By Joe Paduda
Thursday, July 8, 2021 | 0
President Biden’s Secretary for Health and Human Services announced an important new rule last week that addresses the surprise billing of emergency services outside the network. Although not final, the rule – and subsequent changes – may affect an important area of costs for employee compensation.
Joe Paduda
For the sake of clarity, the current version only applies to “group health insurance funds, group and individual health insurance funds, providers within the framework of the FEHB program for employees”.
The rule came about because providers bankrupt patients by charging ungodly fees for services outside the network, and the payers don’t pay the fees.
Brief highlights of the rule:
- It comes into force on January 1, 2022.
- For health insurances that cover emergency services, the rule requires plans to cover emergency services without prior approval and regardless of whether a provider or facility is on the network.
It applies to:
- Most emergency services.
- Air ambulance services from off-grid providers.
- Non-emergency care from non-network providers at certain facilities on the network, including in-network hospitals and outpatient surgical centers.
I wrote on this topic a few years ago.
While this has made headlines in the private insurance world, it still needs a lot of attention from labor insurers. This may be because, despite claims to the contrary by auditing departments / vendors, the comp payers are quite uneducated about facility billing. (There are laws in Texas that go into a very narrow part of the problem; it will have almost no effect on the problem except for patients being treated in a state medical facility.)
Congress has been talking all year long about “solving” the surprising problem of the medical bill, making as much progress as usual, but none. This is largely because the medical services companies that PE owned are spending tens of millions fighting against laws designed to prevent surprise billing.
What is clear is that the PE companies will win this battle, but they will certainly lose the war. The surprise bill fiasco will bring huge returns in the short term, but will lead to major reforms as voters grow angrier over this legal theft. The PE companies understand this completely. They are fighting to uphold their right to rip off patients for as long as possible and will continue to do so until voters rebel.
This “war” has now intensified on a large scale.
Flat-rate labor allowances can get into the fray by encouraging their state legislators to add lump-sum labor (and car) to the list of payers covered by state billing laws. About 18 states today have extensive surprise billing laws; the laws of many other states cover parts of the problem.
What does that mean for you?
If the flat-rate labor allowance is included in the ban on surprise billing, that is indeed good news.
If not, expect even more charge shifts for work compensated patients.
Joseph Paduda is a co-owner of CompPharma, a consulting firm focused on improving pharmacy employee compensation programs. This column is republished on his Managed Care Matters blog with his permission.
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