- Two powerful provider groups and a handful of hospitals and physicians are suing HHS over the agency's implementation of legislation that bans surprise bills, which is set to go into effect Jan. 1.
- The American Hospital Association and the American Medical Association have also filed a motion to stay, requesting to halt "specific and limited portions" of the ban on surprise billing.
- The lawsuit alleges HHS' rule is in direct conflict with the law Congress wrote. The suit claims HHS' incorrect interpretation "places a heavy thumb on the scale" of the dispute resolution process that will unfairly benefit insurers.
AHA and AMA said they want to see an end to surprise bills, but the agency's version does not reflect the law that Congress passed last year, leaving providers vulnerable to lower payment arrangements that may ultimately reduce access to care.
The providers' discontent centers around how the two sides can reach an agreement on a payment when a dispute arises from an out-of-network claim.
Congress thought the remedy should be to use an arbitration process, relying on a third party to help settle disagreements between insurers and providers.
Lawmakers saw it as a way to remove patients from being stuck in the middle. Congress opted to remove patients from the process by putting the onus on insurers and providers to settle, with the option to call in an arbiter.
Now, the contention is about what information that third-party arbiter can use to arrive at a payment amount that is owed to the provider.
The lawsuit alleges Congress intended for an arbiter to be able to consider a constellation of factors including the median in-network rate, a provider's training and experience and market share.
"Congress left it to the discretion of the arbitrator — not the Departments — to determine which factors were most important in light of the facts and circumstances of a particular case," the lawsuit alleges.
But the final rule limits what arbiters can consider, narrowing the information pool to one single factor: the qualifying payment amount, the lawsuit argues.
It's unfair to rely on the qualifying payment amount, the lobbies argue, as it "is calculated exclusively by insurers" and "presumptively determines the appropriate payment rate."
The lobbies go as far as to argue that the final rule will harm patients as it will "encourage insurers to narrow the network of providers available to patients and potentially eschew providers with higher costs, including teaching and other hospitals that provide trauma care, burn units, and neonatal intensive care services that are critical for their communities."
It's already happening, AHA and AMA argue, pointing to a letter Blue Cross Blue Shield leaders of North Carolina sent to providers about lowering rates in light of the enactment of the surprise billing ban.
Payers, however, are in favor of the agency's interpretation of law. America's Health Insurance Plans backed the arbitration process rule when it dropped this fall.
"This is the right approach to encourage hospitals, health care providers, and health insurance providers to work together and negotiate in good faith," AHIP said in a statement.
Two separate healthcare systems and two doctors have also joined the suit against HHS, including Nevada-based Renown Health, UMass Memorial Health and North Carolina anesthesiologists Stuart Squires and Victor Kubit.