Provider groups and members of Congress say the rules favor payers, federal judge agrees, but path forward in how providers bill patients remains unclear
Groups representing healthcare providers—including pathologists—are challenging the Biden administration’s implementation of the No Surprises Act, a bill passed in 2020 that aims to protect patients from surprise medical bills.
This will be of particular interest to pathologists who—as a study from the Health Care Cost Institute (HCCI) found—were second only to emergency room physicians among providers with the highest percentage of out-of-network billing.
The College of American Pathologists (CAP) and American Society for Clinical Pathology (ASCP), both of which supported the No Surprises Act, are now among numerous provider groups claiming that the bill’s rules for resolving payment disputes unfairly favor payers.
These groups have bipartisan support in Congress, Bloomberg Law reported, noting that some legislators are urging Health and Human Services (HHS) Secretary Xavier Becerra to change the rules. The lawmakers may seek to amend the law or turn to the courts if Becerra does not follow through on their requests.
“Either we legislate, we go to court, whatever it takes,” Rep. Brad Wenstrup (R-Ohio) told Bloomberg. Meanwhile, a federal district court judge has sided with the Texas Medical Association (TMA) in two lawsuits over the rules, Healthcare Dive reported.
“We need to make sure that the administration is implementing what we passed consistent with the legislative intent,” Sen. Michael Bennet (D-Colorado) told Bloomberg Law regarding the No Surprises Act. “We had a very complicated coalition of people to come together to support this legislation.” (Photo copyright: Senate.gov.)
Details of No Surprises Act
The No Surprises Act aims to protect patients from “balance billing,” in which they receive surprise bills for out-of-network medical services even when they use in-network providers. The bill was signed into law in December 2020, with most provisions taking effect on Jan. 1, 2022.
As Dark Daily reported in “ASCP and CAP Support New Legislation That Bars Surprise Medical Billing,” following passage of the bill, patients who unknowingly receive services from out-of-network providers are liable only for costs they would have incurred for in-network care. Providers and payers then have 30 days to negotiate a payment. If they can’t agree, an arbiter determines the payment as part of a federal independent dispute resolution (IDR) process.
Passage of the bill required the federal Department of Health and Human Services (HHS), Department of Treasury, and Department of Labor to craft regulations and guidance to implement the law—including the IDR process—according to the American Hospital Association (AHA).
Legal Pushback to Arbitration Rule
One contention was an interim rule that instructed arbiters to use the “qualifying payment amount” (QPA) as the primary basis for ruling in favor of either insurers or providers in payment disputes.
Writing in MedPage Today, pediatric radiologist Richard Heller, MD, National Subspecialty Lead for Pediatric Radiology at Radiology Partners in Chicago, and Radiological Society of North America (RSNA) Board Liaison for Public Information and Corporate Relations, described the QPA as “the insurer’s median in-network rate.”
Heller wrote that “the calculation methodology does not result in real world, market-based rates. Further, insurers calculate their own QPA, and may do so in a non-transparent fashion, raising questions about QPA integrity.”
He added, “The departments have repeatedly tried to establish the QPA as the primary factor arbiters should use in their decision making. These attempts have twice been rejected by a federal court. Recent guidance issued by the administration as a result of the second Texas Medical Association lawsuit more closely reflects the balance that Congress intended.”
In its first lawsuit, the TMA characterized the QPA as “an opaque and flawed insurer-calculated amount” that would result in reduced payments to providers. The lawsuit claimed that Congress, instead, intended for the dispute resolution process to look at “a range of factors.”
Federal Judge Jeremy Kernodle ruled in the TMA’s favor and ordered HHS to change the rule. He also sided with the TMA in another lawsuit, which alleged that a final rule issued in August 2022, while “formally abandoning the QPA rebuttable presumption,” unduly restricted use of non-QPA factors, according to a litigation update for certified IDR entities from Sidley Austin LLP.
The final rule “nevertheless continues to place a thumb on the scale for the QPA by requiring arbitrators to begin with the QPA and then imposing restrictions on the non-QPA factors that appear nowhere in the statute,” the judge stated in his ruling, the American Medical Association (AMA) reported.
In its latest lawsuit, the TMA is challenging a big hike in administrative fees for dispute resolution, which went from $50 initially to $350 beginning last January.
Another issue with the law has been the sheer volume of arbitration cases. The administration originally estimated that payers and providers would submit about 17,000 claims per year, but between April 15 and Sept. 30, 2022, about 90,000 disputes were initiated, according to a government report cited by RevCycleIntelligence.
The No Surprises Act reflected lawmaker compromises about arbitration, Sen. Michael Bennet (D-Colorado) told Bloomberg Law. Bennet indicated to the news outlet that he is not happy with the current arbitration process.
Pathology Groups Weigh In
The CAP and ASCP joined other physician organizations in raising early objections to the Biden Administration’s plans to implement the independent dispute process.
“The skewed IDR process outlined within the IFC [Interim Final Rule with Comment Period] will remove a critical incentive for insurers to negotiate reasonable contracts with physicians by establishing the QPA as a reasonable out-of-network payment,” the ASCP stated in a Dec. 6, 2021, letter to administration officials.
On Dec. 23, 2021, the CAP filed an amicus brief in a lawsuit brought by the AMA and AHA challenging an interim rule issued that September. The regulations “must support an equitable and balanced system for resolving out-of-network payment disputes,” said CAP President Emily Volk, MD, FCAP in a statement accompanying the filing. “As of today, the rules heavily favor the insurers when their power is already too great.”
The AMA and AHA later withdrew the lawsuit after the Biden administration revised the rule, Healthcare Finance News reported. However, the groups still contend that the rule favors payers.
High Stakes for Pathologists
When the law passed Congress, it appeared likely it would have a disproportionate impact on medical laboratories and pathology groups. The HCCI report ranked pathology number two among six specialties responsible for the highest percentage of out-of-network bills. And when the interim final rule was published in the Federal Register, the HCCI data was cited in an accompanying commentary.
However, the CAP told The Dark Report that the statistics about pathologists, though accurate, were “presented in a somewhat misleading manner.”
The No Surprises Act does permit balance billing when patients have given prior consent, but pathologists were among a group of specialties barred entirely from the practice, Dark Daily previously reported.
The speakers also noted that labs must learn to work collaboratively with payers—perhaps through health information technology (HIT)—to establish best practices that improve reimbursements on claims for novel genetic tests.
Harnessing the ever-increasing volume of diagnostic data that genetic testing produces should be a high priority for labs, said William Morice II, MD, PhD, CEO and President of Mayo Clinic Laboratories.
“There will be an increased focus on getting information within the laboratory … for areas such as genomics and proteomics,” Morice told the keynote audience at the Executive War College on Wednesday.
“Wearable technology data is analyzed using machine learning. Clinical laboratories must participate in analyzing that spectrum of diagnostics,” said William Morice II, MD, PhD (above), CEO and President of Mayo Clinic Laboratories. Morice spoke during this week’s Executive War College.
Precision Medicine Efforts Include Genetic Testing and Wearable Devices
For laboratories new to genetic testing that want to move it in-house, Morice outlined effective first steps to take, including the following:
Determine and then analyze the volume of genetic testing that a lab is sending out.
Research and evaluate genetic sequencing platforms that are on the market, with an eye towards affordable cloud-based options.
Build a business case to conduct genetic tests in-house that focuses on the long-term value to patients and how that could also improve revenue.
A related area for clinical laboratories and pathology practices to explore is their role in how clinicians treat patients using wearable technology.
For example, according to Morice, Mayo Clinic has monitored 20,000 cardiac patients with wearable devices. The data from the wearable devices—which includes diagnostic information—is analyzed using machine learning, a subset of artificial intelligence.
In one study published in Scientific Reports, scientists from Mayo’s Departments of Neurology and Biomedical Engineering found “clear evidence that direct seizure forecasts are possible using wearable devices in the ambulatory setting for many patients with epilepsy.”
Clinical laboratories fit into this picture, Morice explained. For example, depending on what data it provides, a wearable device on a patient with worsening neurological symptoms could trigger a lab test for Alzheimer’s disease or other neurological disorders.
“This will change how labs think about access to care,” he noted.
For Payers, Navigating Genetic Testing Claims is Difficult
While there is promise in genetic testing and precision medicine, from an administrative viewpoint, these activities can be challenging for payers when it comes to verifying reimbursement claims.
“One of the biggest challenges we face is determining what test is being ordered. From the perspective of the reimbursement process, it’s not always clear,” said Cristi Radford, MS, CGC, Product Director at healthcare services provider Optum, a subsidiary of UnitedHealth Group, located in Eden Prairie, Minnesota. Radford also presented a keynote at this year’s Executive War College.
Approximately 400 Current Procedural Terminology (CPT) codes are in place to represent the estimated 175,000 genetic tests on the market, Radford noted. That creates a dilemma for labs and payers in assigning codes to novel genetic tests.
During her keynote address, Radford showed the audience of laboratory executives a slide that charted how four labs submitted claims for the same high-risk breast cancer panel. CPT code choices varied greatly.
“Does the payer have any idea which test was ordered? No,” she said. “It was a genetic panel, but the information doesn’t give us the specificity payers need.”
In such situations, payers resort to prior authorization to halt these types of claims on the front end so that more diagnostic information can be provided.
“Plans don’t like prior authorization, but it’s a necessary evil,” said Jason Bush, PhD, Executive Vice President of Product at Avalon Healthcare Solutions in Tampa, Florida. Bush co-presented with Radford.
[Editor’s note: Dark Daily offers a free webinar, “Learning from Payer Behavior to Increase Appeal Success,” that teaches labs how to better understand payer behavior. The webinar features recent trends in denials and appeals by payers that will help diagnostic organizations maximize their appeal success. Click here to stream this important webinar.]
Payers Struggle with ‘Explosion’ of Genetic Tests
In “UnitedHealth’s Optum to Offer Lab Test Management,” Dark Daily’s sister publication The Dark Report, covered Optum’s announcement that it had launched “a comprehensive laboratory benefit management solution designed to help health plans reduce unnecessary lab testing and ensure their members receive appropriate, high-quality tests.”
Optum sells this laboratory benefit management program to other health plans and self-insured employers. Genetic test management capabilities are part of that offering.
As part of its lab management benefit program, Optum is collaborating with Avalon on a new platform for genetic testing that will launch soon and focus on identifying test quality, streamlining prior authorization, and providing test payment accuracy in advance.
“Payers are struggling with the explosion in genetic testing,” Bush told Executive War College attendees. “They are truly not trying to hinder innovation.”
For clinical laboratory leaders reading this ebriefing, the takeaway is twofold: Genetic testing and resulting precision medicine efforts provide hope in more effectively treating patients. At the same time, the genetic test juggernaut has grown so large so quickly payers are finding it difficult to manage. Thus, it has become a source of continuous challenge for labs seeking reimbursements.
Heath information technology may help ease the situation. But, ultimately, stronger communication between labs and payers—including acknowledgement of what each side needs from a business perspective—is paramount.
Healthcare attorneys advise medical laboratory leaders to ensure staff understand difference between EKRA and other federal fraud laws, such as the Anti-kickback Statute
More than four years have passed since Congress passed the law and yet the Eliminating Kickbacks in Recovery Act of 2018 (EKRA) continues to cause anxiety and confusion. In particular are the differences in the safe harbors between the federal Anti-Kickback Statute (AKS) and Stark Law versus EKRA. This creates uncertainty among clinical laboratory leaders as they try to understand how these disparate federal laws affect business referrals for medical testing.
According to a news alert from Tampa Bay, Florida-based law firm, Holland and Knight, “EKRA was enacted as part of comprehensive legislation designed to address the opioid crisis and fraudulent practices occurring in the sober home industry.” However, “In the four years since EKRA’s enactment, US Department of Justice (DOJ) enforcement actions have broadened EKRA’s scope beyond reducing fraud in the addiction treatment industry to include all clinical laboratory activities, including COVID-19 testing.”
It is important that medical laboratory leaders understand this law. New cases are showing up and it would be wise for clinical laboratory managers to review their EKRA/AKS/Stark Law compliance with their legal counsels.
“Keeping in mind that [EKRA is] a criminal statute, clinical laboratories need to take steps to demonstrate that they’re not intending to break the law,” said attorney David Gee, a partner at Davis Wright Tremaine, in an exclusive interview with The Dark Report. “[Lab leaders should] think about what they can do to make their sales compensation program avoid the things the government has had such a problem with, even if they’re not sure exactly how to compensate under the language of EKRA or how they’re supposed to develop a useful incentive compensation plan when they can’t pay commissions.” David Gee will be speaking about laboratory regulations and compliance at the upcoming Executive War College in New Orleans on April 25-26, 2023. (Photo copyright: Davis Wright Tremaine.)
How Does EKRA Affect Clinical Laboratories?
The federal EKRA statute—originally enacted to address healthcare fraud in addiction treatment facilities—was “expansively drafted to also apply to clinical laboratories,” according to New York-based law firm, Epstein Becker and Green. As such, EKRA “applies to improper referrals for any ‘service,’ regardless of the payor. … public as well as private insurance plans, and even self-pay patients, fall within the reach of the statute.”
In “Revised Stark Law, Anti-Kickback Statute Rules Are Good News for Labs,” Dark Daily’s sister publication The Dark Report noted that EKRA creates criminal penalties for any individual who solicits or receives any remuneration for referring a patient to a recovery home, clinical treatment facility, or clinical laboratory, or who pays or offers any remuneration to induce a referral.
According to Epstein Becker and Green, EKRA:
Applies to clinical laboratories, not just toxicology labs.
Has relevance to all payers: Medicare, Medicaid, private insurance plans, and self-pay.
Is a criminal statute with “extreme penalties” such as 10 years in prison and $200,000 fine per occurrence.
Exceptions are not concurrent with AKS.
Areas being scrutinized include COVID-19 testing, toxicology, allergy, cardiac, and genetic tests.
“For many clinical laboratories, a single enforcement action could have a disastrous effect on their business. And unlike other healthcare fraud and abuse statutes, such as the AKA, exceptions are very limited,” Epstein Becker and Green legal experts noted.
“Therefore, a lab could potentially find itself protected under an AKS safe harbor and still potentially be in violation of EKRA,” they continued. “The US Department of Health and Human Services (HHS) and the DOJ have not provided any clarity regarding this statute (EKRA). Without this much needed guidance clinical laboratories have been left wondering what they need to do to avoid liability.”
EKRA versus AKS and Stark Law
HHS compared AKS and the Stark Law (but not EKRA) by noting on its website prohibition, penalties, exceptions, and applicable federal healthcare programs for each federal law:
AKS has criminal fines of up to $25,000 per violation and up to a five-year prison term, as well as civil penalties.
The Stark Law has civil penalties only.
AKS prohibits anyone from “offering, paying, soliciting, or receiving anything of value to induce or reward referrals or generate federal healthcare program business.”
The Stark Law addresses referrals from physicians and prohibits the doctors “from referring Medicare patients for designated health services to an entity with which the physician has a financial relationship.”
EKRA is more restrictive than AKS, as it prohibits some compensation that AKS allows, healthcare attorney Emily Johnson of McDonald Hopkins in Chicago told The Dark Report.
Recent enforcement actions may help lab leaders better understand EKRA’s reach. According to Holland and Knight:
Malena Lepetich of Belle Isle, Louisiana, owner and CEO of MedLogic LLC in Baton Rouge, was indicted in a $15 million healthcare fraud scheme for “allegedly offering to pay kickbacks for COVID-19 specimens and respiratory pathogen testing.”
In S-G Labs Hawaii, LLC v. Graves, a federal court concluded the laboratory recruiter’s contract “did not violate EKRA because the recruiter was not referring individual patients but rather marketing to doctors. According to the court, EKRA only prohibits percentage-based compensation to marketers based on direct patient referrals.”
In another federal case, United States v. Mark Schena, the court’s rule on prohibition of direct and indirect referrals of patients to clinical labs sent a strong signal “that EKRA most likely prohibits clinical laboratories from paying their marketers percentage-based compensation, regardless of whether the marketer targets doctors or prospective patients.”
What can medical laboratory leaders do to ensure compliance with the EKRA law?
In EKRA Compliance, Law and Regulations for 2023, Dallas law firm Oberheiden P.C., advised clinical laboratories (as well as recovery homes and clinical treatment facilities) to have EKRA policies and procedure in place, and to reach out to staff (employed and contracted) to build awareness of statute prohibitions and risks of non-compliance.
One other useful resource for clinical laboratory executives and pathologists with management oversight of their labs’ marketing and sales programs is the upcoming Executive War College on Diagnostics, Clinical Laboratory, and Pathology Management. The conference takes place on April 25-26, 2023, at the Hyatt Regency in New Orleans. A panel of attorneys with deep experience in lab law and compliance will discuss issues associated with EKRA, the Anti-Kickback Statutes, and the Stark self-referral law.
But insurers are complying under the Transparency in Coverage regulations and that is where discrepancies in the disclosure of prices to the public have been found
Despite federal regulations requiring hospitals to publicly post their prices in advance of patient services, some large health systems still do not follow the law. That’s according to a new Transparency in Coverage Report from PatientRightsAdvocate.org (PRA), which found that some hospitals are “flouting” the federal Hospital Price Transparency Rule.
By cross-referencing price disclosures by hospitals and insurance companies, which are required to publish the amounts they pay for hospital services under federal Transparency in Coverage regulations, PRA, a 501(c)(3) nonprofit, nonpartisan organization, discovered the healthcare providers’ noncompliance with federal transparency regulation.
“Prices revealed in newly released health insurance company data files show some major American hospitals are omitting prices from their required price disclosures in violation of the federal hospital price transparency rule,” according to the PRA report.
Hospitals conceal their prices because they don’t want people to know how much rates for the same procedure vary,” Sally C. Pipes (above), President and CEO of Pacific Research Institute, wrote in the Washington Examiner. “A lack of price transparency benefits hospitals but not patients or payers. The federal government should not let providers get away with flouting the law,” she added. Clinical laboratories are also required under federal law to publish their prices. (Photo copyright: The Heartland Institute.)
“PatientRightsAdvocate.org discovered several instances in which prices were omitted from the hospital files but appeared in the insurance company files,” noted the PRA report. “These discrepancies indicate that some large hospitals are not posting their complete price lists as required by the hospital price transparency rule.”
The federal Centers for Medicare and Medicaid Services (CMS) says hospitals must post standard charges in a single machine-readable digital file, and display in a consumer-friendly way, “300 shoppable services with discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges.”
But according to the PRA report and news release, the study team discovered that this was not always the case. Below are examples from the report of some of the discrepancies between prices on a hospital’s website and what payers’ websites showed as prices involving those same hospitals:
PRA’s report casts light on inconsistencies between what insurers and providers share with the public on prices.
“Today’s report confirms that hospitals are hiding prices from patients and [this] calls into question their public assertions that individual prices don’t exist for many of the services they provide,” said PRA Founder and Chairman Cynthia Fisher in the news release.
“The data made possible by the [federal] Transparency in Coverage (TiC) rule reveals prices negotiated with insurers that hospitals did not disclose in the machine-readable files required by law. Our report is just the tip of the iceberg of what the staggering amount of data in TiC disclosures will reveal,” she added.
Ascension, HCA Note Compliance with CMS Rule
For its part, Ascension, in a statement to Healthcare Dive, confirmed it is complying with the CMS rule and offers consumers tools to estimate costs.
“We’re proud to be a leader in price transparency,” Ascension said.
HCA told Healthcare Dive it has “implemented federal transparency requirements in January 2021 and provides a patient payment estimator in addition to posting third-party contracted rates.”
Advice for Clinical Laboratories Sharing Test Prices
Hospitals flouting the federal transparency rule is not new. Dark Daily has covered other similar incidences.
Clinical laboratory leaders who oversee multiple labs in healthcare systems may benefit from advice about CMS rule compliance shared in HealthLeaders.
Post a separate file for each provider.
Be “cognizant” of different sets of standard charges for multiple hospitals under one license.
“Today’s healthcare consumer wants to know prices in advance of service. That’s because many have high deductible health insurance plans of, say, $5,000 for an individual or $10,000 for a family as the annual deductible,” said Robert Michel, Editor-in-Chief of Dark Daily and its sister publication The Dark Report.
Clinical laboratory tests may not be the most expensive healthcare service. But they are critical for high-quality hospital care and outcomes. Increasingly, patients want to know in advance how much they will cost. This is true of patients of all generations, from Baby Boomers to Generations X, Y, and Z.
Organizations representing clinical laboratories and other critical healthcare providers urged Congress to pass the Saving Access to Laboratory Services Act by January 1, 2023, to prevent deep cuts in reimbursements
Lessons about the essential role of clinical laboratories during a pandemic was the central theme in a significant publication released recently. The authors were the presidents of two of the nation’s largest healthcare companies and their goal was to connect the value clinical labs delivered during the COVID-19 pandemic to the financial threat labs face should the Protecting Access to Medicare Act of 2014 (PAMA) fee cuts coming to the Medicare Part B Clinical Laboratory Fee Schedule (CLFS) be implemented.
In an article for RealClearPolicy, healthcare executives William G. Morice II, MD, PhD (left), CEO/President, Mayo Clinic Laboratories, and Matt Sause (right), President of Roche Diagnostics North America wrote, “Without PAMA reform, labs could face drastically reduced reimbursement for commonly performed lab tests for a host of diseases.” (Photo copyrights: Mayo Clinic Laboratories/Roche Diagnostics.)
IVD Companies and Clinical Laboratories Sound Alarm
Morice and Sause warn that—without PAMA reform—the nation’s vital medical laboratories will face “drastically reduced reimbursement” for commonly performed lab tests for diseases, including diabetes, heart disease, and cancer. Reimbursement cuts may cause clinical labs serving “the most vulnerable and homebound” to reduce services or close, they noted.
“To emerge from nearly three years of a pandemic by sending the signal that austerity is our nation’s health policy when it comes to testing and diagnostics would be a significant mistake,” they wrote.
“If the proposed cuts to reimbursements for diagnostic tests are allowed to take effect, disparities caused by challenges with accessing diagnostic tests will likely grow even further,” the authors continued.
However, they added, “The Saving Access to Laboratory Services Act [SALSA] would reform PAMA to require accurate and representative data from all laboratory segments that serve Medicare beneficiaries to be collected to support a commonsense Medicare fee schedule that truly represents the market.”
How PAMA Affects Clinical Laboratory Reimbursements
PAMA, which became law in 2014, was aimed at marrying Medicare Part B Clinical Laboratory Fee Schedule (CLFS) reimbursement rates to rates medical laboratories receive from private payers, the National Independent Laboratory Association (NILA) explained in a news release.
But from the start, in its implementation of the PAMA statute, the methods used by the federal Centers for Medicare and Medicaid Services (CMS) to collect data on lab test prices paid by private payers—which were the basis for calculating new lab test prices for the Medicare program—were criticized by many laboratory professionals and other health experts.
Critics frequently pointed out that several types of clinical laboratories were excluded from reporting their private payer lab test prices. Thus, the data collected and used by CMS did not accurately represent the true range of prices paid for clinical lab tests by private health insurance plans, said lab industry groups.
CMS regulations “exclude most hospital outreach laboratories and physician office laboratories from data collection. This approach depresses median prices and has led to deep cuts to lab reimbursement. Many tests were cut up to 30% in 2018 when the new system went into effect,” the America Association for Clinical Chemistry (AACC) noted in a statement.
On September 8, just weeks after publication of the article authored by Morice and Sause, 26 organizations representing clinical laboratories and diagnostics manufacturers sent a letter to Congressional leaders. In it they described the financial impact on labs due to the current law’s omission of some outreach and physician office lab testing, and they urged the passage of the SALSA legislation.
“The significant under-sampling led to nearly $4 billion in cuts to those labs providing the most commonly ordered test services for Medicare beneficiaries,” the organizations wrote in their letter. “For context, the total CLFS spend for 2020 was only $8 billion.”
Reimbursement Cuts to Lab Tests are Coming if SASLA Not Passed
“Without Congressional action, beginning on Jan. 1, 2023, laboratories will face additional cuts of as much as 15% to some of the most commonly ordered laboratory tests,” the NILA said.
“Enactment of the Saving Access to Laboratory Services Act (SALSA/H.R. 8188/S.4449) is urgently needed this year, to allow laboratories to focus on providing timely, high quality clinical laboratory services for patients, continuing to innovate, and building the infrastructure necessary to protect the public health,” NILA added.
In an editorial she wrote for Clinical Lab Products, titled, “Be a Labvocate: Help Pass SALSA Legislation,” Kristina Martin, Clinical Pathology Operations Director, Department of Pathology, University of Michigan Medicine said, “The SALSA legislation provides a permanent, pragmatic approach to evaluating the CLFS, eliminating huge swings, either positive or negative as it pertains to Medicare reimbursement. It also allows for a more comprehensive evaluation of data to be collected from a broader sampling of laboratory sectors.”
Uses statistical sampling for widely available tests performed by a “representative pool of all clinical laboratory market segments.”
Introduces annual “guardrails” aimed at creating limits for reductions as well as increases in CLFS rates.
Excludes Medicaid managed care rates since they are not true “market rates.”
Gives labs the option to exclude mailed remittances from reporting if less than 10% of claims.
Eases clinical labs’ reporting requirements by changing data collection from three years to four.
Make Your Views Known
Proponents urge Congress to act on SALSA before the end of the year. Clinical laboratory leaders and pathologists who want to express their views on SALSA, test reimbursement, and the importance of access to medical laboratory testing can do so through Stop Lab Cuts.org. The website is sponsored by the ACLA.
Survey respondents specifically mentioned clinical laboratory charges as part of the balance billing they were receiving
Unexpected medical bills—which often include clinical laboratory test and pathology charges—are still arriving in patients’ mailboxes, even though the federal No Surprises Act (H.R.3630) was passed as part of the Consolidated Appropriations Act, 2021 specifically to prevent that from happening.
According to a survey conducted by Morning Consult, a global research firm with offices in New York, Washington, D.C., and San Francisco, 20% of patients said they or a family member received an unexpected medical bill in 2022.
Notably, survey respondents specifically mentioned charges for clinical laboratory testing as part of the unanticipated balance billing they received.
“Adults who received unexpected bills this year were most likely to get them for in-network lab work that was sent to an out-of-network lab for assessment, which is covered under the law, or for testing or procedures not covered by insurance, which isn’t,” a Morning Consult news release noted.
Morning Consult polled more than 2,000 adults between June 22 and June 24, 2022, according to the published results.
“The No Surprises Act ended the practice of surprise medical billing in most circumstances, providing relief for millions of patients who faced surprise medical bills they did not expect,” said Matt Eyles (above), President/CEO, America’s Health Insurance Plans, in an AHIP news release. “But more work needs to be done,” he added. Clinical laboratory managers should be aware of the federal law before balance billing their patients. (Photo copyright: Business Wire.)
When the Law Works, and When It Does Not
In “Judge Vacates Provision in No Surprises Act,” Dark Daily’s sister publication, The Dark Report, explained that the No Surprises Act aims to protect insured individuals from receiving unexpected medical bills for unanticipated emergency care or services—including clinical lab tests—that they unknowingly received from out-of-network providers.
However, certain provisions of the law can counteract its intention.
“[The No Surprises Act] doesn’t apply if a patient goes to his or her own primary care physician, or another doctor in the community, and that doctor sends that patient to an out-of-network laboratory,” healthcare attorney Charles Dunham IV, a shareholder at law firm Greenberg Traurig LLP in Houston, told The Dark Report. “In general, it applies to emergency services or a non-emergency service where the patient is in an inpatient or outpatient setting in a hospital that’s in network, and they utilize a lab that’s out of network.”
Bills for Lab Tests, Other Services Surprise Patients
Healthcare services cited by the most respondents to the Morning Consult survey that resulted in unexpected medical bills include:
Testing or procedures not covered by insurance, 34%.
Lab work at an in-network hospital or healthcare facility that was sent to an out-of-network lab for assessment, 32%.
Treatment by an out-of-network physician or specialist at an in-network hospital or healthcare facility, 21%.
Treatment at an out-of-network hospital or healthcare facility, 19%.
Transportation to an emergency department by an out-of-network ambulance, 18%.
Clinical laboratory testing was at the top of the unexpected charges, which were typically more than $1,000, according to 22% of those who received balance billing.
Could Billing Disputes Escalate?
Anatomic pathology practices, medical laboratories, and other providers who fail to comply with the No Surprises Act may be at risk. And, unfortunately, a Health Care Cost Institute study in 2020 found pathologists second only to emergency medicine physicians as specialists who most often bill for out-of-network hospital charges, according to a Dark Daily e-briefing.
“It’s possible providers continuing to send patients bills that violate the No Surprises Act may be targeted by the U.S. Department of Justice at some future time, even several years from now. So, there is risk,” said Robert Michel, Editor-in-Chief of Dark Daily and The Dark Report.
“Also, patients who realize that bills they received from healthcare providers were in violation of the No Surprises Act could potentially file class action lawsuits against those providers,” Michel added.
In fact, 63% of those surveyed by Morning Consult expressed confidence in their ability to address a surprise bill they deemed illegal. Thus, healthcare providers, clinical laboratory leaders, and pathology group managers are advised to brush up their understanding of the federal ban on certain types of balance billing.
“As the administration continues to work on implementing the law, it must continue to keep patients out of the middle of billing disputes and raise awareness about the law among both patients and providers,” said a spokesperson for Sen. Maggie Hassan (D-N.H), a cosponsor of the No Surprises Act (NSA), in the Morning Consult news release.
Only 16% of adults surveyed said they were aware of the No Surprises Act, down from 19% at the law’s launch in January, the study found.
Another Study Finds NSA Making Progress
America’s Health Insurance Plans (AHIP) and the Blue Cross and Blue Shield Association (BCBS) conducted a survey of commercial health plans. According to their findings, in its first two months, the No Surprises Act may have prevented two million surprise bills from reaching commercially insured patients, and it is possible 12 million surprise bills may be averted in 2022.
Though a much smaller survey, the 31 respondents to the AHIP-BCBS study represented 115 million commercial enrollees or 54% of the total commercial insurance market. The data they shared included:
Number of commercial claims incurred and paid during January and February.
Number of those claims that were No Surprises Act-eligible.
From those data, the study found 600,000 No Surprises Act-eligible claims in the market in January and February. Following calculations using 2020 Census data of commercial enrollees (213 million), the study authors estimated the No Surprises Act may stop 12 million unexpected healthcare bills in 2022.
Clinical laboratory tests will likely be a focal point in more studies about the No Surprises Act’s effectiveness. Medical lab and anatomic pathology group leaders may want to check-in with reference laboratory and billing company partners to ensure compliance with the most recent federal laws concerning balance billing.
