How the No Surprises Act is Hurting Pathology Revenue

August 1, 2022

By: Mick Raich, President, RCM Consulting, Lighthouse Lab Services

Well, it has started. Large insurance companies are now lowering their rates to pathology groups and using the rules of the No Surprises Act (NSA) to their advantage. I predicted last year prior to its enactment that the NSA would further erode pathologists’ ability to negotiate their payments. 

The NSA allows payers to pay what they determine is a Qualified Payment Amount (QPA) for services.  They can build this amount using their average payment for this service. I recently had a great conversation about this with Joe Seale, Client Manager for MSN Billing. During our chat, Seale noted labs that may be used to getting a standard payment amount for a particular service are now seeing those rates drop due to these new rules. 

“For example, your practice is used to getting paid $40 on an 88305-26,” Seale said. “The insurance plan sees they are paying only $20 per 88305-26 to some of their providers. Therefore, the insurance plan determines the QPA for the 88305-26 is $20.00 and now they pay the pathologist this amount, effectively lowering the payment 50% for these services.” 

So, you see your payments going down for your commercial payers and think it’s time to go to arbitration to get a better rate on these claims. Yes, the NSA allows you to go to arbitration and argue for better payment. However, this arbitration costs $500 plus all the time and effort involved in getting the claims ready. At arbitration the outcome could result in the insurance plan paying you a higher rate BUT, only for these claims in this arbitration. As a consolation prize you get your $500 back.

There is no forward acting result though. The very next week the payer could go back to paying you the lower rate. Unless you are in constant arbitration you will never get paid at your old rate again. In fact, some insurance plans know they have the leverage here and have actually offered groups a lower set rate because they know they can force lower rates to the groups. 

Seale and I have the same conclusion: the NSA is just another tool used by insurance plans to lower compensation to pathologists for services provided. Now consider this: how do these lower rates tie into the current employment issue with pathology? Over 700 open jobs?  Could it be some medical students are aware of these changes? 

Stay tuned! This story isn’t over yet. Seale and MSN and our team at Vachette/Lighthouse RCM Consulting are working hard to figure out a strategy for our clients. Like so many other pathology revenue issues over the years, there is an answer to this situation. Perhaps it is a constant arbitration process, or maybe some other solution is awaiting discovery.

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