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Renown Health sues over “No Surprises Act”

By Bob Conrad

Mental health professionals concerned with law too

The federal “No Surprises” Act was drafted with positive intentions, according to most health providers affected by the new law. Upon passage, the Act would protect patients from surprise charges by medical providers they may not have known about prior to seeking emergency or medical treatment.

But small mental health providers say the act, which passed Jan. 1, 2022, ensnares them into a Draconian, unrealistic policy that could put them out of business. They are not alone in their concerns about the law.

The act requires counselors and therapists to provide good faith estimates for their services, something they say isn’t always possible. 

“The idea of having to send out all these good faith estimates and things like that is really onerous for the small practices,” said Ken Clark, a family therapist based in Arkansas who also operates a Facebook group focused on how the Act will impact mental health professionals. “What was actually required on the good faith estimates that we’re supposed to provide the consumer. So most of us would just like to say, here’s what our hourly rate is, and the average client might see six to eight sessions.”

Instead, he added, smaller private practices are being forced to estimate a weekly cost for therapy for an estimated amount of time. Some people may need three to five sessions, but others may need more extended treatment. A therapist won’t necessarily know that prior to seeing clients. 

“This is cumbersome and punitive in my opinion.”

It’s even worse, Clark said. The language of the bill requires therapists to give a diagnosis prior to even seeing a client.

“If somebody comes into our clinic, whether they’re in network or out of network, and we have to provide them one of these good faith estimates prior to the appointment, … we by the letter of the law have to say what the diagnosis is,” he said. “There’s no way we know what’s going on with somebody from a mental health point of view before we’ve spent hours with them. 

“We’re essentially feeling like we’re being forced by the government to fabricate a diagnosis on somebody we haven’t even met yet. It goes against all of our ethical standards, as therapists.”

Clark said the bill correctly addresses surprise medical billing practices that have harmed patients, but he explained that applying the same rules to outpatient mental health providers is harmful.

One local therapist said she does not work with insurance companies and only accepts self-paying clients. 

“I believe that it will benefit the insurance companies more than clients in the long run. The practitioners who are self-pay to avoid the confusion and red tape of insurance, as well as to provide an alternative, are the ones who will suffer,” Jill Pellicciarini told This Is Reno. “I do believe in people having enough information to make an educated decision about the cost of their treatment. 

“All self-pay only practitioners specify the exact cost of their services in their intake paperwork anyway. This is cumbersome and punitive in my opinion.”

The American Psychiatric Association confirmed that its members who are in private practice and don’t accept insurance still have to comply with the law. 

They recommended psychiatrists “come up with standard language” for diagnoses prior to seeing a patient and “listing the cost per session, an estimated number of sessions and then calculating what that would be for the defined period (full or partial year).”

That’s onerous, Clark said.

“This is going to squeeze profit margins at a whole bunch of small businesses,” he explained. “When you’re a private practitioner, and you [have] one part-time administrative person that now needs to be full time to help you comply with this act, without your revenue going up at all, that’s a big impact on one-and-a-half person business.”

The American Psychological Association, on its website, said provisions of the Act raise numerous concerns for its members. It is seeking to modify the law and “will engage in advocacy on various fronts…in anticipation of the next major regulatory action this year…”

Renown signs on to lawsuit

The act was designed to prevent doctors and hospitals from “billing patients more than the applicable in-network cost sharing amount; a penalty of up to $10,000 for each violation can apply,” according to the Kaiser Family Foundation (KFF). “That this law passed with strong bipartisan support is an indication of the need for these protections. That federal agencies moved swiftly to implement the new law signals intent to make it work as effectively as possible.”

The act has also received pushback from national medical organizations, however. The American Hospital Association (AHA), American Medical Association and hospitals, including Renown Health, filed litigation in early December seeking to fix what they said are problems with the Act. 

Renown’s Reno hospital and a temporary triage tent it erected at the onset of the COVID-19 pandemic. Image: Trevor Bexon / This Is Reno

Their concerns are different from those of therapists.

Renown officials said that the rule “will have a significant and devastating impact to both Renown’s financial viability, as well as our ability to serve the healthcare needs of our community.” 

In a statement to This Is Reno, a Renown spokesperson, which the hospital would not identify, said, “Our goal is to ensure patients are not at risk to pay large unexpected out-of-network bills and ensure hospitals, doctors and insurers have a fair and unbiased process to negotiate and eventually arbitrate, if needed, to settle these out of network bills.”

AHA representatives said federal regulators ignored some of the adverse consequences they said they identified in the bill.

“Federal regulators … deviated from this balanced approach in their implementing rules and created an unnecessary conflict between patient financial protections and access to care,” they said. “Patients’ protection from surprise bills should not compromise their access to the hospitals and doctors they need.

“We have repeatedly called upon federal regulators to implement the law as Congress intended, with this careful balance in mind, to no avail. That is why we had to bring this lawsuit.”

The American College of Radiology also issued a statement about the Act. They said it “fueled an insurer profit grab.”
“Although the ‘No Surprises Act’ was intended to resolve provider-insurer out of network care billing disputes in a balanced manner, with patients held harmless, the Surprise Billing Interim Final Rule has fueled an insurer profit grab that negatively affects all care — in and out of network,” the organization notes on its website. “The impact may be particularly hard felt in rural and underserved communities.”

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