ER staffing firms keep the claims flowing in Tennessee even after federal ban on ‘surprise’ bills

A federal ban on surprise medical bills hasn’t entirely curbed the problem, though patients are no longer involved. During the law’s first six months, Tennessee has among the most disputes in the country with nearly 7,000.

The No Surprises Act that took effect last year protects patients from having to pay an extra balance for a doctor that was deemed out of network. That practice, which has come to be known as “surprise medical billing,” has largely stopped. But providers and insurers now have to work out the extra charge through independent arbitration. More than 80% of these disputes involved bills for emergency services, according to the data published by the Centers for Medicare and Medicaid Services.

“It’s unsurprising that the most aggressive surprise billers are also the most aggressive users of this arbitration process,” says Loren Adler of the USC-Brookings Schaeffer Initiative for Health Policy.

Companies that run emergency departments were the most vocal opponents of the new system and even funded an ad campaign against the law. The two largest are based in Tennessee. Taken together, Envision and TeamHealth, both owned by private equity firms, run roughly a third of the ERs nationwide. But they’re most dominant in the South, partially explaining why Texas, Florida and Georgia round out the top four states with Tennessee.

The powerful firms have viewed the law, passed by Congress in 2021, as an existential threat to their core business. Adler, and other policy experts, accuse the staffing firms of “spamming the system,” in an attempt to “annoy” insurance companies and regulators to make a point or win concessions in the future. Currently, there’s a six-month backlog for disputed claims.

“Nonsense,” says Patrick Velliky, Envision’s vice president of government affairs. “There’s nothing to be gained by us flooding the system with ineligible claims. Alternatively, there’s lots to be gained by the payers.”

Velliky says health plans are holding onto millions of dollars for months while physician groups struggle with cash flow, awaiting payment.

TeamHealth spokesman McHenry Lee says insurers are canceling contracts across the country and then attempting to “underpay” physicians, “which has caused emergency physicians to seek relief through the independent dispute resolution process in unanticipated numbers.”

The Centers for Medicare and Medicaid Services acknowledges the agency did not expect quite so many bills in arbitration — more than 90,000 in six months. To curb the case load, CMS bumped up the fee for each dispute from $50 per party to $350 this year.

Clarification: This story originally reported that the No Surprises Act protects patients from “surprise medical bills” but did not say explicitly that practice has largely stopped. A sentence stating that has been added for clarity. The headline and first paragraph have also been revised for clarity.