Surprise

The recently published Interim Final Rule on deciding out-of-network or surprise billing disputes between payors and providers has predictably resulted in objections.  The American Hospital Association opposes the Rule as against Congressional intent.  Insurers, for the most part, have cheered the Rule.

Large scale lobbying is nearly continuous on the Rule as the parties argue what is Congress’ intent.  Much of the lobbying and outcry is focused on the definition of the qualifying payment amount (QPA).

The Rule covers emergency services, non-emergency services furnished by non-participating provider at participating facilities and their ambulance services furnished by a non-participating provider of their ambulance services.  The Rule in general prohibits balance billing and puts limits on cost sharing.

The primary dispute relating to the Interim Final Rule is in determining how the QPA will be determined.  The act itself defines QPA as the “median” of contracted rates for similar services in a particular geographic area adjusted by the Consumer Price Index to minimize the influence of high outlier rates.  When a health plan and provider(s) can’t agree on how much the provider should be paid, there is set forth an arbitration process.  The Interim Final Rule states that an arbitrator, when deciding between the amount set forth by a provider and a healthcare plan are not equal, should pick the amount closest to the QPA.  The providers object to that because the QPA is the insurance plan’s median contract rate for the same or similar services in the geographic area.  Providers they believe that already (in their view) too low rates will be used to diminish the amount received by the providers.

I Wanna Know

ResCare Health Services, Inc. is an operator of intermediate care facilities in Indiana.  Its primary clients appear to be individuals with intellectual disabilities.  ResCare receives reimbursement for the care provided to Medicaid recipients at its facilities at a per diem rate which was to include all services provided to patients.

ResCare and Indiana Medicaid had a dispute over reimbursement due ResCare for over-the-counter medicines for ResCare residents.  ResCare attempted to obtain reimbursement from FSSA and even petitioned for administrative review of its proposed cost adjustment for over-the-counter medications.  After the ALJ ruled against ResCare, ResCare petitioned for judicial review of the ALJ determination and also sought a declaratory judgment.  The Trial Court declined the declaratory judgment request as did the Indiana Court of Appeals when ResCare appealed the Trial Court decision.

The Indiana Supreme Court said no, ResCare is entitled to file a complaint for declaratory judgment and that request could be included in its complaint/appeal regarding the ALJ decision.

While the details of every such petition will be different, this decision means that healthcare providers, after proceeding through any administrative appeals can seek a court to enter a declaratory judgment deciding the rights of the healthcare provider from that point forward.  This should be a useful tool for Indiana providers that deal with Medicaid determinations by the State of Indiana.

This case is ResCare Health Services, Inc. v. Indiana Family & Social Services Administration-Office of Medicaid Policy and Planning decided April 5, 2022.

Physician Non-Compete Agreements

Since July 1, 2020, Indiana law has required that any physician non-compete agreement contain five provisions intended to make non-compete agreements less awful.

We continue to see healthcare organizations offering physicians contracts that include non-compete agreements that do not comply with Indiana law.

We also suggest that physicians who are employees insist on a new contract rather than letting their old contract rollover year after year.  The reason is simple, the new Indiana rules on physician non-competes only apply to agreements originally entered into on or after July 1, 2020.  This may mean that annual rollover contracts entered into in 2019 or before, do not have to comply with the Indiana requirements for physician non-compete agreements that are in new physician employment agreements.

This newsletter is edited by Paul Wallace of Jones • Wallace, LLC, a member of the American Health Lawyers Association who has been representing physicians and healthcare practices for over 25 years.  Mr. Wallace assists physicians, practices and hospitals in contract items, federal legal compliance, practice entity creation, estate and wealth planning and similar issues.  Please feel free to call if you have any questions on this newsletter or legal matters at (812) 402-1600 or pwallace@joneswallace.com.