ACEP Pushes Against Lower OON ER Rates
As most know, in May the American College of Emergency Physicians, (ACEP), filed a lawsuit against the Departments of Health and Human Services, Labor and the Treasury with the objective to overturn the current “greatest of three” rule.
Before patients can be balance billed for out-of-network emergency care, the Affordable Care act requires that insurers make a “reasonable” payment based on some objective standard.
The “reasonable” payment requirement currently requires insurers to reimburse out-of-network emergency services using the the greatest of three approach:
- The Medicare reimbursement rate
- The insurer’s in-network reimbursement rate
- The “usual, customary and reasonable” (UCR) rate
UCR is usually the highest but ACEP, EDPMA and others have been concerned for some time that insurers are manipulating UCR rates to drive down reimbursement.
There is currently no process for ER providers to verify that the UCR payments they receive are correct. ACEP accuses insurers of setting UCR rates as much as 70 percent below what they should be in most markets. Of course, underpayment by insurers means a larger bill for patients, in states where ER physicians can balance bill. But many states do not allow ER balance billing, leaving physicians with no minimum payment protection.
ACEP wants insurers to use a transparent database for UCR determinations that can be verified by state and federal regulators. ACEP and EDPMA point to recent Connecticut legislation as a model: it includes a “minimum benefit standard” (MBS) of 80% of charges “as reported in a benchmarking data base maintained by a nonprofit organization specified by the Insurance Commissioner” (emphasis in the original). ACEP, EDPMA and others believe that an MBS (without debating the exact percentage) and the transparent data base are essential fairness requirements.
Further, the ACEP/EDPMA “Joint Task Force Strategies White Paper” recommends the FAIR Health (FH) charges database as the reference for “usual and customary charges.” According to ACEP, it contains more than 19 billion charges from more 60 contributors, which include health plans, Blue Cross Blue Shield plans, third-party administrators, and self-insured plans.
According to the ACEP press release announcing the law suit, the organization has raised its concerns to the Administration on many occasions. But without satisfactory results.
A schedule is not yet set to hear the ACEP lawsuit in court.
In the meantime, the current vague regulations remain in place, pressuring OON reimbursement on a daily basis.
At the same time, state efforts to limit balance billing continue. In California, Governor Brown just approved legislation that limits OON balance bills for non-emergency services and tightens requirements on health plans to offer adequate provider networks. The bipartisan bill, AB 72 (PDF) says patients who receive care at in-network facilities only have to pay in-network cost sharing. Emergency physicians in California are already restricted from balance billing patients and the California ACEP lobbied vigorously against the legislation, as did the Association of American Physicians and Surgeons. Both groups maintain that the legislation is unconstitutional, in addition to many other concerns.
Like California, a number of other states have enacted or considering similar legislation. Many states limit balance billing in certain circumstances such as when the provider participates in an HMO.
The State Regulatory Insurance Committee (SRIC) has been monitoring balance billing, surprise billing, and Medicaid expansion in all 50 states for a number of years and recently provided a summary.
States that have passed legislation further limiting balance billing:
- New York
States currently in session and considering legislation that would further limit balance billing:
- New Jersey
States in which balance billing legislation has been introduced, but conducting studies to further assess the issue:
- New Hampshire
- Rhode Island
States currently out of session, but likely to consider the issue in 2017:
- New Mexico