Last week, the U.S. Departments of Health and Human Services, Labor, and Treasury released an interim final rule to implement Part II of the federal surprise billing law, “The No Surprises Act” which takes effect on January 1, 2022. The new rule focuses on the independent dispute resolution process for insurers and physicians to resolve their payment disputes, as well as the provisions relating to good faith estimates for uninsured individuals, and the patient-provider dispute resolution process.

The California Medical Association (CMA), the American Medical Association (AMA), the major impacted specialty societies and the national hospital associations have all expressed serious concern with the new rule. CMA believes the rule is inconsistent with the No Surprises Act statute and Congressional intent to establish a balanced independent dispute resolution process (IDR). Instead, the rule establishes a legal presumption in the IDR process that the median in-network payment rate is the appropriate rate for out-of-network services.

CMA worked closely with Congress for more than two years to craft legislation that protects patients from surprise medical bills while providing an impartial dispute resolution process for insurers and physicians to resolve disputes. However, the Administration’s rule is a complete giveaway to the insurance industry.

“The interim final surprise billing rule issued this week to implement the No Surprises Act is a grave disappointment to California physicians. It will allow the multi-billion insurance industry to continue to reduce their physician networks, hurting patients who need frontline physicians when an emergency strikes. Ironically, these guidelines will ultimately harm patients by further jeopardizing access to care and increasing health care costs through consolidation,” said CMA President Peter N. Bretan, Jr. M.D., in a statement issued on Friday.

AMA also released a statement on the ruling in which they called the ruling, “an undeserved gift to the insurance industry that will reduce health care options for patients.”

“Congress appreciated the negative consequences of national price setting for health care services and spent considerable time and effort developing a robust independent dispute resolution process to maintain market balance and preserve access to care, which the Administration apparently ignored,” said AMA President Gerald A. Harmon, M.D. “It also is apparent that the Administration failed to appreciate the importance of creating an accessible and impartial dispute resolution processes as a backstop against even greater insurer abuses.”

While the rule protects patients from surprise medical bills, CMA believes it will increase health care costs and reduce patient access to specialists when an emergency strikes. This rule will disincentivize plans from contracting with physicians, creating narrow networks and patient access to care problems, and drive physicians to larger systems that will increase health care costs. 

CMA, AMA and others in organized medicine are urging the Biden administration to delay implementation and allow for a full evaluation of policies in the interim final regulation that have negative long-term implications for patients and the health care system.

CMA also asked the Chairman of the powerful House Committee on Ways and Means, with jurisdiction over surprise billing, to urge regulators to bring the regulation in line with the law and Congressional intent. Subsequently, Chairman Richard Neal and Ranking Member Kevin Brady yesterday issued a joint letter urging that regulators revisit the rule and consider adjustments that better align with the law Congress enacted. Their support will be instrumental in medicine’s efforts to reverse the regulation.

CMA is currently reviewing the 500+ page rule and will provide a more detailed summary soon. To learn more about the rule in the meantime, you can read the Centers for Medicare and Medicaid Services fact sheet.