www.insurance.wa.gov/sites/default/files/documents/summary-of-2019-surprise-billing-law.pdf.