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Interim Surprise Billing Rule Hurts Patients

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As California’s hospitals continue to slog through the peaks and valleys of the COVID-19 pandemic, all while enduring incessant and devastating blows to the resources they rely on for patient care, an additional burden from the federal government is beginning to materialize. 

In late September, an interim federal rule related to the No Surprises Act unfortunately put a thumb on the scale in favor of insurance companies

By mandating that arbiters working to settle any payment disputes between insurance companies and hospitals use an unfavorable benchmark rate, the interim rule at once flouts the clear intent of Congress and places patients at risk.  

The rule creates an unfair process to settle conflicts, financially rewarding insurance companies for narrowing their networks and ultimately limiting access to care for patients. The bottom line is that, by favoring payers over providers in this rule, it’s patients who will suffer. 

During negotiations on the bill, Congress took action to remove language to ensure a level playing field in arbitration. This interim rule does the opposite of what Congress intended, which is to take patients out of the middle of payment disputes. By mandating a benchmark rate, health plans also are encouraged to reduce payments to providers, exacerbating the already significant financial challenges facing hospitals, which include responding to current (and future) pandemics, securing adequate staffing, and providing access to crucial services — such as obstetric care and treatment for substance use disorders and behavioral health.  

All of this means, despite CHA’s support for provisions in the act that protect patients from surprise bills in out-of-network situations, that the interim rule does not create a neutral arbitration process for providers and health plans. CHA sent a letter this week to members of the California Congressional delegation  reinforcing our opposition to the inclusion of an arbitrary benchmark in the legislation due to concerns over its potential to harm patient access to services.  

Next week, we’ll ask you to elevate your voices as well and share concerns with California’s federal representatives. Keep an eye out for a CHA Alert in the coming days, as we put the final touches on the framework of a letter you can customize to make sure this rule is not finalized in its current form.