| |  | | | | | | Did someone forward this newsletter to you? Sign up here to get it in your inbox. In today’s issue: - The Trump administration finalizes a rule impacting the arbitration system for surprise medical bills that’s been in the works since 2023 — kicking off a brand-new round of lobbying from industry and consumer groups
- Providers and insurers are pushing regulators and Congress for very different fixes
- Why the No Surprises Act joins a growing list of health care policies that solved one problem but created new political battles
Hello, everyone. This is the Health Brief newsletter. There’s a lot on the docket in the health world, but today I want to focus on a new regulation overseeing the surprise billing rule’s arbitration process. It’s wonky, but the issue — and this rulemaking specifically — has prompted the most traffic to my email and text inboxes of anything I’ve written about in the last several months. But it’s only getting started. While groups representing doctors and insurance companies, which have been warring over the law’s implementation, all generally called it a good first step, everyone is seeking more action. So let’s get into it. And it’s Feedback Friday, so let me know what’s on your mind. Also, send any tips, documents or intel to megan.wilson@washpost.com, or message me on Signal at megan.434. |  | | Insurers and providers called the rule a good first step, but both say there is more to do. (iStock) | | | |  | The Lead Brief | The battle between insurers and providers over implementing the federal law meant to protect patients from being hit with high-cost medical bills is entering a new phase. The Trump administration finalized a long-awaited rule intended to streamline the arbitration process used to resolve payment disputes between health plans and out-of-network providers, and reduce the backlog of claims. The new rule — led by the Treasury Department, Labor Department and Department of Health and Human Services — focuses largely on the mechanics of the independent dispute resolution, or IDR, process, rather than the underlying payment fights that have fueled years of litigation and political battles. But while both sides welcomed parts of the regulation, neither sees it as the final word. Providers and insurers have been ramping up their advocacy in the last several months to push federal regulators and policymakers to change how it’s implemented. And it’s only likely to become more intense. The two sides have been in a legal and regulatory battle over the No Surprises Act since it was enacted into law nearly six years ago, with each pointing fingers at the other for trying to game the system. “This is the ‘Back to the Future’ of rulemaking: Washington is solving 2023’s process problems in the middle of 2026’s cost crisis,” said Adam Buckalew, a lobbyist at alb solutions who represents insurers, referring to the year the rule was first proposed. “This isn’t a paperwork problem; it’s a cost problem. And this rule does not solve it.” THE BATTLEGROUND While the law has largely fulfilled Congress’s primary objective — keeping patients from being hit with unexpectedly high medical bills if they unwittingly see an out-of-network provider — the arbitration system Congress created to settle payment disputes has become one of the health care industry’s most contentious battlegrounds. - Providers have largely claimed that health care plans have tried to undermine the system by proposing low payment rates or failing to reimburse for services at all, while insurers argue that a small number of providers is abusing the system and inundating it with ineligible claims.
- Federal data shows that providers are winning disputes over payment about 88 percent of the time, with roughly the same proportion of the awards exceeding the median contracted rate that plans offer for a service. Critics argue that these inflated costs raise prices across the entire health care system — including for patients.
→ This rule mostly avoids stepping into those squabbles. WHAT’S IN THE RULE The administration is pitching the 600-page regulation as a way to reduce delays within the surprise billing arbitration system. - Insurers will be required to use standardized claim codes to help providers determine whether a claim is eligible for arbitration. Plans will have to register with the federal government and provide details about which services are covered. Negotiations will become more structured and documented.
- The rule also expands flexibility for batching similar claims together into a single dispute, which regulators argue should reduce administrative burden and lower costs. Each batch of claims is limited to 50 individual line items so arbitrators can make “timely determinations” about the eligibility of the claims.
- Congress built in a “cooling-off” period to slow repeat arbitration submissions under the No Surprises Act. Now, for batched cases, regulators are speeding things up by cutting the wait from 90 days to 30 business days, arguing it makes the process more efficient. But it also accelerates reentry for batches of similar claims, which critics argue could add to the system strain rather than relieving it.
The American Society of Anesthesiologists said it’s been working with regulators for more than two years to “improve” the process, said Patrick Giam, the association’s president, who added that the agencies had finalized “a rule that incorporates many of the meaningful policy changes physicians have been calling for.” → The administration intends for the rule to help clear a backlog of claims that has ballooned far beyond what had been envisioned when the law took effect: Regulators initially projected that there would be about 17,000 IDR claims each year. However, there have been more than 5.7 million disputed bills submitted to arbitration between April 2022 and March 2026, according to federal data — including more than 827,000 in the first three months of this year alone. - One of the rule’s provisions reduces the administrative filing fee from $115 to $15 per party per dispute. Cutting the fees “doesn’t drain the backlog; it attracts more claims to it, like a moth to a flame,” says Navin Nagiah, the CEO and co-founder of Daffodil Health, a health tech company focused on automating health plan administration.
What to watch: The Centers for Medicare and Medicaid Services is also beginning construction of what could become the central operating system for the entire process: a new centralized platform that will handle registration, dispute tracking and communications between parties. “We are cutting fees, improving transparency and restoring order to a system that was overwhelmed,” said CMS Administrator Mehmet Oz, in a statement. “This is about making government processes efficient, accountable and focused on results.” | | | | | | Industry Rx | Providers, insurers and consumer groups are already using the regulation as a launchpad for the next round of advocacy, emphasizing that regulators and Congress still have more work to do. PROVIDERS - Providers want more scrutiny of insurer payment calculations — the so-called qualifying payment amounts (QPA) representing benchmark payment amounts — and stronger enforcement of arbitration awards.
The American Society of Anesthesiologists, the American College of Emergency Physicians and the American College of Radiology said in a joint statement that “finalizing the rule does not end the work.” “The reforms will only deliver on their promise if they are backed by rigorous, consistent enforcement and real consequences for insurance companies that fail to comply, particularly for those that delay or withhold payment after a physician prevails in the IDR process,” the groups said. L. Anthony Cirillo, the president of the American College of Emergency Physicians, called for “stronger oversight, audits and enforcement,” especially pertaining to “artificially low” benchmark payment amounts. His organization has been in talks with the administration about changes to the process and lobbying policymakers on Capitol Hill on legislation called the No Surprises Act (NSA) Enforcement Act, which has garnered 30 bipartisan co-sponsors in the House. HaloMD, which helps providers submit billing disputes with insurance companies for arbitration, is also throwing its weight behind the legislation. The company, which has been building its Washington presence, has been a lightning rod for criticism as one of the most prolific parties in surprise billing disputes. “Doctors want to be in-network, but there is no incentive for insurers to create durable networking arrangements until the law is meaningfully enforced,” said Patrick Velliky, the company’s chief external affairs officer. “The final piece now rests with Congress. The NSA Enforcement Act would create the enforcement mechanisms needed to ensure arbitration awards are honored and paid promptly.” → Multiple health plans have unsuccessfully sued HaloMD, claiming it improperly flooded the arbitration system with disputed charges to overwhelm the process and secure higher payment amounts. Judges have dismissed four such cases in the last six weeks — including one in Texas last week. INSURERS - Insurers want tighter restrictions on dispute eligibility, additional oversight of high-volume filers and reforms aimed at reducing award amounts.
The Coalition Against Surprise Medical Billing argued that additional action is needed from regulators and lawmakers to address what the organization sees as distorted incentives in the arbitration system and excessive awards benefiting some private equity-backed provider groups and middlemen such as HaloMD. CONSUMER ADVOCATES - Consumer advocates are also taking aim at private equity-backed provider groups, seeking broader structural changes to close what it says are loopholes in the surprise billing law.
“While we acknowledge the positive incremental steps, this new regulation will not stop the biggest abusers from continuing to manipulate the independent dispute-resolution process, generating millions in profits from inflated payment determinations at consumers’ expense,” said Anthony Wright, the executive director of Families USA, about the new rulemaking. Wright notes that the group had been a “proud supporter” of the No Surprises Act, but had also known about “gaps and loopholes” in the law that it says are now being exploited. The dispute-resolution process established by the surprise-billing law is governed by “baseball-style arbitration,” where the arbitrator picks either the payment offered by the insurer or provider — with no compromises. “We advocated for setting benchmark rates based on median in-network prices [to resolve medical billing disputes], rather than this baseball-style arbitration system without clear guidelines, which invites manipulation,” Wright said. “To truly protect consumers and keep costs down, Congress must close loopholes that allow providers to profit at patients’ expense.” | | | |  | From our notebook | The whole dispute has me thinking: While Washington has enacted legislation or regulations to solve many] health care problems, the fights are still ongoing. On surprise medical bills, the battle used to be between patients and providers. But that’s now shifted to a war among insurers and providers. It’s a pattern that’s playing out across other health policies. - Congress enacted health care price transparency measures to help consumers figure out how much care will cost them, and regulators put rules on the books. But the data can be overwhelming, incomplete, and hard to use or compare. Although there’s been an attempt by private industry and the Trump administration to simplify the data and make it more readily available, it’s still difficult for patients to access the information.
- The 340B discount drug program was meant to help hospitals that treat a large number of lower-income patients stretch their limited resources. But now a fight is brewing about how and whether to rein it in as questions arise about whether hospitals are using the savings to benefit patients.
- Lawmakers reformed how doctors are paid under Medicare in 2015, with legislation called the Medicare Access and CHIP Reauthorization Act, or MACRA. This was an attempt to avoid having to pass an annual “doc fix” to avert payment cuts for doctors — a process that tended to always come down to the wire amid larger funding discussions.
→ While Congress no longer faces automatic payment cliffs, doctors have repeatedly returned to Capitol Hill seeking relief, arguing that payments have failed to keep pace with inflation. Two House committees recently held hearings, with a bipartisan consensus to make changes to MACRA but there isn’t yet broad support among lawmakers on Capitol Hill to reopen the debate around physician payments. | | | | | | | | | | |
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