Problematic Implementation of the “No Surprises Act”
Background on the “No Surprises Act”
Enacted in 2020, the “No Surprises Act (NSA)” was meant to protect consumers out-of-pocket liability for surprise medical bills when receiving out-of-network health care. Among other things, the bill established a federal independent dispute resolution process (IDR) to resolve out-of-network payment disputes between providers and insurers.
However, CMS implementation of the law, through a series of interim and final rules, deviated from clear legislative language and disregarded Congressional intent of the IDR process. After the IDR process went into effect in 2022, several lawsuits vacated portions of the CMS rules and the Agency was forced to issue a final rule in August 2022 that modified aspects of the IDR process. While these changes were marginally useful, the IDR process continues to be riddled with issues that favor insurers while providers struggle to stay afloat. Insurers have taken advantage of the new process by paying providers a fraction of their typical reimbursement, delaying payments and putting routine claims into arbitration. This unfair and unwarranted behavior puts patient access to critical emergency care at risk.
Background of Freestanding Emergency Centers (FECs) and Specialty Emergency Hospitals
FECs are emergency departments that are fully staffed 24/7 with emergency-trained ER physicians and nurses and have all the capabilities of a hospital-owned ER, including advanced imaging, lab, and pharmacy. FECs are also fully compliant with EMTALA laws. The only difference between FECs and hospital-owned ERs is ownership, not capability. Similarly, specialty emergency hospitals are small-scale inpatient facilities that provide 24/7 emergency care Both FECs and specialty emergency hospitals are able to treat patients within minutes and quickly stabilize them, avoiding unnecessary and costly long-term inpatient admissions. The No Surprises Act recognized FECs for the first time in the federal statute as emergency departments that are licensed separate and distinct from a hospital by states to provide emergency care.
Issues
NAFEC is deeply concerned that insurance companies are using the enactment of the NSA as a pretext to slash reimbursement to pennies on the dollar, unreasonably delay payments, and flood the independent review process with easily resolved claims. These actions threaten patient access to critical emergency care, causing some facilities to go out of business and putting many more on the brink of economic insolvency. NAFEC has specifically raised issues relating to:
• A lack of federal enforcement of the law and regulations on qualifying payments amounts (QPAs) and the IDR process itself;
• Inconsistency among the rulings by the certified IDR entities (CIDRES), who arbitrate the process, and conflicts of interest between the CIDRES and disputing parties;
• The absence of a standardized way to initiate the 30-day negotiation period with insurers and the lack of confirmation and response from them;
• Tight timelines, particularly for batching and filing claims, that put an unnecessary strain on providers and give advantages to insurers;
• Payers violating patient protection provisions by reprocessing bills to include the IDR reward amounts, thus increasing patient out-of-pocket costs; and
• Exorbitant administrative fees for the IDR process and delays in payment from insurers and IDREs after a case has been awarded to the provider.
NAFEC urges Congress to conduct oversight on implementation of the “No Surprises Act” and ensure that the IDR process is effective and impartial, as was intended by Congress when they passed the law.
Protect Continued Medicare Beneficiary Access to Freestanding Emergency Centers (FECs)
To expand provider capacity to respond to the COVID pandemic, in April 2020, the Centers for Medicare and Medicaid Services (CMS) issued a waiver allowing FECs to enroll as Medicare-certified hospitals and receive Medicare reimbursement for the duration of the COVID-19 public health emergency (PHE). Over 129 FECs, primarily located in Texas, enrolled and provided high-quality emergency services for all kinds of emergency conditions at significant savings to the Medicare program to thousands of Medicare beneficiaries. Now that the PHE has been terminated, Medicare beneficiaries have lost access to these critical health facilities, and Congress must act to restore Medicare recognition to FECs.
Background of Freestanding Emergency Centers
FECs are EMTALA-compliant emergency departments that are fully staffed 24/7 with emergency-trained ER physicians and nurses and have all the capabilities of a hospital-owned ER, including advanced imaging, lab, and pharmacy. FECs can treat patients within minutes and quickly stabilize them, avoiding unnecessary and costly inpatient admissions. The only difference between FECs and hospital-owned ERs is ownership, not capability.
A Potential Solution for Rural Access to Emergency Care
Additionally, as rural hospitals continue to close (148 since 2010, 38 since 2020, and over 15 last year), 60 million Americans in rural areas risk having limited or no real access to emergency services. FECs are a potential solution to this rural access issue, as they are efficient care sites with limited fixed costs compared to hospitals. However, Medicare recognition is imperative for this model of care to be viable in rural areas where they are needed most.
Actuarial Study: Shows that FECs participation in Medicare Saves Money and Does Not Increase Utilization
Dobson DaVanzo & Associates, a highly revered actuarial firm, analyzed Medicare claims data from 2019 to 2022 to assess the impact of the Medicare waiver for FECs in Texas on the utilization of emergency care and Medicare payments. Key takeaways from the study included:
• Medicare saved 21.2% for emergency care provided in FECs during the PHE, as they utilized fewer services on a risk-adjusted basis than hospitals.
• There was no overall increase in ER services in Texas compared to the US After Medicare FEC recognition. Texas ER utilization was consistent with that across the US.
• 129 FECs in Texas comprise about 4.1% of ER utilization in the state.
The Emergency Care Improvement Act
Reps. Jodey Arrington (R-TX) and Vicente Gonzalez (D-TX) introduced the Emergency Care Improvement Act (HR 1694), which would improve Medicare beneficiary access to emergency care in rural areas and improve access and competition in urban areas by providing permanent Medicare and Medicaid recognition of FECs. The bill provides Medicare payments for qualifying FECs at the hospital rate for emergency services for only moderate and high acuity ER codes. It ensures FEC recognition will not put rural hospitals at risk by only allowing new Medicare-recognized FECs in rural counties with no current hospital. The American College of Emergency Physicians endorsed the bill. Rep. Raul Ruiz (D-CA), an important voice on the Energy & Commerce Committee and a former ER physician, signed on to support the bill. He recognizes the important role Medicare reimbursement for FECs can play in increasing access to emergency care, especially for rural areas.
NAFEC urges Members of Congress to sign on to co-sponsor the Emergency Care Improvement Act to improve both access and competition for rural and urban patients, where appropriate.