Surprise Medical Billing May Eliminate Restrictive Networks

Brett M. Coldiron, MD

January 20, 2021

Certainly, this has been a tumultuous year for health care, as well as the nation in general. There is so much to cover it is hard to know where to begin.

Against a background of a swelling pandemic, I remain confused about the new evaluation and management coding system, and suspect there will be much more training to be rolled out. It is excellent news that the Paycheck Protection Program has been renewed for a second pass, if you can demonstrate that you suffered at least a 25% drop in income for at least one quarter last year, and have fewer than 300 employees – which covers most dermatology practices. I plan to discuss the impact of price transparency in a future column, but today will discuss one area, where we have had the passage of major health care legislation, that may have been overlooked.

The surprise medical billing act, or "No Surprises Act," was a bipartisan congressional agreement, which means it is likely to "stick" no matter the change in executive or legislative branches.

Starting in January 2022, patients are protected from surprise medical bills. For nonemergency services and services outside hospitals and other facilities, a patient can only be billed for the coinsurance/copay that they would have had if the patient had been in network unless you go through a consent process by which you inform the patient that you are out-of-network, inform them of the costs, and inform them of other in-network providers. It also requires that patients' in-network cost-sharing payments for out-of-network surprise bills are attributed to a patient's in-network deductible.

In section 103, it further states that, where out-of-network rates are determined, there will be a 30-day open negotiation period for providers and payers to settle out-of-network claims. It also states that if the parties are unable to reach a negotiated agreement, they may access a binding arbitration process – referred to as an independent dispute resolution (IDR) – in which one offer prevails. Providers may batch similar services in one proceeding when claims are from the same payer. The IDR process will be administered by independent, unbiased entities with no affiliation to providers or payers.

The IDR entity is required to consider the market-based median in-network rate, alongside relevant information brought by either party, information requested by the reviewer, as well as factors such as the provider's training and experience patient acuity, and the complexity of furnishing the item or service, in the case of a provider that is a facility. Other factors include the teaching status, case mix and scope of services of such facility, demonstrations of good faith efforts (or lack of good faith efforts) to enter into a network agreement, prior contracted rates during the previous 4 plan-years, and other items. Billed charges and public payer (Medicare and Medicaid) rates are excluded from consideration. This should result in a payment closer to private insurance rates.

As many of you know, another one of the long-term outrages by insurers has been the closure of their networks and delisting of dermatologists. I have written about this situation before in this column. Insurers have also refused to update their provider lists, effectively denying care by the magical process of not having to pay for medical care, because there aren't any medical providers.

Inaccurate Physician Rosters

Obviously, one source of surprise medical bills that is easily correctable are inaccurate insurance company physician rosters. The Centers for Medicare & Medicaid Services implemented new rules with stiff fines instructing Medicare advantage plans to improve the accuracy of physician rosters, after a scathing General Accounting Office report 5 years ago. This process, however, was effectively neutered by the last administrationby referring all enforcement action to the states, which did not have the manpower or political will to enforce them. This new surprise billinglaw directly addresses this issue, requiring insurers to update their provider directories every 90 days and keeping them available to patients on line.

This law also eliminates gag clauses between physicians and patients regarding insurer policies.

In short, this bill solves many problems for dermatologists in their constant struggle with insurers. In particular, accurate provider directories will allow patients and companies buying insurance for their employees, to see what they are getting. I suspect the revelation of the paucity of dermatologists in many of these networks will result in increased demand for your services and perhaps provide you a little negotiating leverage.

Also, if I read this law correctly, and I inform patients of our out-of-network status and give them a reasonable estimate of the cost of their care, network participation will no longer restrict patients who want to see me. I acknowledge that we will have to make good-faith efforts to join their networks (which most of us have repeatedly) and learn how to navigate the arbitration process, but this could be a boon for small-practice dermatologists who have been shut out of participating. In fact, it may be less trouble for insurers to simply invite us in,than going through repeated arbitration.

In the bigger picture, I would remind you of the importance of your legislative participation at the past American Academy of Dermatology Association Washington fly-ins,your support of the American Medical Association, and your support of SkinPac. These issues were always in our top three asks in Washington. All this favorable language was suggested, supported, and aided by your efforts and support of organized medicine.

There is a sign on my desk my wife gave me that reads "Never, Never, Never, Give Up." I am proud of all of you for never giving up, and think you all deserve a "way to go" and a pat on the back. This law, which is a far walk from abusive air ambulance bills and unexpected anesthesia charges, amply and happily demonstrates that things can be changed for the better, and that access to care for our patients can be improved.

Coldiron is in private practice but maintains a clinical assistant professorship at the University of Cincinnati. He cares for patients, teaches medical students and residents, and has several active clinical research projects. Coldiron is the author of more than 80 scientific letters, papers, and several book chapters, and he speaks frequently on a variety of topics. He is a past president of the American Academy of Dermatology. Write to him at

This article originally appeared on, part of the Medscape Professional Network.


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