Biden’s Executive Order and Plans for the No Surprises Act

President Biden published an executive order on July 9 titled “Promoting Competition in the American Economy.” As I’ve written about before, executive orders are not binding by law, but rather are either indications of the kind of legislative agenda the president would like to see, or parts of his agenda that can be accomplished within existing laws.

Biden’s intent with the executive order is to encourage greater competition in the U.S. economy, and the order includes some healthcare issues: it allows more access to over-the-counter hearing aids, asks for more price transparency from hospitals and insurers, and pushes government agencies to lower drug prices.

The executive order also directs the Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) to review hospital mergers to make sure they don’t raise healthcare prices. In response to this particular issue, the American Hospital Association (AHA) has said that this extra scrutiny on mergers is unnecessary and will get in the way of treating patients.

Although not specific to healthcare, the executive order also asks the FTC to ban or limit all employers’ use of employee non-compete clauses, including healthcare companies. 

An estimated one-third of commercial employers have non-compete clauses in their contracts for all of their employees, including for jobs that pay less than $13 an hour.

Biden’s ask for a prohibition on non-compete clauses is directed at Congress, which has proposed related legislation. According to opponents of non-compete clauses, these contract provisions hinder the ability of workers to change jobs because they are afraid of getting sued. As we’ve noted, an executive order itself has no real authority, so we’ll see if Congress pushes a non-compete prohibition with actual legislation. 

And while we’re on the topic of the president’s agenda, the administration has recently given some hints on when federal agencies will be releasing future No Surprises Act regulations that impact healthcare providers.

The first No Surprises Act regulation came out on July 1, so next month we can expect the second regulation that will clarify the arbitration process an out-of-network provider can utilize if that provider does not like how they have been reimbursed for claims that fall under the Act.

The healthcare industry is watching this expected regulation closely to see how the government-approved arbitrators will weigh the median in-network rate in deciding a final payment amount against other considerations, like acuity of the patient, experience and quality of the provider, and other qualitative factors.

We also can expect clarity on the Advanced Explanation of Benefits requirement in the No Surprises Act in a regulation they say will be published before January 2022, which is also the requirements compliance date. The Advanced Explanation of Benefits, if you remember, requires all providers, in-network and out-of-network, facility and individual offices, to send a good-faith estimate of charges to a patient’s health plan every time any healthcare appointment is scheduled.

The No Surprises Act also requires all in-network providers to keep their information up-to-date for payor directories. The administration says a regulation giving clarity on those provider directory requirements is not expected until after the compliance date of Jan. 1, 2022.

Even while these regulations may be issued within a month of the actual compliance date of Jan. 1, in a delightful turn of phrase, the government has said that it expects providers and health plans to “use a             good-faith, reasonable interpretation of the statute” to be compliant by the new year.

Being told you have to be compliant with a law before regulations are published is a bit like being sent to the grocery store and being told that you’ll be sent the shopping list after you leave the store. The difference is that, with the Advanced Explanation of Benefits and the provider directory, those are some expensive groceries in the cart.

Programming Note:

Listen to the Monitor Mondays Legislative Update by Matthew Albright, Mondays on Monitor Mondays at 10 Eastern, and sponsored by Zelis.