Providers Accuse NC Payer of Abusing No Surprises Act, Cutting Rates

The American Society of Anesthesiologists (ASA) recently accused BlueCross BlueShield of North Carolina of abusing the No Surprises Act to manipulate the market by pressuring clinicians into lower in-network rates before the law even goes into effect.

 The ASA suspects the payer of using “strong-arm” tactics such as “take it or leave it” ultimatums to manipulate clinicians into lower in-network rates.

BlueCross BlueShield of North Carolina has allegedly been sending letters to anesthesiology and other physician practices within the state, saying that they will terminate contracts unless physicians immediately agree to payment reductions from 10 percent to over 30 percent.

The insurance provider attributed the implementation of the No Surprises Act as the reason for the payment reductions despite the law taking effect until Jan 1, 2022, ASA stated.

The physician group states the insurance company is manipulating patient protection laws regarding out-of-network bills and jeopardizing patient access to care.

“Insurance companies are threatening the ability of anesthesiologists to fully staff hospitals and other health care facilities. Left unchecked, actions like these of BlueCross BlueShield of North Carolina will ultimately compromise timely access to care for patients across the country,” ASA said in a press release.

The No Surprises Act was created to protect patients from receiving unexpected out-of-network medical billing. The impending law will require providers and payers to agree on out-of-network rates when surprise billing occurs through an third-party arbitration process. 

The arbitration process requires the conflicting parties to submit their proposed rates for the out-of-network services. An “independent dispute resolution” entity will then issue a determination, taking the “qualifying payment amount” (QPA) into consideration. The QPA is the payer’s median contracted rate for the same or similar service in an area.

Providers have expressed that the arbitration process unfairly favors insurance companies. 

The letter sent by BlueCross BlueShield of North Carolina stated the new legislation allowed them to make a significant change in their contract with emergency service providers, hospital-based providers, and ambulance services. 

“Where Blue Cross NC may have previously contracted at what we deemed an inflated rate that is at least somewhat lower than charges in order to avoid paying at full charge, we are now able to seek to contract at a rate more in line with that we consider to be reasonable,” BlueCross BlueShield of North Carolina wrote in the letter, acquired by the ASA.

The insurance provider stated that the immediate payment reduction would allow them to negotiate final rates once QPA amounts are established.

“The clear intent of the insurance company in taking this action is to improve its negotiating position against community physician practices in the dispute resolution process outlined in the recently released Interim Final Rule implementing the legislation,” stated the ASA in the press release. 

“Instead of expanding in-network access for patients, BlueCross BlueShield of North Carolina has demonstrated what we explained to Congress and the rule-making agencies would happen: insurance companies will use their overwhelming market power and the No Surprises Act’s flawed rules to push more physicians out of insurance networks and fatten their own bottom line.”