A federal judge sided with the Texas Medical Association in a decision regarding the independent dispute resolution process of the No Surprises Act.
Organizations have filed several lawsuits challenging how the Department of Health and Human Services (HHS) created an arbitration process for hospitals, doctors, and insurers to settle disputes over out-of-network medical bills under the No Surprises Act.
Yesterday, a federal court in Texas ruled in favor of one of these organizations: the Texas Medical Association. The court decided that HHS was mistaken in its decision to instruct mediators to give past contracted rates between insurers and providers extra weight compared to other factors during the independent dispute resolution (IDR) process.
"This decision is a major victory for patients and physicians. It is also a reminder that federal agencies must adopt regulations in accordance with the law," Diana Fite, MD, immediate past President of the Texas Medical Association said in a statement.
"This decision is an important step towards restoring the fair and balanced process that Congress enacted to resolve surprise billing disputes between health insurers and physicians," Fite said. "The decision will promote patient access to quality care when they need it most and will guard against health insurer business practices that give patients fewer choices of affordable in-network physicians and threaten the sustainability of physician practices."
The American Medical Association (AMA) also celebrated the ruling as Gerald Harmon, MD, President of the American Medical Association said "The AMA supports the court’s proper reading of the statute and remedy to the rule’s flawed interpretation of the independent dispute resolution process passed by Congress as a confirmation of the goals of the No Surprise Act and the patient protections it contains. The judge’s ruling does not impact the patient protections included in the No Surprises Act, which the AMA supports."
Matt Eyles, President and CEO of AHIP, a national association whose members provide healthcare coverage and services, also weighed in on the ruling.
"It is unconscionable for providers to fight to weaken protections for patients who deserve to be protected from surprise medical bills, and to exploit the arbitration process to pad their bottom lines," Eyles said.
According to AHIP, it will continue to fully support the Biden Administration in its defense of the No Surprises Act and the interim final rule and will continue to support HHS' defense of the rules in other courts.
In addition, Sean Robbins, Executive Vice President of External Affairs for the Blue Cross Blue Shield Association, also issued a statement on the verdict.
“The No Surprises Act protects patients from costly and unanticipated surprise medical bills. This lawsuit could have real implications, and the Texas court’s decision risks the affordability and accessibility of health care for everyone,” Robbins said.
“The American people want affordability in the health care system, and they support Congress’ actions in passing the No Surprises Act. We disagree with this lawsuit and will continue to support the administration’s approach in the interim final rule.”
During the IDR process, an arbiter is directed to consider all information submitted by the physician and insurer, including the median in-network rate, complexity of the case, previously contracted rates, and market power of the physician and insurance company, among other things.
The law states that the qualified payment amount (QPA) could be one of many equally weighted factors considered in payment disputes.
However, until now, the rule made the QPA the primary factor in the IDR process. Organizations have said that since the QPA is "an unverified rate set by insurers," using it to settle disputes "sets an artificially low benchmark payment, for all care—whether in network or not, which may not support wider access to care—particularly in underserved areas."
This lawsuit does not impact No Surprises Act protections to hold patients harmless during insurer-provider out-of-network payment disputes and will not increase patient out-of-pocket costs.
A recent study shows only 14% of hospitals are fully complying with CMS' price transparency rule.
A study published by PatientRightsAdvocate.org shows that most organizations are still not fully complying with the hospital price transparency rule even though we are now in year two of the legal requirement.
The report assessed the compliance with the law by reviewing 1,000 U.S. hospitals out of the over 6,000 accredited hospitals in the country.
Of the 1,000 total hospitals reviewed in the study, only 14.3% were fully complying with the rule. The study also found that only 37.9% of the hospitals posted a sufficient amount of negotiated rates, but over half were not compliant in other criteria of the rule, such as rates by each insurer and named plan.
Some of the largest hospital systems in the country fell short in this study.
"Only 0.5% of hospitals owned by the three largest hospital systems in the country–HCA Healthcare, CommonSpirit Health, and Ascension–were in compliance. Notably, only two of the 361 hospitals owned by these three hospital systems were compliant with the rule," the PatientRightsAdvocate.org study said.
These three large hospital systems had a combined total revenue of almost $120 billion in 2021, according to the study.
Researchers in the 2021 study analyzed two groups of hospitals: A random sample of 100 out of 6,171 hospitals, as well as the 100 hospitals with highest gross revenue in 2017. At the time, the JAMA study found that 83 were noncompliant with at least one major requirement of the rule.
Under the authority of the Affordable Care Act, a federal hospital price transparency rule took effect January 1, 2021, requiring hospitals to post all prices online, and easily accessible without barriers such as having to submit personal identifying information.
The OIG plans to target organizations' revenue cycle in audits of severe malnutrition reporting and billing.
The OIG recently announced it will conduct statewide reviews to determine whether hospitals complied with Medicaid billing requirements when assigning severe malnutrition diagnosis codes to inpatient hospital claims.
This comes on the heels of the OIG's previous, 2020 audit report that determined hospital compliance with Medicare billing requirements when assigning diagnosis codes for severe malnutrition.
During that audit, the OIG found that of the 200 claims reviewed, only 27 were correctly coded. The errors identified in the random sample amounted to $914,128 in overpayments.
To avoid a potential run-in with the OIG on this matter, revenue cycle leaders should work with the directors of their clinical documentation integrity and coding departments to ensure that coding guidelines and clinical criteria are being met by their staff.
Department heads should be aware that actively auditing malnutrition diagnoses codes, tightening up coder education, and reviewing clinical criteria and documentation practices with physicians will help circumvent these compliance issues.
Organizations are allowed to bill for treatment of malnutrition based on the severity of the condition (mild, moderate, or severe) and whether it affects patient care.
According to CMS, severe malnutrition is classified as a major complication or comorbidity (MCC). Adding an MCC to a claim can result in an increased payment by causing the claim to be coded in a higher diagnosis-related group.
The OIG expects to release its audit of Medicaid inpatient hospital claims with severe malnutrition in 2023.
Strategizing across departments will be a crucial step in avoiding these penalties as directors within the middle revenue cycle can take the lead on education.
Under the program, CMS reduces overall Medicare payments for hospitals that rank in the worst-performing quartile of all hospitals on measures of hospital-acquired conditions.
Every year, the facilities in the lowest-performing 25% are penalized by losing 1% of their Medicare payments. This payment adjustment applies to all Medicare discharges for the applicable fiscal program year when CMS pays hospital claims.
For fiscal year 2022, 764 hospitals will have their Medicare payment rates reduced for having high infection rates and other patient complications from mid-2018 to 2019. In response to the 2019 COVID-19 public health emergency, CMS excluded all calendar year 2020 data from this year's hospital-acquired condition program calculations and plans to do so indefinitely.
What can revenue cycle leaders do to avoid these penalties?
Reporting hospital-acquired conditions has been required by CMS since 2007 as legislated by the Deficit Reduction Act of 2005.
Hospital-acquired conditions are reported by HHS to identify high-cost and high-volume cases. These conditions result in the assignment of a case to a Medicare-severity diagnosis-related group that has a higher payment when present as a secondary diagnosis and could reasonably have been prevented through the application of evidence‑based guidelines.
Looping in middle revenue cycle directors, such as a coding director, is a crucial step in avoiding these penalties.
Having staff regularly review the basics of reporting hospital-acquired-conditions, preparing for unanticipated coding situations, and focusing on correctly identifying conditions that are present-on-admission will ensure your organization can submit claims with the utmost accuracy.
When a hospital-acquired condition occurs during a hospital stay, additional reimbursement isn't provided to the hospital for the avoidable condition.
Because of this, when working with your coding, clinical documentation integrity, or other middle revenue cycle directors, it’s also useful to have them pay particular attention to present-on-admission indicator reporting, as these indicators can have a large impact on reimbursement.
Educating middle revenue cycle staff and monitoring their use of present-on-admission indicators is critical for an organization since conditions reported as present-on-admission will not tie your organization to a hospital-acquired condition, thus avoiding the penalty.
Also, leaders could consider auditing present-on-admission indicators. While this isn't a typical coding audit, results would be of large value to the organization in avoiding penalties.
The hospital-acquired condition payment provision only applies to inpatient hospitals. The following list of organizations are exempt from that provision:
Cancer hospitals
Children's inpatient facilities
Critical access hospitals
Inpatient psychiatric hospitals
Inpatient rehabilitation facilities
Long-term care hospitals
Maryland waiver hospitals
Religious non-medical healthcare institutions
Veterans administration/department of defense hospitals
1008.jpg?itok=gVZhq-zP)
